9:00am: Keynote address – FaceOff: Will Agencies Ever “Get” Search? with:
Gord Hotchkiss, CEO & President, Enquiro
Mike Margolin, VP, Interactive Marketing Director, RPA
To present his point about whether agencies “get” search or not, Gord started things out by telling a story. He brings up John from MediaPost to be a human map of Ontario, points out some factual information about Ontario.
Gord asks the audience, “Based on that, would you want to visit?”Â Not really. To find out more about Ontario, what would you do? Search.
Using broad topics and search phrases, what sorts of sites would you expect to find? Official Tourism board. Unfortunately, that site isn’t going to get found. What the OTB bid via paid search was all long tail phrases and only from April – July. Doing so misses out on all the investigative search and off season search from people planning vacations.
Gord says that for some reason, when they were at the agency table divvying up media buys, they “did” search, but they didn’t “get” search.
Now Gord moves onto another story: The electrification of North America.
It didn’t take a rocket scientist to see the advantage of electricity over steam. Even with the obvious advantage, it took 50 years for America to adopt electricity. It wasn’t the big companies, it was the small or new companies that adopted electricity more quickly. Why? The big companies had invested too much into steam.
Many of those big companies failed and new companies succeeded because of over confidence in their size and subsequently, their failure to adapt. The large agencies that are “invested” in traditional media will “do” search, but they won’t “get” search. They don’t have the incentive.
Four reasons there are cultural mismatches withing big agencies:
6.5% of budgets are going to online. 2-3% of that to search. TV gets about 42%.
- With those numbers, there’s no incentive to “get” search because the budgets from clients are going elsewhere.
- Agencies see search as best categorized as part of direct response, which they don’t do.
- Search isn’t big, it’s small. Doesn’t fit with agency ways of doing things.
- The job of the agency is to persuade consumers to buy things, even if they weren’t thinking of buying. Search is not about persuasion, it’s about multiple choice based on user intent. You can’t persuade in search, you can capture intention and offer options. It doesn’t fit with big agency DNA.
For the counterpoint, it’s Mike Margolin who begins with a story about the difference in how he and his wife remembered why she “chose” him. He thought it was because he was cooler than the other guys she was dating. She said it was because he had more money to do things with her. This is the analogy for his position that two people can see the same event differently.
Mike establishes that he works for a huge agency and does a wide variety of advertising and marketing including search marketing. They have PHD’s that conduct research on consumer behavior and take a very analytical approach to finding out what works and what doesn’t.
He brings up the post Gord made, “Will Big Agencies Ever Get Search?” and how it got him a bit excited.
The agency job is to find out what channel is the best match for reaching client goals. The really good agencies don’t care whether that’s TV or search. Mike says that some agencies are pissed off at missing the search marketing trend and aren’t willing to give budget to search marketing. They will continue to lose money for as long as they don’t get it.
There are so many companies frustrated over their current agencies not knowing what’s going on in the consumer marketplace, there are increasing numbers of agency reviews. At least in Mike’s recent agency experience.
Search is one of the few media channels where you can spend and spend and then cut it the next day. With most media, there’s an upfront media spend. For those reason, agencies can’t look at search as the first dollars in.
Fixed budgets are money you’re putting into channels that “have to” be invested in like TV or print. Flexed budgets include performance based marketing like search.
Regarding using search as the first place to invest in for building brand awareness, “You can’t put the search cart before the awareness horse.”
Mike gives an example of a major advertising push that resulted in a 1000% increase in search volume. Increased quality score and lowered CPC costs allowing them to compete on broad phrases without huge CPC costs compared to what they would pay if they started bidding on those terms without creating awareness through advertising first.
Mike restates that agencies need to be or are media agnostic. Not everyone needs to engage a full service agency. Agencies don’t need to manage the search campaigns, they can bring in outside search specialists to execute. Mike’s full service agency does not choose to do that though, they handle all search inside.
Mike definitely feels there’s a place for search firms in the future. Also says that in his conversations with the search engines, that there are numerous big agencies that are doing more interesting things with search than the search agencies are.