Search Engine Marketing (SEM) is no longer a “nice to have” for
businesses, but rather a “must have.” This wasn’t the case 10 years ago,
when SEM got dumped into the “test budget” if there was any money left
over after TV, radio, print, out-of-home, display, email, SEO, PR and
sponsorships.
It turns out, however, that simply having room in the marketing budget does not mean that SEM is truly valued by C-level executives — or often, even by the VP of Marketing.
Broadly speaking, I’ve found that there are two types of companies: companies where SEM is core to their business, and companies where SEM is just a checkbox. The category your company falls into will vastly impact your ability to secure resources, take risks, and get budget.
Let’s break down the categories and what they mean.
A core SEM company is willing to make deep investments to be successful at SEM. These companies will hire SEM experts in-house, buy best-of-breed technology (campaign management, tag management, attribution, feed management, analytics, etc.), vet agencies carefully for relevant and high-level SEM expertise, often have unlimited budgets to spend (assuming they hit their KPIs), and have a direct line to the CMO and even the CEO.
As an SEM practitioner, working at a core company means that you have a spotlight on your work. If you are confident in your creed and are driving great results, that spotlight can be a lot of fun (and make you a nice salary). Bad results, of course, can put tremendous pressure on the SEM team, and executives will act quickly to remedy problems. (To quote Donald Trump: “You’re fired!”)
Perhaps most importantly, checkbox SEM companies drive very little revenue, sales, or growth from non-brand SEM. This is an important point to consider. Simply spending $1 million/month on SEM does not turn your company into a core SEM business — if your SEM budget is mainly just a slush fund to capture brand queries (driven through demand creation, word-of-mouth, or brand marketing channels), you are working at a checkbox SEM company.
As a result, checkbox SEM companies sometimes don’t even hire SEM experts in-house to manage their campaigns, tend to invest in the bare minimum of ad tech to support their teams, have fixed non-brand budgets, and look to consolidate their SEM spend under one agency (usually a big agency that is known for creative work, media planning, and top-of-funnel marketing, and also happens to do SEM “because they have to”).
Conversely, when I get introduced to a checkbox SEM company, I’ve learned (the hard way) that the chances of this company working with my agency are virtually nil. Checkbox SEM companies choose their agencies based on a combination of CYA (“I won’t get fired if I hire a big agency”) and ease of management (“I don’t want to manage 10 agencies; I want to manage one agency”).
For what it’s worth, I don’t blame checkbox SEM companies for making these choices. After all, if your company doesn’t really see SEM as a crucial driver of business, why would you want to take a risk on a smaller agency and have to subject yourself to yet another weekly check-in that takes you away from actually doing work?
I’ve described many of these above — companies that sell things that people don’t search for, for example, will never be able to focus on SEM until their demand creation efforts start to drive consumers to actually search for their products. So the first step is to assess whether there’s a realistic chance of driving meaningful non-brand SEM volume for your business.
Assuming there is a chance, transformation from checkbox to core must have buy-in from the top. At a minimum, the VP of Marketing needs to support the initiative with resources, funding, and air cover. You may also need to bring in SEM expertise to help you hit your numbers. This could mean severing your SEM agency management from a giant holding company and awarding it to a specialist shop, but it could also mean hiring internal SEM experts to help run the program. Either way, to compete for the hard words — e.g., something beyond “Buy Coach Bags” — you need experts, internal buy-in, and resources.
Once you’ve got that support, you then need to prove the math behind the SEM. For this, I think the best metric for success is some combination of non-brand sales and new customer (or “new to file”) growth. For a company to “get” SEM, you need to show them that there are tons of hungry customers out there being lost to the competition, simply because your budget doesn’t allow you to compete on non-brand terms.
Like SEM in general, engendering this sort of transformation isn’t easy. Indeed, it is probably a much harder challenge than most of the tactical SEM work you do on a daily basis. But then, you didn’t get into SEM to lead a simple life, did you?
It turns out, however, that simply having room in the marketing budget does not mean that SEM is truly valued by C-level executives — or often, even by the VP of Marketing.
Broadly speaking, I’ve found that there are two types of companies: companies where SEM is core to their business, and companies where SEM is just a checkbox. The category your company falls into will vastly impact your ability to secure resources, take risks, and get budget.
Let’s break down the categories and what they mean.
Core SEM — You Matter!
Let’s start by talking about the easier category: “core” SEM. Core SEM companies depend on SEM as a significant — often the most significant — driver of new customer acquisition. These companies are frequently online-first businesses, like a software-as-a-service (SaaS) technology, a website, or a business that has seen their consumers switch from shopping in physical stores to shopping online.A core SEM company is willing to make deep investments to be successful at SEM. These companies will hire SEM experts in-house, buy best-of-breed technology (campaign management, tag management, attribution, feed management, analytics, etc.), vet agencies carefully for relevant and high-level SEM expertise, often have unlimited budgets to spend (assuming they hit their KPIs), and have a direct line to the CMO and even the CEO.
As an SEM practitioner, working at a core company means that you have a spotlight on your work. If you are confident in your creed and are driving great results, that spotlight can be a lot of fun (and make you a nice salary). Bad results, of course, can put tremendous pressure on the SEM team, and executives will act quickly to remedy problems. (To quote Donald Trump: “You’re fired!”)
Checkbox SEM – Who Are You Again?
If you work at a checkbox SEM company, you probably already know it without me having to explain the category. Checkbox SEM companies spend money on SEM because they have to. This typically means that the company predominantly relies on offline sales (e.g. GM) and/or is heavily brand-focused. As a result, these companies spend 90%+ of the SEM budget on brand terms (e.g. Coach bags). Alternatively, the company might be a “new mousetrap” that sells a product or service that people don’t yet search for (e.g. a new mobile game application).Perhaps most importantly, checkbox SEM companies drive very little revenue, sales, or growth from non-brand SEM. This is an important point to consider. Simply spending $1 million/month on SEM does not turn your company into a core SEM business — if your SEM budget is mainly just a slush fund to capture brand queries (driven through demand creation, word-of-mouth, or brand marketing channels), you are working at a checkbox SEM company.
As a result, checkbox SEM companies sometimes don’t even hire SEM experts in-house to manage their campaigns, tend to invest in the bare minimum of ad tech to support their teams, have fixed non-brand budgets, and look to consolidate their SEM spend under one agency (usually a big agency that is known for creative work, media planning, and top-of-funnel marketing, and also happens to do SEM “because they have to”).
A Brief Aside – the Agency Perspective
As the head of an SEM-heavy digital marketing agency, I’ve learned how important it is to assess whether a potential client is core or checkbox. For SEM-focused or direct-response agencies like mine, core SEM clients are our bread and butter. We don’t have 129 offices around the world, a massive creative team, or the ability to run TV ads in Farsi for clients. What we do have is the ability to (hopefully) drive better results than a bigger, more broadly focused agency, and to provide better strategic SEM guidance.Conversely, when I get introduced to a checkbox SEM company, I’ve learned (the hard way) that the chances of this company working with my agency are virtually nil. Checkbox SEM companies choose their agencies based on a combination of CYA (“I won’t get fired if I hire a big agency”) and ease of management (“I don’t want to manage 10 agencies; I want to manage one agency”).
For what it’s worth, I don’t blame checkbox SEM companies for making these choices. After all, if your company doesn’t really see SEM as a crucial driver of business, why would you want to take a risk on a smaller agency and have to subject yourself to yet another weekly check-in that takes you away from actually doing work?
Can You Go From Checkbox to Core?
So let’s say you are at a checkbox SEM company, and you’d like to transform your company into a core SEM shop. How do you do it? For starters, it’s worth pointing out that there are many companies that simply shouldn’t put a focus on SEM, so don’t try to turn a moth into a butterfly.I’ve described many of these above — companies that sell things that people don’t search for, for example, will never be able to focus on SEM until their demand creation efforts start to drive consumers to actually search for their products. So the first step is to assess whether there’s a realistic chance of driving meaningful non-brand SEM volume for your business.
Assuming there is a chance, transformation from checkbox to core must have buy-in from the top. At a minimum, the VP of Marketing needs to support the initiative with resources, funding, and air cover. You may also need to bring in SEM expertise to help you hit your numbers. This could mean severing your SEM agency management from a giant holding company and awarding it to a specialist shop, but it could also mean hiring internal SEM experts to help run the program. Either way, to compete for the hard words — e.g., something beyond “Buy Coach Bags” — you need experts, internal buy-in, and resources.
Once you’ve got that support, you then need to prove the math behind the SEM. For this, I think the best metric for success is some combination of non-brand sales and new customer (or “new to file”) growth. For a company to “get” SEM, you need to show them that there are tons of hungry customers out there being lost to the competition, simply because your budget doesn’t allow you to compete on non-brand terms.
Like SEM in general, engendering this sort of transformation isn’t easy. Indeed, it is probably a much harder challenge than most of the tactical SEM work you do on a daily basis. But then, you didn’t get into SEM to lead a simple life, did you?
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