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Agencies Tire Of Looking Elsewhere For Search

The roaring financial success of Google and the still-booming search market are leading ad agencies to invest more heavily in their search capabilities, rather than outsourcing the tasks to specialty shops.

WPP Group's newly christened media unit, Neo@Ogilvy, has a search practice, NeoSearch, that has grown from about five people to 25 in about a year, executives said. Led by Stuart Bogaty, former head of mSearch at mOne, the unit is in final negotiations to buy at least one search marketing agency to bolster its capabilities, with a final deal coming as soon as this week, sources said. Neo@Ogilvy declined to comment on its search strategy.

The shop is not alone. Omnicom Group in November bought Resolution Media, a Chicago search marketing (SEM) firm, to add search capabilities to complement OMD Digital's media buying. Both WPP and Interpublic Group have also met with SEM firms to feel out potential acquisitions, search shop executives said. "They're looking at a list of the leaders in the category and looking to do some kind of strategic acquisition," said one SEM exec.

Some agencies see the opportunity to build search capabilities on their own. IPG's McCann-Erickson WorldGroup last month started a search practice to bring together the search-related services it offered clients in different departments. "We're continuing to evolve and accelerate in a strategic and tactical sense," said Aimee Reker, McCann's director of search marketing. "It's infused in how we build our Web sites. It's touching everything."

Omnicom's Tribal DDB, which began a search marketing practice in 2004, last year added search optimization (SEO), the practice of making Web pages show up higher in search results. It now handles search assignments for clients like eHarmony and Wells Fargo. "If you're going to be a fully integrated online agency, you have to offer SEM and SEO," said Paran Johar, general manager of Tribal DDB Los Angeles. "Clients are going to demand it."

Other agencies rely on collaboration with holding company sibling specialists. Aegis Group has gone this route since its 2004 acquisition of iProspect. Rob Murray, president of the Watertown, Mass.-based search firm, said it's now pitching clients with sibling agencies. When Carat media planners are asked about search, they can turn to iProspect for advice, he said.

The agencies see an industry enjoying meteoric growth and increasing client attention. Already a $5 billion industry, with 26 percent expansion forecasted for this year, the search market is expected to reach $10 billion in 2009, according to eMarketer.

Despite the robust growth, most money flowing to Google and Yahoo! has come directly from small businesses or via SEMs and early-adopting digital shops like aQuantive's Avenue A/Razorfish, according to industry insiders. Jeff Lanctot, vp of media at Avenue A/Razorfish, which spent $130 million on search advertising last year, questions traditional agencies' ventures into search. "It's being driven by fear of being marginalized more than a recognition of a real opportunity for a client," he said.

Google and Yahoo! executives said they have seen an increased willingness by agencies to learn the ins and outs of search advertising. Yahoo! has set up a team of 11 trainers as part of what it calls Project Outsource. The Internet company seeds a couple search experts in agencies to instruct their fledgling teams on search practices, reporting tools and metrics. Google has had dozens of training sessions at agencies this year, covering everything from how its AdWords system works to higher-level strategy.

One factor pushing search onto agency agendas is its increasing ties to branding efforts, said Ron Belanger, senior director for global advertiser strategy at Yahoo!'s search unit. Yahoo! has undertaken research to show how exposure to display ads increases related searches. Likewise, agencies are learning their offline ad efforts have a similar effect. "Clients are savvier about the role it plays across all their marketing," said Reker.

And as Google moves its keyword-targeted auction model into other media, the principles of search marketing will remain key to navigating a shifting media landscape. "The agencies are very open to talking to us and working with us, particularly as we grow our product suite," said Chris LaSala, Google's head of agencies.


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