Search Agencies are Dying … Finally

By David Gould, President

I’ll be happy when this week is over. Hopefully we’ll be done with prognosticating on 2009 and we’ll be spared reading any more of the sage seers’ obligatory lists of predictions that come with each New Year. That said, looking to the future is healthy and necessary, but sometimes the clearest view of the future has its roots in the past.

Aaron Goldman’s recent post regarding bid management technologies got me to thinking about where the search agency industry has been and, of course, where it’s going. In its nascent stages, search agencies truly operated in a silo. Advertisers looked to search agencies to execute this “new thing” called search. As the value of search became apparent and search agencies began to grow, they generally took one of two paths.

Some inventoried the plethora of manual tasks required to set up and manage a search campaign and realized that the process could be automated. In fact, they realized that it had to be automated for a search campaign to achieve any real scale. These are the agencies that hung their hat on technology development and developed bid/campaign management tools.

Other agencies saw themselves as marketing services agencies that specialize in search. They focused on how search could be leveraged as a marketing tool either in a silo or more recently as part of a more comprehensive marketing strategy. These agencies didn’t invest heavily in technology, but no doubt used it to provide search solutions to clients.

Ironically, the divergent paths that these agencies took are now converging again. The purveyors of technology solutions are realizing that, in many cases, their highest potential clients are not the advertisers, but other agencies. Agencies without a proprietary search campaign management technology are being pelted with solicitations from companies offering the latest tools with all the bells and whistles.

So if these two breeds of search agencies are beginning to merge, what does that mean for search agencies as a whole? As we rapidly approach the Xanadu that is search technology perfectly merged with search strategy, search is becoming less of a mystery and more widely accepted as an integral part of the holistic marketing mix.

The very thing that search agencies have strived for will be the very thing that drives them to extinction. We’ll see acceleration in the trend of search agencies broadening their scope of services or being absorbed by larger full service agencies … in essence, the death of the pure play search agency.

It’s already happening. Take a look at the Ad Age list of Top 25 U.S. search agencies. Those at the top of the heap are already doing more than just search … stay tuned.