SEM Best Practices for Ad Agencies

My fellow ClickZ columnist and search engine optimization (SEO) guru Shari Thurow mentions in a recent column three reasons marketers should think twice before assigning search engine marketing (SEM) duties to their ad agency or marketing firm. Shari covers typical mistakes interactive agencies (or traditional marketing agencies with interactive divisions) make when attempting SEO and SEM.

She touches the tip of a very big iceberg. Agencies do many critically important things wrong, things that can be disastrous for marketers. Yet some agencies do things right. Let’s focus on agency best practices, and contrast these with potentially incorrect practices.

Understand the Big Picture

Smart agencies understand they must keep track of all advertising and PR and factor those activities into SEM campaign strategies. Research shows both online and offline advertising drives search activity. This goes beyond direct response TV (DRTV) infomercials driving sudden interest in a product or service.

When advertising is heavy, customers become curious. They turn to search engines for more information. Similarly, when PR or news coverage spikes, search inventory often surges, too. By understanding media and PR interaction effects on search, an agency can act as a central hub, and coordinate and adjust SEM campaigns accordingly.

Sell Results, Not Position

Agencies must resist the temptation to be position-focused when pitching clients on paid search. A results-focused campaign boosts the client’s bottom line. By de-emphasizing position, an agency allocates budget where it works hardest.

Google AdWords isn’t designed for position-centered campaigns. The invisible AdWords bid landscape can be tuned to find great volume and return on investment (ROI).

Big Campaigns, Broad Engines

Agencies with clients’ best interests at heart resist the temptation to use only a handful of high-volume, easy-to-manage keywords. Large keyword lists and multiple engines (rather than high-volume keywords in one or two engines) allows a smart agency to mine keyword-listing gold.

Anyone can pick 40 to 100 keywords for a campaign. The best agencies expand keyword lists to include longer phrases. They tap searchers closer to a buying decision, deliver high ROI and value, and run broad, balanced campaigns.

Match-Type Proficiency

SEM media managers must leverage the different match types available at each paid-placement engine. Overture has three match types: standard, phrase, and broad. It offers the ability to set bids differently by match type. Google’s match types are folded into the AdGroup, where each keyword can have a match type specified. Both Google and Overture allow negative keywords to ensure a broad match listing brings in targeted traffic and provides searchers with a good user experience (tending to result in high ROI for marketers).

It takes time and strategic thought to use all match types correctly, but the investment pays for itself. Make sure your agency knows how to tap match-type power.

Understanding Marketplaces

Each engine has relationships between CPC/position/conversion/volume and ROI tradeoffs that come with changes in spending/budget. In almost all other online media, as budget with a specific media property (insertion order) rises, the CPM or CPC goes down in the negotiations. In paid-placement SEM, the reverse is true.

Media buyers must understand the relationships between position and volume in Overture, Google and other paid-placement venues.

The Right Technology for the Right Job

SEM is different from other online marketing. More variables contribute to its success or failure. In addition, the level of control in paid placement is nearly real time. Agencies that truly want to ensure client success understand the right technology can make a huge difference in the time required to manage a campaign and in the campaign’s success.

Go the Extra Mile

Marketers rely on their agencies to provide new opportunities while executing the best possible campaigns using already selected media. Successful agencies go beyond creative development and media-spend allocation. They learn about SEM best practices, research new media opportunities, understand the contextual inventory issues, and develop an understanding of the client’s business.

If agencies want to play in search, they should get serious. If they don’t, marketers will create in-house SEM divisions. Any agency that doesn’t take SEM seriously should not be given the responsibility of planning and executing SEM campaigns.

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