The 2019 Guide to Choosing the Right SEM Partner
Choosing the wrong SEM partner can cost you significant time, money and effort. And choosing a partner isn’t easy; even if you’ve received a referral from a friend or colleague, you’ll still be wondering whether that agency can meet the specific needs of your business. Agencies are often very good at selling their services but can come up short when it comes time to deliver those services. In addition, any agency that’s been around for a while will have some clients who are willing to be references (even if most of their clients aren’t), so reference checks generally provide little value.
To simplify the process, and to help companies choose the right SEM partner, we’ve compiled a list of the most important questions and our point-of-view (POV) on each. These questions can be used in your initial discussions with SEM agencies, or as part of your RFP process. We’ve broken these questions into 5 key categories: Agency Expertise, Agency Reputation & Credibility, Current Client Mix, Agency Resources & Dynamics, and Account Management. Let’s get started!
Q: Which services do you consider your core competencies?
POV: If an agency tells you they have core competencies across a multitude of services, they’re likely stretching the truth. Most agencies specialize in a couple services, even if they’re a full-service agency. One firm may be excellent at SEM and SEO, but defers to partners or third parties for web development, and vice versa. If a potential partner primarily focuses on, for example, web development or PR and supplements their services with SEM and SEO, keep looking. Ideally, you’ll find an SEM agency that specialized in SEM, or only does SEM, and has relevant industry experience (see below).
Q: Do you have relevant industry experience?
POV: Having industry experience has many benefits, including:
- Leveraging previous learnings to improve your campaign performance and avoid pitfalls
- Shrinking the learning curve for the agency during the onboarding practice
- Assisting/owning the development of strategies that are proven to work for similar companies
Overall, we support looking for an agency that has relevant experience for the benefits mentioned above. This is especially important for certain industries, including B2B and B2C lead gen and retail/e-commerce. B2B and B2C lead gen businesses require experience with marketing automation and CRM systems as well as a general understanding of lead nurturing and lead scoring dynamics (see below for more info), while retail/e-commerce companies require experience with data feeds, product listing ads (PLAs) and other ad formats. That said, be sure to speak with potential partners about whether they’re managing programs for your competitors, and if so, how they handle the inherent conflict of interest.
Also, it’s worth noting that looking for relevant industry experience vs. relevant product or sub-industry experience are two very different things. If you’re selling shoes, finding an agency with retail experience should suffice, and if you only look for agencies that have experience marketing shoes, you may severely limit your options. The same applies to B2B tech companies. If you are a recruiting software company, then the priority should be to find an agency with B2B software experience. Recruiting experience is valuable, but that’s much easier to teach the agency than all the unique factors surrounding a B2B software company. See below for more details.
Q: Are you familiar with marketing automation systems and CRMs?
POV: This specifically relates to B2B and B2C lead generation-based businesses. The industry has rapidly moved away from valuing leads and measuring efficiency based on cost-per-lead (CPL). Instead, many companies are leveraging marketing automation and CRM systems to measure the number of qualified leads (e.g. MQLs, SQOs, etc.) and the cost-per-qualified-lead. Lead nurturing and scoring are critical aspects of this approach, and your agency has to be familiar with this dynamic, especially as it relates to how they optimize the campaigns and report on performance. Also, your agency should be familiar with buy cycle strategies so that keywords, messaging and CTAs align with your internal goals. If you are a B2B or B2C lead generation client, it is critical that you choose a partner that has deep lead generation experience, even if it’s outside your specific industry.
Q: Do you have agency partners, and if so, what do they specialize in?
POV: As discussed above, finding an agency that specializes in SEM should be your first goal. However, if you need other services as well, you may be concerned that you’ll have to hire more agencies to fill those needs. However, most established agencies will have long-standing relationships with agencies that offer complementary services, and the agency can bring in those partners to provide you more integrated services while maintaining a single point of contact.
Q: What is your expertise related to attribution?
POV: Attribution is a hot topic right now, and for good reason. Understanding how customers are interacting with your site and how your marketing channels impact their purchasing behavior is critical. Your SEM partner should be familiar with various attribution models (first touch, last touch, etc.) and should even be able to help you decide which attribution model is best for your business. Keep in mind that attribution goes beyond just reporting; it influences how you optimize your campaigns and how you allocate budget across your various marketing channels. You need a partner that has leveraged different attribution models and understands the differences between them.
Agency Reputation & Credibility
Q: Do you have client references?
POV: Be careful with this one. Any agency can scrounge up a few client references. The trick is to understand what you need from your agency relationship and ask the client reference whether they’re currently receiving that from the agency (e.g. if you’re a highly analytical company, you want to make sure the agency has strong data analysis capabilities). Even if that’s the case, keep in mind that you may not be assigned the same team as that client, so the level of service could vary. You should ask about the team separately and better understand who is working on your account (see Agency Resources section below for more insight). You should also ask the agency for a reference from a client that decided to leave the agency. This usually provides much more insight than speaking to a client they currently work with.
Q: How many clients do you have currently?
POV: This is absolutely something you want to know. An established agency should have at the very least 15+ active client accounts. Anything above 20 client accounts means that the agency has a stable client base. You also would prefer to be a big fish in a small pond, so if the agency has over 50 clients, it’s more likely that you will be put on a lower tier team (unless you have a larger budget than their other clients).
Q: How many new clients have you partnered with over the last 12 months?
POV: This is designed simply to gauge growth. 20%+ annual growth is standard for an SEM agency.
Q: How many clients have you lost over the last 12 months?
POV: This is designed to gauge churn. You do not want to be working with an agency that churns more than 10% of its business in a year.
Q: Have you ever “fired” a client, and if so, why?
POV: Most agencies have “fired” a client, and reasons for doing so can vary. That said, the goal here is to better understand their culture. Seeing how they respond to a difficult question can give you this insight.
Agency Resources & Dynamics
Q: How many in-house employees do you have, and where are they located?
POV: Surprisingly, many agencies rely heavily on freelancers to handle client management. They do this because it helps them resource accounts more fluidly and better manage their employee costs. There’s no reason to necessarily oppose having freelancers working on your account, but you should demand some in-house resources as well. If your account is being managed completely by freelancers, it’s a strong indication that it is not a high priority account within the agency.
Q: Who will be working on my account, and how much experience do they have?
POV: This question is critical. You ultimately want to know what level of experience you’ll have on your account, and whether you will have channel-specific expertise assigned to your account. Most agencies assign a supervisor and then specialists to each account. If your agency manages your PPC and SEO programs, you would ideally have different specialists managing each, since few search engine marketers are operationally strong in both areas. You should ask for this information for both the inhouse and freelancer resources.
Q: How much are you managing in PPC advertising costs per year?
POV: This gives you great insight into how large the clients are. An established agency should be managing at least $3m in annual PPC ad spend. Anything above $3m indicates a healthy client base, and anything above $10m indicates a very diverse client base. You should also ask about their average client’s monthly budget. This will help you gauge the size of their clients and how you stack up (again, it’s preferable to be a large fish in a small pond).
Q: How many hours per week will be allocated to my account?
POV: Most agencies, whether they disclose it to their clients or not, assign a specific number of hours to each client account. This insight will allow you to better compare fees across agencies, and will help you determine the hourly rate that they’re charging. Today, SEM agencies’ bill rates range from $140 – $200/hour. You should also ask how those hours are broken out across resources (director time, supervisor time, specialist time, etc.).
Q: How are your management fees structured?
POV: For paid search advertising, most SEM firms charge based on a percent of spend with a minimum. The percentage can vary anywhere from 4%-25% depending on the monthly ad budget. Charging a percent of spend has become the industry norm, but it can be a very dangerous structure because it incentivizes the agency to spend more of your marketing budget, even if that additional spend isn’t generating incremental business value. Look for a firm that charges based on scope, so that their only incentive is to help you improve your KPIs. For SEO services, most of the fees are based on scope (since ad spend doesn’t apply here).
Q: What level of communication and reporting will you provide?
POV: For an agency relationship to be successful, it’s important to have strong communication and consensus on reporting. The frequency of communication and reporting can heavily influence the management fees, so just ensure you’re comparing apples to apples. We recommend having calls at least once per month for smaller accounts, but more frequently for larger accounts. Also, you should inquire about the format of their reporting. Ideally, the agency will be able to provide you with reports that focus on the KPIs that are most important to you, and data in formats that you can easily repurpose for your own internal needs. These reports should also be automated to ensure you’re not paying the firm to manually create reports (they could be spending their time on much more impactful efforts).
Q: Is your pricing in line with industry benchmarks?
POV: You will get an answer to this question once you receive proposals from the agencies. We highly recommend evaluating potential SEM partners much more based on their track record, proposed scope, and their team rather than their fees. Find the right partner first, and then work on negotiating the fees to an acceptable level (rather than the other way around). On the SEO front, if you see a vendor’s pricing is significantly lower than the others, see whether their scope includes content writing or any content marketing services. Content marketing is by far the most time consuming and most costly part of an SEO scope, and it absolutely should be included in the proposed scope unless you’ve specifically requested otherwise. If the scope doesn’t include content marketing (and specific details on what that scope entails), it is a strong indication that that agency may not be able to generate long-term improvements in SEO. As unbiased as we can be, pricing should be a factor, but certainly not the leading factor, when choosing an SEM partner.
We understand that choosing an SEM partner can be a challenging task, especially considering the sheer number of SEM agencies and all the complexities surrounding scope, pricing and resources. We highly recommend that you use these questions and any others that are important to your business to add clarity and substance to an otherwise ambiguous and arduous process.
As always, you can contact Synapse SEM with any questions related to our SEM, SEO and paid social services by calling us at 781-591-0752 or by emailing us at firstname.lastname@example.org.