Negotiating an SEM prenup
Last week, a marketer asked me what her rights where when terminating a relationship with a search engine marketing agency. Her incumbent agency refused to pass over anything but ad copy. No keywords, no historical performance, nothing. I am sure there are other absolute horror stories out there, but my gut says that this is not typical of most SEM agency-client relationships. That being said, the industry does not have guidelines on who owns which byproducts of a search engine marketing engagement.
Most will agree that search engine optimization deliverables inherently belong to the client, as the client usually implements changes to the Web site. The finer line really sits with pay-per-click advertising. Keywords, ad copy and performance reports are easily transferred, but most clients will want access to the actual pay-per-click account. If anything, transferring an account will preserve a client's quality score. Others might want to review historical bid history to see what has been tried in the past.
This is where it gets complicated. Historical data will shed some insight as to how the previous agency managed the account. While this is helpful to the new agency, there are some competitive concerns. Rob Murray, president of iProspect, walked me through the thinking: “Assume that iProspect has just been hired. Would we like access to the accounts? Yes, because then we can see historical performance and maintain the client's quality score.” He stressed that for most cases, it is in the agency's best interest to ensure a smooth transition. “If you had a good positive relationship, you want to maintain that,” he said.
Stuart Larkin, SVP of search operations for DoubleClick Performics, agreed. Client referrals sometimes come in on behalf of a former client contact. “We have a pretty formal process for on-boarding and off-boarding (clients),” he said. “This is why we don't have 6 or 12-month clients. If a client is going to leave, you don't want them to have a bitter taste.”
No one likes to talk about breaking up before a relationship starts and few firms have specific language to address data ownership and portability. Larkins did mention that DoubleClick Performics frequently co-owns data — with some stipulations. “We don't have rights [to the data], except in the aggregate,” he noted.
This is where it gets complicated. What about the many processes that constitute client equity that might be lost when switching agencies or pulling search in-house? For example, who owns the bid history? Previous tests? While the output is clearly owned by the client, are the processes considered the agency's intellectual property?
To answer this question, I turned to one of the few industry resources with a J.D. to boot. Jeffrey Rohrs, VP of marketing for ExactTarget said the intellectual property question only applies to copy. “This is a contractual issue,” he said. “To the extent that there is value and equity built up in the client's account, even in the face of contractual silence, the client should receive everything. Otherwise, it is damaging the client.” Not only would a client have to start from scratch, but the potential for an agency to simply resell a campaign to another client would cause pain, he added.
“This issue will continue to grow in interest and importance because clients are going to want campaign portability. He explained that in the past, media buying was based on relationships that only agencies could cultivate. In today's digital world, the expectation is that the client can and should have the same access,” Rohrs continued. His advice? “Clients need to know that if they want portability, they negotiate that on the front end,” he said.
Murray has another solution for clients that want portability: Own your search engine advertising accounts from the beginning. “If the client owns the account, they can look at historical data, migrate quality to the agency and so on,” he said. This arrangement can also mitigate the agency's concerns about financial exposure. Most sources agreed that unpaid media bills are a just reason for delaying a campaign transfer.
Once again, a good transition is contingent upon a good relationship. Rob Crigler, director of interactive marketing at Orkin, has worked on both the client and the agency side. He has been through a transition with no problems at all. “Proper notice is important,” he said. And so is a good relationship. “Agencies win and lose clients all the time. It's karma.”