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June 29, 2009

Unhappy With SEM? You’re Not Alone

A company called X+1 released a study last week   that highlighted the pain felt by many buying keywords from Google and the other engines. Satisfaction with the performance of their companies’ SEM campaigns was egregiously poor: on a scale of 1 to 7, only 12% of respondents gave SEM a top-ranked 7, with 57% ranking SEM a 1 or a 2. Performance satisfaction with fairly simple search campaigns (30 to 100 keywords pointing to customized landing pages) didn’t do any better: a full 42% reported being either “dissatisfied” or “very dissatisfied.”

The study didn’t really explore what these marketers were doing wrong, but contained a few clues worth mentioning. About 60% of survey respondents were doing SEM in-house. I’m not going to say that it’s impossible to conduct competitive SEM campaigns in-house, and I’d need to know a lot more about the level of automation and staff experience of such in-house teams before laying blame, but it’s still a warning sign. Another cause for concern: key SEM decisions were often made by fairly low-level people, including analysts (48%), strategy/results people (45%) and implementer/tacticians (36%). I’m not saying that these people aren’t qualified to accomplish operational search tasks, but I must question their suitability for high-level tasks such as procuring a suitable SEM agency.

Disappointment over SEM’s performance didn’t seem to dampen these marketers’ willingness to lay out more money in the months ahead. Most (65%) of survey respondents reported that they were planning either to spend the same amount of money in 2009 that they spent last year, with a handful (13%) planning to spend 20% more. I’d hate to think that this is a case of “throwing good money after bad” but one must hope that the survey respondents are taking active steps to reform their operations before handing the search engines even more money.

Unfortunately, there’s no magic bullet for all the dissatisfaction. SEM agencies (and yes, I work for a SEM agency) will likely use this data to hammer companies that continue to do SEM tasks in-house, promising to ride to the rescue. Unfortunately, the reputation of many SEM agencies isn’t exactly stellar; otherwise “agency churn” wouldn’t be as high as it is. Sadly, there are situations in which agencies have done a far worse job with search tasks than a qualified in-house team. Spending more to better train in-house search teams and equip them with an appropriate level of automation will help some, but such investments are difficult to justify in a recession, and the fear that one’s best-trained people will up and leave when the economy improves is well-founded.

If there’s one sure cure for avoiding disappointment, it’s to manage your expectations correctly. Paid search is an exceptionally difficult marketing medium to master, despite the perception (promoted by the search engines) that it’s a self-serve, plug-and-play road to profits. Here, failure isn’t just an option: it’s practically guaranteed for the unwary and the unequipped. Buyers must always be wary, whether they’re buying keywords, staffing in-house teams, or shopping for SEM agencies. The good news is that if you approach this medium with fear, respect, caution, and a first-rate, executable plan, you just might wind up being happy with your results.

Steve Baldwin is editor-in-chief at Didit, an agency for search engine marketing and auctioned media management based in New York. You can reach Steve at