What's the value of an agency to a search engine?
I work for Microsoft as project manager in search
marketing for SMB (small, medium business) clients. One of my projects is
to build a value model for agencies representing SMB advertisers. It's a lot
harder than you might think.
The basic formula is, well, basic -- revenue less cost
to serve equals gross margin. But what about the intangible values? What about
an agency's strategic influence on the market or the lost opportunity
represented by prospects available only through agencies? On the flip side, how
does the addition of an agency complicate the conversation between search engine
and advertiser?
These questions become more cogent in the SMB space
where margins are thin and efficiency a prerequisite for profitability. In SMB,
processes need to be scalable and lean. It's no coincidence that I've chosen
this project for my Six Sigma Greenbelt certification.
Over the next few weeks I'll explore the agency value
proposition for search engines. This is a hotly debated topic and not just at
Microsoft. I'd be interested in hearing the value prop stated from the agency
side, too.
