The Revolution Search Marketing Report: Search expertise - Brands ponder internal option

Sponsored by The Search Works.

Should clients bring search in-house or outsource it? Suzy Bashford finds out.

Unless you've been stranded on a desert island, you can't fail to have noticed the burgeoning media interest in search. While the average consumer might easily have mistaken the words 'search engine' for a car part two years ago, today Joe Bloggs is well aware that they refer to the likes of Google and Yahoo! This is reflective of the growing sophistication of the market and the recognition that search is a serious, and lucrative, business.

This has prompted some clients to review their agency arrangements. Martin Child, managing director of Overture Northern Europe, says a handful of clients with big budgets have decided to take search in-house: "They have said to me, 'this is a core part of our business and we should not be letting an agency or intermediary build up our expertise'." He has found this to be most prevalent in sectors such as travel and finance, where search success is key.

There is no reason why clients cannot build search expertise and there are certainly benefits. By cutting out the middleman, you'll be able to change your strategy quicker. You'll also know exactly how your budget is being spent and there will be no squabbles over transparency or ownership of the data you accumulate. You'll build relationships with key industry figures, such as search engine reps and technology providers, which should prove useful in future, and you'll be learning on the job.

No rules

Miva's European marketing director, Chrys Philalithes, deals with several clients who manage their search activity successfully in-house. She says direct clients are treated in exactly the same way as intermediaries and cites Pricerunner as a good example (see case study). In her experience, they are more likely to run businesses for which "search is the crux".

However, she doesn't believe there are any hard and fast rules governing whether clients outsource search or bring it in-house.

"I believe success comes down to people. Whether you bring experts in-house or hire expertise through an agency, expertise is key. Both methods work well," she says.

But, if you consider running it in-house, you need to assess how much in-house expertise you have and how difficult it might be to lure the right people. "The number of people who genuinely understand the discipline is very small. Search engine marketing combines many marketing-led and technical skillsets, and this combination is difficult to find in one individual. If you rely on search to drive online sales or visits to your site, you could be left high and dry if that person leaves," warns Warren Cowan, chief executive officer at search specialist Greenlight. "We've had many enquiries from companies that lost their sole search marketing person."

Cowan says that during his five years of recruiting specialists to his company, he has come across many candidates who exaggerate their search knowledge on paper. During interviews, he often finds that their knowledge is an amalgam of what they have heard on the conference circuit, with very little hands-on experience. "With search being such a new and often misunderstood discipline, many employers lack the ability to sufficiently screen candidates' skills as they would for more traditional roles," adds Cowan. "Bad hires often result."

It is also vital to be realistic about how much time and budget you have to allocate to search. Do you have enough to invest properly in running a successful in-house operation? Keeping it in-house may be invaluable for cultivating company knowledge, but it is not necessarily the most cost-effective or time-efficient option.

"In addition to the cost of hiring an individual is the issue of investing in campaign-management technology and knowing which technology provider will best serve your needs," points out Rosalie Kurton, head of search at media agency Catalyst.

Many search specialist offer their proprietary technology to agencies and clients as part of a licensing deal. However, buying the technology is the easy part. The hard bit is keeping track of the constant technological advances and deciding which technology partner suits your needs.

Without doubt, the pace of change is speeding up. "With MSN moving to its own search results, plus the emergence of vertical search engines in the travel and finance industries, search will become even more diverse and complex in future, making it more difficult for the average company to keep up," says Ed Stevenson, business development manager at 24/7 Search.

That's not to say that outsourcing is the simple solution. If you've considered your in-house capabilities and budget, and arrived at the conclusion that you would be better off hiring a third-party, the next decision is who to hire: a specialist, media or web agency, or a search engine's consultancy arm?

Fiercely competitive

Each type of intermediary has its pros and cons. Specialist agencies that eat, sleep and breathe search argue that they are the only ones who can keep up with the technology. Their in-depth knowledge is of particular use to clients in competitive sectors like travel and finance.

"In these fiercely competitive markets, costs can escalate for a campaign.

You can be paying extremely high prices for keywords and then they fall off suddenly. To get the best possible ROI, you haven't got room to take your eyes off the ball," points out Paul Doleman, chief sales and marketing officer at Latitude. He claims specialists that build a strong client base in a particular sector, can "find angles to manipulate the market", drive down prices and prevent bidding wars. "Google or Yahoo! would never do that because it would not be in their commercial interest," he adds.

The other advantage he believes the specialists have is their relationship with search engines. He had just returned from a week's visit to Google's California HQ, where he met the senior management and discussed how it could improve its service for his clients. "We are among the top 50 spenders in search worldwide," he says. "That means you can ask them certain questions. If you were Barclays Bank, you'd probably be listened to, but you're also probably spending a 30th or 40th of what we spend."

Although much of the current media coverage is focused on Google, a successful search strategy incorporates many search engines. Specialists can advise which engines best suit your campaign and have relationships that might be harder to cultivate as a client working in-house.

Of course, if you decide that you want a specialist, the decision-making process doesn't end there. Within the specialist agency niche, particular agencies have specific expertise. One of the most debated questions is whether clients should hire the same agency to handle both pay-per-click (PPC) search advertising and search-engine optimisation (SEO). Nigel Muir, managing director of Dbd Media, believes the skills required for SEO are entirely different to PPC, so he would be wary of agencies claiming to do both. "We don't do SEO at all. It's a completely different skill from paid search. Agencies who do SEO usually don't do PPC very well," he reckons.

But, agencies such as Ambergreen offer both specialisms and maintain that this is the most effective strategy. "If a client is trying to make the best use of search, they should do both paid and natural search to get the optimum return," says Tino Nombro, managing director of the agency.

"They need someone who can understand the impact of search on their business and what is required in terms of both organic and paid."

Cowboy rivals

In a maturing market, where various types of agency are trying to establish themselves as providing the best search offer, many suppliers are vocal in their criticism of rivals. Media agencies have suffered particular bad press at the hands of specialists, often being derided as 'cowboys' who don't understand search and are merely trying to grab a slice of the action. While there might have been an element of truth when search first appeared, many agencies are seriously investing in understanding the medium. It is best to ask for references and evidence of their expertise to track these down.

There are certain advantages in asking your existing media web agency to handle your search activity as well. They will be familiar with the breadth of your media mix and will be best placed to ensure your search campaign is integrated into your wider activity. "A search specialist will not have the overall view of your strategy that the media agency has. They may gain access to media schedules, but will not have helped to develop the strategy and won't have the in-depth understanding of the client's marketing in the way that their media agency does," says Charmaine Oakley, Zed Media's online planning director.

Another option for clients is to work directly with a search engine's consultancy arm, which can advise how to optimise search on its platform.

"No one knows more about search on Overture than we do," says Child. Nevertheless, many specialists argue that they know just as much as the search engines and can offer clients a more objective view, untarnished by vested commercial interests.

Whichever route is taken, whether in-house, specialist, existing agency or search engine, the most important ingredient for success is to keep and open mind. As Child concludes: "The best clients are those who are always trying to learn more and find out what works for them."


Free comparison web site Pricerunner handles all its paid-for and natural search activity in-house.

The search team is based at the firm's Stockholm HQ, alongside the technical team. It also has a satellite team of consultants in the UK who have local market knowledge. At any given time, the search team deals with 100,000 keyword bids.

Gary Goodman, marketing director at Pricerunner, meets the Stockholm team twice a month, speaks to them daily and receives a weekly breakdown of activity.

"We've been doing paid search in-house for a few years. To set this up takes time and it's a steep learning curve," he says. "Technology is changing all the time. We thought it was best that we become experts. We want to keep the knowledge we accumulate in-house."

If your business is marketing rather than product-led, he believes you are better off keeping search in-house. "Our core business is marketing as we don't sell anything; we qualify traffic and pass it on to retailers."

Keeping knowledge in-house for competitive advantage has become more important since Pricerunner's acquisition last year by ValueClick, whose measurement expertise it can now tap into. Pricerunner also hires agencies such as SEO specialists for advice from time to time. "We don't want to miss the new ideas out there," adds Goodman.


Until it took on specialist agency Latitude in November 2004, Britannia Hotels handled much of its natural and paid-for search in-house.

"Before Latitude, the way we handled search was a bit disjointed and campaigns were not integrated," says Diana Maxwell, internet marketing manager at Britannia Hotels. "Due to competition for search terms, it was getting harder to control in-house and it took up a lot of my time."

Now, she is updated on market changes and how much she is spending on search by an account manager at Latitude, who she can email with any new keywords she'd like to use.

Maxwell can focus on developing the content of Britannia's sites and natural search in-house, so that "the business is less dependent on pay-per-click", she says.

So, has outsourcing been a success? "It's not so much that we've improved search results, but that we have maintained sales and spent less. I would advise that, unless you have the expertise in-house, it is pointless to handle it yourself," she says.

Paul Doleman, chief sales and marketing officer at Latitude, says: "Search engine marketing is a much more effective and efficient way of increasing hotel room capacity and revenue than traditional methods of marketing, such as press advertising, TV or radio.

"It is also more adaptable, scalable and responsive. You can turn it on, off, up or down in real time."


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