Commentary
SEM Is A Service, Not A Product
- by Steve Baldwin , February 9, 2009
Unfortunately, I am doubtful that our modest reforms to the procurement process will be widely embraced, because of a particularly widespread misperception about what SEM agencies do. This misperception is that SEM agencies are suppliers of a product, not a service. This distinction isn't just an academic one: let me explain why I believe why it's so damaging.
Late last year, Didit, the SEM firm I work for, took on a new client's PPC account from another, generally well-regarded SEM agency. Upon looking over the state of the client's account, our client services team was appalled by what were a number of jarring pre-existing errors, including all keywords set to broad match, plus the complete absence of negative keywords. These errors of omission supported the prior complaints from the client that "our old agency didn't do anything."
The reason I mention this anecdote isn't to bash a competitor. What I'm trying to get at is the question of why SEM agencies, for whatever reasons, in certain cases either "do nothing" or are perceived as "doing nothing." And the answer, sadly enough, is that in many cases it's not because they don't want to do the work, or that they don't know how, but because they simply can't afford to do it at all. Tasks such as testing and implementing keyword match types or enumerating negative keywords aren't rocket science-level tasks, but they're labor-intensive, requiring the services of trained people, paid by the hour, who are compensated with money from the agency's markup on media spend. SEM agencies, in other words, provide a service, not a product.
And yet SEM agencies providing such services are routinely pitted against each other by RFP-wielding clients in bidding wars in which the lowest-balling vendor gets the job. This would be OK if we all sold a similar commoditized product. But it's a prescription for disaster if one is buying a service, because as we all know from life, there are wide variances in the quality of service you're going to get from, say, a lawyer who's just passed the bar and one who knows every judge on the bench.
Clients should realize that they'll never get the level of work required by beating up any service provider on price. If you pay your lawyer half his fee, he'll do half the work: this is simply the way the world works. When buying a service, you always get exactly what you pay for.
Agencies should realize that accepting a low-ball bid to win an RFP competition isn't good for them either, because it ensures that such a relationship isn't going to be happy in the long run. At worst, signing a client you can't afford to support can unfortunately result in having one's company reputation dragged through the mud by this same client at a later date.
We're keen in this industry on being technologically focused, and that's fine, because technology is in our DNA and clients need to know about how this technology works. But SEM is as much a people-centric discipline as it is one driven by machines. You might be able to buy a machine at a discount, but you'll never be able to buy the discounted service of a true professional. Unless we are somehow able to move the conversation beyond price, we're going to keep going round and round in the same unhappy dance. My fear is that we as an industry have been doing this dance for so long that it may be too late to change the music.
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I liked this quote.
"because as we all know from life, there are wide variances in the quality of service you're going to get from, say, a lawyer who's just passed the bar and one who knows every judge on the bench."
likewise with organic, you may get someone who just goes and buys a bunch of links (just passed the bar), or someone who has been there made the mistakes and has a ystematic approach to organic SEO.. (the atty who knows all the judges).
To start with, how did the client determine the SEM firm was "not doing anything"? I doubt it was because they saw what you saw. We also use broad match keywords, but also exact match and for sure, negative matches. To not do so is clearly a sigh of inexperience or laziness.
But I suspect that the client felt this because with they weren't getting the results they wanted, or the client was not responsive to communications.
Whatever the reason, you imply that this previous vendor was hired by the client using the RFP service, but you don't state that and state they are a "generally well-regarded SEM agency.". If that is true, is it reasonable to say that a firm with a fairly good reputation can also suck on occasion?
You seem to be blaming poor service on low-priced SEM firms hired by the RFP process and I think this is not always accurate.
We recently were sent an RFP and well here, I will share some of the info:
"Project goals
NNNNNN seeks to identify a search engine optimization partner to review the content and structure of www.xxx.net to identify and implement changes to improve our search rank.
Project scope
Review the content and structure of www.xxx.net to identify and implement changes to improve our search rank. Instruct us in search engine optimization best practices, including how to set goals and track our progress using Google Analytics. Advise us on and help implement content and structure changes to improve our search rank. Provide advice regarding outreach to allied site for reciprocal links and purchasing Google Adwords. Compare xxx.net’s results to those of other organizations of similar size and mission."
Now, if you know SEO or SEM then you can quickly recognize the client is pretty much clueless about what they really want. They say they want rankings, but what they really want is increased traffic that results in conversions or sales. If a client asks for "rankings" it leaves it wide open for a vendor to offer and provide "rankings". Some companies will not be concerned about educating the client about traffic and conversions, since that's going to be much more work.
So, in my opinion you can point the finger at cheap SEO/SEM firms and you may be accurate in what you say, but the real blame needs to be directed at clients that don't get help creating their RFP in the first place and only have a vague understanding or what they want, and what is needed to provide what they want.
I do agree that SEM management is a service and that levels of service vary. However, what is the basis of truth for this statement, "When buying a service, you always get exactly what you pay for." As with products, some services are under-priced, some are fair value and some services are over-priced. It is in the client's best interest to realize the best value for the money paid for a given service, so price will always be a primary factor in deciding on a search agency.
What I like about this article, Steve, is your title statement that SEM is a service, not a product. This couldn't be more true.
Our experience as a quality SEM service provider is that, for a stated ROI oriented goal, we beat all automated bid management products by far. SEM requires a lot of human intelligence. My favorite example, although a bit outdated now since they've corrected it, is when the automated bid management process at eBay would buy every single keyword in the dictionary and when you could read sponsored links ads such as "Buy you Boeing 747 on eBay"! Of course, eBay is now doing a fantastic job at paid search and they have corrected these issues, notably by building a large competent in-house team. But think about how many of these examples are true with numerous other customers who are wasting their money (or some of it) by still relying on inadequate automated SEM products.
I am seeing more churn in the agency market, which tells me that clients are in general understanding this much better now. They realize that SEM is not just a commodity product.
Especially in those days, when performance and ROI are key, clients are keen on re-evaluating the benefits of their existing providers, and not just on the basis of price.
Daniel
Amen number 2 for today.
Steve:
Great article! Let me share with you the Indian experience - most clients force agencies into a 'trap' - which is that the amount of money at a per unit level (lead/traffic whatever) keeps coming down y-o-y, (clients make the pitch to the agency that the agency has the knowledge! and that must translate into lowered costs!!!), and so the agency has to do much more work, mostly labour intensive, to get to the same level of compensation as the previous year.
In an earlier avatar I was CEO of SE Asia's first ever digital agency and went to the extent of sacking my largest client for pretty much this reason.
Some of the comments are pretty much on the ball as well. However I disagree - in part with Chris Nielsen - on the premise that clients must know their job et al. What I expect from my client is that he/she knows enough of the task at hand and is able to trust me as an agency to deliver on targets. If there is an issue, I would like to have opportunity to present my case - whatever that case maybe.
Oh yes! How could I forget!!!
Clients - do remember this one - "If you pay peanuts, well you will get monkeys to work for you!!!"
We see this all the time, too. But shouldn't we blame ourselves for NOT educating the client? There are plenty enough facts, charts and case studies from reputable companies that explain the process and effectiveness of our services that this shouldn't be that big an issue to prove value.
You can do this 2 ways - when you get the RFP from some company that has no idea what they're looking for:
1. bid low - knowing you're not going to be as effective as you could be for the client.
2. bid what you'd actually charge someone that understands it - and get the job done right.
If they go with #1 and they suck, they've learned their lesson.
If they go with #2 and you suck, then they'll certainly revamp their RFP next time.
Regardless,
This looks like a really, really good opportunity to create a SEO/SEM RFP template for potential clients that are looking for this service.
I know what I'll be doing tonight.
Very, very well said. Two points are worth highlighting, from my experience as a graphic designer / web developer. First, it is so difficult to cost jobs fairly (SEO or design / development jobs!) You bid a flat fee on something and scope creep just kills you. Second, there is so little understanding of how much work proper SEO takes that if you actually shared the cost with clients, most of them would balk. No wonder we see it as a percentage of media buys, and therefore see sloppy work! I am moving more and more toward charging strictly for time-and-materials. There is no fairer way to charge, and it gives the client some control of the cost.