Most marketing professionals understand the importance of search engine optimization (SEO), paid search, and social media marketing (SMM) but a limited few understand the actual processes.  Even fewer have the experience to evaluate a search engine marketing (SEM) agency.  Frequently agencies are chosen based on a media buying or traditional advertising relationship.  Rarely are SEM agencies put through the rigorous vetting of a traditional agency.  This is a mistake.

SEM agencies are specialists in the marketing landscape.  SEM itself can be broken down into specialties.  Agencies may focus on SEO, PPC management, link building, or application/widget development.  A quality agency should understand its own strengths and weaknesses and be able to produce a list of partner agencies who are leaders in their fields.  If an agency claims to do everything in house, move on.

Before looking for an SEM agency, identify your specific objectives.  Are you looking to drive traffic from qualified keywords in search engines? Are you looking to increase ROI from online marketing or paid search?  Looking to establish a presence on social networking sites?

Second, identify what type of clients your ideal agency will serve.  Are you a Portland area car dealership looking to rank well in Local Search?  Find an agency with a number of local clients.  Are you a large e-commerce site spending $100k+ per month on online ad spend.  Find an agency with similar large e-commerce clients.  If you are looking for a strong presence on Twitter and considering advertising on Facebook, look for an agency that has successfully worked with both.

Once you have identified a list of agencies that match your initial criteria – focus on your specific objectives and have a relevant client portfolio – it is time to ask the difficult questions:

1. Google the company name: Even the worst of SEM agencies will probably do fairly well in a Google search for the company name, but do your due diligence.  Check out their case studies, ask to look at sample reports, and look for any bad reviews.  Can the agency provide client referrals?

2. Who is doing the work: This is an important question.  Working with a knowledgeable sales person to close the deal is a lot different than working with an experienced account manager.  Who will be working directly with your account? What is their SEM background?

3. What are you paying for: Be suspicious of agencies that charge a percentage of ad spend or a set project fee.  Agencies, like lawyers, should only charge you for work that actually gets done.  Look for an agency that charges by the hour.

4. How does the agency report ROI: The major upside of online marketing – whether SEO, PPC, or SMM – is that online efforts are readily tracked.  A solid SEM agency should provide ROI metrics for all aspects of SEM.  Ask for a sample ROI report.  Does the agency account for cost of services in ROI?  How does the agency weight visitors coming from multiple sources (e.g. email campaign, paid search, and branded organic search)?  How does the agency handle branded campaigns and brand awareness?

5. What about competitors: Knowledge of what your competitors are doing online is important in an SEM strategy.  How does the agency incorporate competitor research into their processes?

6. Ongoing: SEO, PPC management, and SMM cannot be completed in a one-off project.  How does the prospective agency handle ongoing management?  Does the agency charge a set rate per month or does the agency adapt to your changing needs?

7. Percentage of work focused on analysis: In the SEM world, analysis should be the foundation for each proposed solution.  A good SEM agency will research top keywords to target before beginning SEO or paid search efforts.  Solid agencies will provide post-mortem analysis on online marketing campaigns and regular reporting.  What type of analysis does the agency provide regularly?  Ask for a sample report.

8. What’s next: A good SEM agency should be able to answer this question.  What online marketing tools and platforms are on the horizon?  Is mobile going to gain market share?  Should you be putting your money into widgets and iPhone application development?  Should you incorporate an OpenID login?

9. What do their clients know: From my perspective, this is the most important criteria for selecting an SEM agency.  Good agencies teach their clients SEM.  Do their clients understand SEO?  Do they attend SEM conferences?  What can you expect to learn through working with the agency?

Review the agencies’ responses to your questions.  How quickly did they respond?  Did the agency answer your questions thoroughly or simply provide a boilerplate answer?  What was your overall feel in working with the agency on the questionnaire?  Choosing an SEM agency can be difficult for marketers with limited SEM experience, but by asking the right questions, good agencies should distance themselves from the pack.

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