Search Firms: Growing Old Gracefully?

Maybe it was a little wrinkle. Or perhaps the moment when you realized that you couldn’t remember your first third grade teacher’s name. Regardless, most know what it is like to see that first sign of age.

Me, I’ve always been able to picture myself fully aged at 80, but I never really considered the awkward process of growing old until my sister-in-law pointed out the first white hair on my head a few years back.

I’ve come to realize that the search engine marketing industry has also sprouted a few white hairs. Granted, we both have some time before we’re sporting Grandma’s hairdo, but learning to age gracefully is never easy.

Mid-Life Crisis

Being young is fun. No one can deny this. You can say what you want, do what you want, and it is all OK. After all, you are young and can be forgiven.

The search engines’ early years were much the same, with Google defiantly doing things its way and Yahoo going in another direction. Even MSN can be forgiven for being a late bloomer. The search engine marketing firms spent much of their youth sassing back to the traditional agency adults in a “you just don’t understand me, or the medium for that matter,” kind of way.

But now a few years on, growth is slowing down for the engines. There have been embarrassing statements, some off moves, and a rush to partner up before it is too late.

For the SEMs, reaching profitability on shrinking margins is getting harder. Gone are the days of 15 percent to 25 percent management fees on paid search. I’ve heard of one firm going as low as 4 percent, with most in the middle around 10 percent. A few will score 15 percent by offering superior execution.

The gut reaction is always the same: go any length to find the fountain of youth. Eying YouTube is akin to picking up a brand-new red sports car; adding poorly thought out services and tools to an SEM’s suite is no different than pumping lips full of Botox.

With Age Comes Wisdom

Like any industry, search engine marketing as we know it will eventually hit maturity. With a plateau on the horizon, many firms are currently looking abroad for growth. This expansion will fill the pockets for a good time to come, but nothing is forever.

Yet decline and death are not necessarily close at hand. We do have the luxury of experience to learn from previous mistakes and guide the industry in a fresh direction. Assuming that our mental faculties are still functioning, we should rekindle the innovation that gave birth to this medium in the first place.

As the saying goes, “Old age isn’t so bad when you consider the alternative.”

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