Targeting sub-Fortune 1000? Time for SEM agencies to segment
There's nothing like the glory of winning the search engine marketing work for a Fortune 1000 client. Then again, maybe not. Any growth firm worth its salt will be the first to admit that landing a really big client is a very good exercise in learning to scale. And fast.
Just five years ago few could even fathom a Fortune 1000 sending out a search engine marketing RFP. Now that search has earned a proud line item in the marketing budget, it is quite common to hear from the Citigroups and Coca-Colas of the world. Suddenly everyone's PowerPoint decks are sprinkled with top names, client quotes and logos.
Unfortunately, it is also quite common to learn that these same advertisers are quickly dissatisfied with their SEM, and the RFP process begins all over again. All those business development hours to win the business, the all-nighters servicing the account, and the last ditch effort to save the account are now a sunk cost.
While there are still many SEMs that clamor for the brass ring, the real fight today is for what I will call the sub-Fortune 1000. A month ago I was intrigued when a firm told me that this is their sweet spot. When I heard it a second time from another firm, I assumed it was a coincidence. But a third time? That's when I realized that there is a real trend. The search engine marketing agencies are finally accepting that they must segment themselves. It's about time.
For some of these SEMs, this shift was due to the harsh reality that servicing a Fortune 1000 is a much larger job than expected. While an SEM might certainly have the technical and tactical chops, scaling for multiple business units, product lines and languages is a very large job. Period.
Not to mention the legal and financial hoops. For one financial institution, it took my former employer six months to become an approved vendor. For a unit of GE, I learned that the firm doesn't accept vendors' contracts. Rather, it sends its contracts, complete with its non-negotiable payment schedules. Have fun explaining that to your CFO.
I suspect other wise souls also realized that the money doesn't stop at the bottom of the Fortune 1000 list. In 2006, Regal-Beloit took the honor of being number 1000, with revenue of $1.4 billion. Yes, folks, $1.4 billion. I think you get the picture.
In an industry that is somehow supporting hundreds of firms that do roughly the same thing, self-segmentation is a welcome sign of maturity and most likely, profitability. Sometimes it is better to let others duke it out over fancy logos on their PowerPoint.