Search. Click. Find.

Search marketing (of the paid variety) is one of the more complicated forms of advertising mainly because you have to navigate the dangerous landscape of mystifying acronyms, deep and cumbersome performance statistics and terms that are completely made up (e.g., "quality score").

If you launch a search campaign and throw money at it without really understanding how all moving parts fit together, you can end up with very little to show for the money you've spent on your search ads. So I get that companies are reluctant to launch a paid search campaign without enlisting in expert help, and I get that a really good search partner can maximize your ad spend, and this makes me happy because (quite frankly) it's how I make a living, but...

Lately I've had a few uncomfortable conversations with prospective clients who have had bad-to-terrible experiences after hiring an agency to manage their paid search campaign. When I ask companies to elaborate on what the issue(s) are or were, they often just say the performance is poor but can't really explain what specifically is going wrong. But when I hear how an agency manages a client, I tend to listen for some specific red flags which industry outsiders may not be aware of.

As such, this post is meant to help educate you about what to look for (and what to avoid) in an industry that's brimming with "experts."

In thinking about these tips, I've considered how I manage my own business and also what I look for (and try to avoid) when I work as a contractor for a search agency. I won't keep you in suspense anymore, here are my words of wisdom - take 'em or leave 'em.

BEWARE:

• SEM management vendors that have absolutely no transparency at all when it comes to PPC pricing. If they claim to take all the hassles of set up and invoicing off your hands, and instead present you with one convenient invoice which bundles their fees in with your media fees (e.g., what you paid to Google, Yahoo or Bing) - then beware! I know it seems like a good deal, but it likely means they own your account and if you decide to cut them loose, then your ads go down immediately and you're back to exactly where you started from before you hired them. Plus, depending on their reports, you'll have no idea where their fee stops and where Google's fee starts and absolutely no idea of what the cost per click is for your keywords.
• Exuberant sales people who will ultimately have little to no involvement with your account once the contract is signed (see image, above). If you're dealing with a sales person (usually their title is something like Account Executive or Business Development Manager) then keep in mind it's in their best interest to close the deal and the agency isn't necessarily a right fit. Make sure you ask to speak with the account manager who will be assigned your account if it closes or, at the very least, speak with someone who has experience in your industry. Also, it doesn't hurt to ask for references from existing clients of the agency. Find out what their response time is to inquiries, how transparent they are with their reports and if they've actually provided value in the form of increased traffic, sales or ROI.
• The CEO and VP of Search who lavish you with attention, only to fade quickly away once you've signed the contract. Usually these are people very knowledgable in the industry. Maybe they're well-known bloggers, maybe you saw them at a conference and their expertise hooked you. The bottom line is that people at the top of the agency food chain do not have time to manage accounts - if it's a mid-to-large agency with a staff of 20 or more, then you'll likely get assigned a much lower level manager to handle your campaign. Find out what this process is and BEWARE the temptation of working with leading experts who are really just glorified sales people that won't (or can't) add value to your campaign.
• The pull of automation. I actually love automated tools. The scourge of my existence is having to pull weekly campaign data from three engines and migrating that into Excel because it seems so inefficient and old school. However, automated tools are not necessarily all they're cracked up to be. They distance your campaign manager from the account performance by aggregating all the performance data into one report. They often increase the cost of management by virtue of adding yet another third-party layer to campaign management and bid tools such as Atlas and Dart are questionable in terms of their value to help manage small to medium-sized campaigns. Now, having said that, I'm not completely opposed to automation and from what I've seen, the best tool out there for large to enormously large campaigns looks like ClickEquations, but that's only because I'm a big fan of the company's founder Craig Danuloff - who seems to really know his stuff.
• Agencies that charge a percentage of the media spend, particularly if you spend more than 10K/month on search. Percent of spend is an archaic model. Paid search budgets fluctuate monthly based on campaign optimization, quality score, season, etc. etc. Why would you want to reward an agency for spending all your money just because it's there? Paid search spending should be based on efficiency and effectiveness and agency's should be compensated based on the work they put into your campaign, regardless of the spend. That may mean spending a larger percentage of your overall media budget in some months than others, but in this industry (as in many others) you get what you pay for.

EMBRACE

• The small boutique agency. Okay, so I'm probably biased since technically I would consider myself to be the smallest of small agencies - e.g., an army of one. Even so, I've found that small SEM shops tend to be the best at providing the strategic direction and expertise that add value to your campaign. They will get to know you, your business and your goals better than a team of optimizers who have thirty other accounts to manage. Many of them have blogs (ahem) and the person managing your campaign is doing the blogging. So you can sort of get a preview on their approach before you buy.
• Shops that let you own your own account. I know it's a pain in the neck to get invoices from Google and possibly Yahoo and possibly MSN not to mention the agency as well. But owning your own campaign has MANY benefits, particularly on Google. First of all, the history of your account is taken into consideration when Google factors the quality score. If your account has been live for over a year and has excellent quality, you lose a lot of that value by starting over with a new account. You also have the ability to log in and pull reports any which way you choose if you own the account. This enables you to begin to learn the ropes (so to speak) and demystify the management process so you're not tied to a third party management company indefinitely. True, some companies would rather pay someone indefinitely to manage their search campaign - but smaller businesses with monthly spends of less than $3000-$5000 can probably manage the campaign in house and save themselves the agency fees.
• Flexible contract agreements. I never lock prospects into long-term contracts. Let's face it, sometimes an agency/client relationship is not a good fit. if I made all my clients sign for a minimum of six months, then I'd be selling them an uncertain solution that they were locked into for, um, at least six months! Work with agencies that are flexible about contract lengths and give you the ability to terminate any contract within 30 days notice. I tend to to think a 90 day agreement is the absolute longest amount of time needed to test the waters (and your new agency). After that, you'll both know if the relationship is a good fit.

This post is longer than expected and is to be continued. I'll let you digest the above info for a while. There may be a quiz.