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It seems to be a watershed time for the Search sector at the moment.  In the early days the specialists had it all their own way, and it was a reasonable assertion that the multi-media agencies didn’t have the capabilities to compete with them.  Now it’s different. 

There are still a few specialist Search bullshitters making general comments about the multi-media agencies apparently not getting it, but in reality the facts speak for themselves.  Some of the multi-media agencies seem to be getting it alright - to the point that they currently represent just over half of the top ten search buying points. 

So it’s obvious that some of the multi-media players are good at Search, and some aren’t – just as there are good and bad specialists.  However it’s hard to argue against the benefits of integration, meaning that the better multi-media agencies are in a position to seriously challenge the better specialists for much of the other half of the market, so it’s not surprising to see that things are getting interesting.

Just as Glue has been pitching for non-digital creative business, I assume that some of the Search specialists will be diversifying too.  It’s no secret that several are experimenting with banner buying, but that’s not enough in my opinion.  They’re going to need to get into the online video game, and that’s increasingly related to the practice of TV planning, which has its own set of specific challenges.


Meanwhile I assume that many of the good specialist agencies and people will get bought by the bigger media groups, as they have been to date.  For those that choose to remain independent, they’ll need to find new ways to compete.  I believe that the time for generalising that all the multi–media agencies don’t get it has well and truly passed though.  

All Comments

  April 5, 2007
Damian, good thought provoking post - I gambled that by now you would have more comments, it’s a shame that more SEMs are not blogging on BR... As one of the specialist search agencies that have recently been bought by a bigger, more integrated fish I feel compelled to comment. In many respects you are right. Many search specialists think they are brilliant at everything, but have only sold sponsored search… Whilst this is displays possible arrogance and definite stupidity, the last 7 years may help explain why some SEMs have come to this muddled conclusion. Firstly, we forged our skills at a difficult time online. Post crash, few models were working and Google didn't gain traction until 2001/2002. At that point many brands had been oversold CMP based advertising. Based on little more than greed, lack of insight, and a desire to ride the bandwagon many agencies and publishers made lots of money, whilst offering no business value to their clients - the digital agency community didn't cover itself in glory. Within search we had a hard time proving value (prompting many of us to build our own tracking systems) and developing business models (some SEMs pioneered performance based marketing techniques). Despite the legions of marketing experts search, not full-service agencies, reinvented online marketing. Search agencies simply identified the opportunities and delivered value. I personally made my business decisions against the tide of opinion. Secondly, until recently online has been hampered by a narrow view of advertising to the customer. As rich media becomes more technically viable display media is now making a strong case for itself and consumers are responding – thus perhaps explaining some of the search agencies interest. Furthermore, some of us do not subscribe to the view that advertising is something that happens to people. Being a search specialist has given us a range of well-honed skills. One of these is that, led by Google, natural search is far more important to the ‘media mix’ than many agencies give credit to. Adding services to our skills is not a case of pick and choose. I agree that a more integrated approach is inevitable but feel that the services that we choose to diversify into will need to fit to a performance based business model, and build on our existing data, technical, and implementation skills. So, no, we’re not going into affiliate marketing ;) Arjo Ghosh CEO, Spannerworks http://www.spannerworks.com
 
  April 7, 2007
I feel I can add a useful viewpoint from a client perspective. I have felt for sometime that working with specialist agencies within each of their fields, such as search, affiliates, email, TV and direct mail allows each party to focus on their core area and for the client to receive the maximum output. However, the challenge is in delivering integrating campaigns across multi channels, and therefore the number of people that need to be involved in planning and decisions. I am not for one second suggesting moving to a single full-service agency, as I have yet to see one agency deliver all (online & offline) channels at a consistently high level. But I do support your view of working with an agency that can deliver across a number of online channels. We work with Global Media (who have recently merged/bought Big Mouth Media) and their ability to deliver search, affiliates and display marketing has distinct advantages to us. It allows us to deliver online campaigns consistently across the channels, with a sensible view to allocating budget. If display is performing better than search, for example, budget can be moved easily. Also, reporting is an ease, and issues such as deputing sales and revenue aren’t even an issue. I believe their skill and experience (within their areas) is far higher than many of the traditional offline agencies moving into the digital arena. However, by the same note I would not give the job of TV media planning to a digital agency. I believe the position of a specialist agency is still strong, but their ability to diversify (or at least collaborate with other agencies) will be the key moving forward. Matthew Finch
 
  April 13, 2007
Thanks for taking the time to respond, gents. Very interesting to get perspectives from different parts of the industry. I’d be interested to know from Arjo, how are you integrating your business and the business that bought you? And Matthew, what else would be on your list of priorities if you could choose it integrate more of your activityt? From my perspective, the whole business of integration is changing as channels converge, and it’s not necessarily getting simpler as they do. Whilst the formats are getting more closely aligned eg online video and TV, the industry currencies and trading mechanisms are an ocean apart. I think one of the most interesting challenges is the global/local one: It won’t be easy, but we can establish global standards for online video for example, but TV’s delivered and traded in different ways in each country, making it especially hard to converge the two, regardless of whether we’ve aligned the creative assets.
 
  August 8, 2007
An interesting post, and one on which I I can probably comment on from both sides of the fence. Until very recently I was an in-house SEM for a large B2B publisher. When we required a search agency we went to specialists, because that was literally all we required. But when I was approached to join a search agency, it was the fact that it was part of an integrated approach that attracted me. Since I moved (to what was eyefall) we have now merged with two other agencies to form a truly integrated offering - and it's fantastic. When we got to speak to a client we will offer them whatever service we honestly believe is the best one to meet their needs, not just the one we happen to specialise in; whether that be affiliate, redesign, viral, SEO, online above the line, etc... And as part of a full service comms group, we can even work with other disciplinse, to tie-up on & offline PR, TV ads & PPC, the list goes on. I am sure that many of the specialists will still have a lot to offer; but for those companies who are seriously getting to grips with digital as a major marketing channel, I totally understand why they would want to work with an integrated agency - because they're probably the same reasons that drew me to work for one. Ciarán Norris SEO Director, Altogether Digital
 
  June 4, 2008

lol "specialist bullshitters", hey Damian you are braver than me ;) Well it made the CEO of Spannerworks comment =)

@Ciaran my friend, is there any blogs you are not commenting on ;)

@Damian: Good points, there is definitely a change in the search agency market. There is no longer a "you have to be a specialist agency to be good at search" attitude, well ok maybe it's still there, but it's improving. I work for a integrated Marketing Agency in the B2B sector and we pride ourselves in being able to carry out truly integrated search campaigns. Being able to be involved from the start when building a website is of great advantage in SEO.

Anyway, I signed up to this blog because of this post so keep it coming.

cheers,

LisaD

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