What you want to see in a real SEM agency report
Another week, another search engine marketing agency ranking report. This past week the Forrester Wave Report ranked the top six integrated search marketing firms. The week prior, ClickZ awarded its annual Best SEM Agency prize. And just a few weeks ago, Ad Age released its Search Marketing Fact Pack, listing out the top 20 SEM agencies by revenue.
As you might recall, I enjoy reading such reports, but with a grain of salt. Methodologies vary and self-reported data is hardly trustworthy. And while most do offer some kernels of wisdom, my experience inside an SEM agency taught me that the most useful data is held close to vest. Since most firms would never answer the questions I pose below, I ask that we suspend belief for just a moment and imagine a report with the following:
Show me the (real) numbers. SEM agencies are infamous for reporting gross revenues as if they were net. Even worse, the researcher often doesn't specify and ends up reporting unclear numbers. A quick glance at the Ad Age Fact Pack, the Forrester Wave and the 2006 Adweek Interactive Ad Agency Report suggests that at least one firm has reported three separate figures for 2005 revenues. What I (and many an acquirer) wouldn't give for a lovely bar chart noting both gross and net by firm.
Client retention. In a recent client project, I found that many major advertisers switch SEM agencies almost annually. While every SEM has its long-term client, in this industry it is about four years, I would be most interested in learning what the average client tenure is across the board. Likewise, a survey of all marketers indicating how many times in the past five years they have sought a new SEM agency would shed some light on how low the switching costs really are.
No, you're my favorite client. No, you are not alone. Wouldn't you like to know how many of an SEM's clients are direct competitors? While exclusivity can hurt an SEM's ability to grow, clients deserve to know if they are paying to have their logo slapped on deliverables developed for the competition.
Tracking application usage. Even though most SEMs insist on using their proprietary tracking code, I have found that many advertisers prefer to use their primary Web analytics package to track search. I would like to see a graphic of the percent of clients using the SEM's proprietary tracking versus other applications, broken out by name of application.
Employee retention. So it is a small industry with a good deal of hopping. That being said, I have a feeling that some firms are better at hanging on to their prize employees than others. This chart could be overlaid with the average tenure of senior management to see if the leadership fares any better than the worker bees.
Labor conditions. Despite the automated bells and whistles, any SEM employee will tell you that the days are long and the workweek has seven days. What is the average amount of time in the office at an SEM agency? How many accounts are these employees handling? And how many are actually working on your account? If we are lucky, perhaps these figures correlate to the employee retention number and subsequently to the client retention number.