Agencies Play Catch Up To Gain Share Of Search

When AKQA built a brand Web site for a Visa Signature campaign that launched this month, its media plan included a first for the account: a search component. It will buy keywords related to the checklist of “signature” life moments on the site, like “take a steamboat ride down the Mississippi.”

The campaign is the first instance of AKQA adding search to its Visa assignment, which includes site building and online media. It’s predicted that more AKQA clients will add search to their assignments, said Scott Symonds, executive media director of AKQA, who came from in January with a mandate to build the agency’s search capabilities.

AKQA is one of several shops, including Ogilvy, Starcom and MediaContacts, that are adding search expertise to their media teams in the hopes of getting a cut of the ad dollars going to Google and other search providers. Ogilvy, for instance, is negotiating to acquire Global Strategies International, a small search shop run by Bill Hunt, a well-known search specialist, per sources.

“Every client is asking for search as a component of their media mix,” said Alan Boughen, director of Ogilvy’s NeoSearch in North America, which now has 35 search specialists. “We’re saying it’s the cornerstone of any direct-marketing plan, but also an awareness plan.”

Still, in many cases, agencies are playing catch-up. Google grew to be a formidable force in advertising without, for the most part, relying on ad agencies. While some digital shops like Avenue A/Razorfish and Carat Fusion made early bets on search, many avoided the low-margin, complex business. Instead, clients spent directly with Google and dozens of small search specialists arose to help clients manage thousands of keyword buys to meet acquisition goals.

“A lot of people missed the boat on search,” said Safa Rashtchy, an equity analyst with Piper Jaffray. “It was a new concept.”

Now, agencies see that Google’s auction-based bidding system will move into other forms of media, while there is substantial evidence that search ads have brand value and need to be coordinated with online and offline media placements.

“Clients that understand the broader implications of search and how it influences their overall marketing programs want to have it tied closely together,” said Steve Governale, director of SMG Search.

Some agency executives see echoes of the early days of the Internet, when many ad agencies left the new field to upstarts before buying specialists and building units of their own. While some large-scale search acquisitions have taken place, such as Aegis buying iProspect in late 2004, the preferred method for agencies has been to build their own practices, said Ron Belanger, vp of agency development for Yahoo’s search unit. “The nice thing about building it is you can build around the idiosyncrasies of the shop,” he said. “It will end up looking and feeling like the other practices.”

MPG’s MediaContacts took this approach, steadily building its practice over the past two years. It now has 15 people and handles search for key clients like Fidelity, which earmarks half of its Web marketing budget to search ads, as well as brand clients new to search, like Outback Steakhouse and Goodyear. “The degree of coordination becomes important,” said Rob Griffin, director of search at MediaContacts.

While integration is on the lips of every agency executive, search specialists bet the knowledge and technology gap will be too wide. In the meantime, the larger search shops, like iCrossing and 360i, are moving up the food chain by branching into display media and landing page work. “If you want to be a leading-edge digital marketing agency with search at the core,” said Don Scales, president of iCrossing, “hiring three or four people will not be enough.”