Okay…maybe it’s nowhere near the Pasternack vs the Rest of the SEO World Debate that’s currently going on (which is apparently now even spawning it’s own T-shirt), but Andrew Goodman took exception to my recent SearchInsider column, where I also ponder the future of SEM/SEO.

To save you a ton of reading, I’ll summarize the salient points of both.

My take:

SEM shops, and in particular, SEO shops, have been so tactical and have developed such a specialized set of skills that it will be difficult for us to step back and look at the bigger picture necessary to guide us in the next evolution of search into a more personalized channel. Further, as the current reality of universal search results pages gives way to personalized results, the market value of this highly developed skill set, largely based on the current paradigm of optimizing to gain rank, will begin to lose value to potential acquirers as rank ceases to have any meaning. This will create a shakeout in the industry as some of the best practitioners become employees with large companies and others can’t keep up with the new evolution of search.

Andrew’s take:

I missed some factors, in particular the fact that you can’t predict financial fads and roll ups and acquisition are often driven more by buzz from Wall Street than logic, and that acquisition is often driven by the target’s client list and expertise in a skill set that the buyer doesn’t currently have. Further, Goodman feels that contrary to my point, SEM’s are actually pretty strategic in their execution of campaigns and that our front line approach in customer acquisition is giving us exactly the skills needed to market in the new online reality. He goes on at some length about how the majority of the agency world is drastically out of touch with this new reality.

Of course, both Andrew and I being Canadians, we’re probably both way too polite and pragmatic to create much of a stir. Note the carefully worded way Andrew threw down the gauntlet:

Gord Hotchkiss argues that SEM firms aren’t getting acquired for large sums mainly because they’re too tactical and don’t have skills that help them work on segmenting and customer profiling. I tend to think that the picture is more complex. Or maybe, it’s actually simpler. Either way, Gord’s assessment of current reality is correct, but his analysis is wrong.

It’s kind of like Mac n Tosh, the really polite Warner Brothers gophers, in the WWF. “You hit me first.” “No, I insist, you take the first swing.” “No, no, that would be rude, please put me in a pile driver.”

But I do encourage you to read Andrew’s post, as I think it definitely adds to the perspective. And here, I’d like to dive a little deeper on some of the points Andrew brings up:

I happen to think search marketing is a fine training ground for the strategic mind. Of course, no small consulting firm is given the keys to the entire marketing strategy for a large client, but discounting for size, the influence of the search marketer is impressive. Look at all the data clients already let search marketers work with! While expensive, ponderous segmentation and market research exercises are not the typical MO of the searchie, that’s often because these don’t translate very well to the particular campaigns they’re asked to work on.

Well, in most instances, this usually contradicts the point Andrew is making. While I agree that we often get access to a lot of data, it’s usually in support of the crushing load of tactical work that has to be done in search. We need to dive into conversion data, site stats and a mound of other data to tweak and optimize the campaign. And it’s this deep dive into the data that often keeps us from seeing the big picture. And yes, segmentation and market profiling are ponderous work, and that is tactical, but it’s the ability to take the results and apply them strategically that truly sets apart great marketing. I agree with Andrew that there’s a real danger of misuse of profiling, and it’s horrendously abused in the traditional agency world to justify expensive sponsorships that are more about boondoggles and perks for agency execs than it is about effectively reaching target consumers. But to me, the biggest thing missing in Search is the who and the why. We know where and we guess at what, based on a series of tests.

Here’s how it usually works. We test for best position. We come up with messaging and test for effectiveness, often based on a set of metrics that are end of funnel targeted, because that’s the best we can do right now. There’s testing, testing and more testing.  Andrew makes this point as well:

(Testing is) certainly something search marketers are uniquely skilled to do. In paid search, we learned “direct marketing analysis on steroids,” not from any book, but from the ground up. Now we’re busy writing the book.

This brings us to a point that came up during our panel at the recent Microsoft Summit. One member of the audience equated search to direct marketing. This is a common comparison, but it points to the very reason most SEM’s are too myopically focused. Here’s one definition I found for direct marketing:

Direct marketing is a type of advertising campaign that seeks to elicit an action (such as an order, a visit to a store or Web site, or a request for further information) from a selected group of consumers in response to a communication from the marketer.

From a marketer’s perspective, this pretty much sums up search. It’s what we all want people to do through search. But, and here’s the thing, it’s often not what the user wants to do. The point at which search is used and the point at which the consumer is ready to take the action could be seperated by days, weeks or even months. Here’s another symptom of our short sightedness. When we measure actions, we show a strong bias towards the purchase end of the funnel. Most marketers either don’t or can’t measure promising activity earlier in the funnel. It’s often not our fault, because the leap from measuring end of funnel activity to full funnel activity is huge, and largely impossible. It requires a sophistication of reporting that’s beyond the ability of any single platform. So we tend to focus on what we can measure. And this leads to an increase in short sightedness.

What we need is the who and why. We need to look at presentation of our messaging through the eyes of the target. We need to understand intent, and deliver on it. That dramatically reduces testing cycles. When you learn to do that, your strategy defines itself. Contrary to Andrew’s point…

Customer profiling? I think it’s useful, but let’s not get too cute.
(By the way, I think Andrew’s Canadianism is showing here. Most Search Marketers I know would call it BS)

…knowing your customer isn’t cute, it’s critical. Up to know, search has been able to effectively deliver leads without this understanding. That’s a testament to the power of search as a channel. But those days are rapidly ending. My point is this view is now essential to reach customers in a more personalized search reality, or if it’s not essential now, it will be very very soon. And knowing your customer means research, profiling and creating paradigm shifting frameworks, such as personas. And I don’t mean in the way traditionally abused by agencies, but in highly effective ways pioneered by product designers and employed by Future Now, who Andrew refers to.

A few totally awesome data analysts in these firms – and a handful of independent analysts – are doing exactly the right things, while most everyone else in the agency infrastructure is not empowered to act on the power of the data (or put less politely, they’re just pretending). Agency culture is still dominated by the power of “creative,” and subjective judgments of “spots.”

Okay, here’s one point in where Andrew and I are in complete agreement. Agencies don’t get it, and although some bright individuals within the agency structure do, they’re hamstrung and stiffled by crushing inertia and old thinking. Andrew seems to think I implied agencies wouldn’t buy because they knew how to do it. That wasn’t my point. It was agencies won’t buy because they think they know how to do it. And the distinction is important. In fact, somewhere on my desktop is a half finished blog post where I looked at why this happens, but I shelved it because I thought it might be too “impolite”. Maybe it’s time I dug it up and finished it. But in the meantime, everything that Andrew points out as being wrong in the agency space I agree with totally.

From the ashes of all of this rises search. Which, though highly tactical, is a great training ground for strategic minds like Joe Morin, who is now CEO of StoryBids, a startup that offers an auction system for product placement.

Again, in trying to point out a difference in opinion, Andrew actually helps reinforce a point I was making. Joe is a good friend and a great example of the handful of survivors who are evolving into the new reality. I mentioned that the challenge for SEOs in particular (which was Joe’s background, along with being a private investigator) was in being willing to draw back from their current view and skill set and to reinvent themselves to find a niche in the rapidly evolving online ecosystem. Joe is a master of this and acts as a great example for the industry. Andrew also mentioned he has some skin in a new game, and as one of the smarter people in search, he’ll evolve quite nicely as well. And I think in the word “evolve” we come to the crux of this. Perhaps the best way is to sum up with the following comparisons

Traditional Agencies = Dinosaurs
SEMs/SEOs Unwilling to Change = Mastadons
SEMs/SEOs Embracing Change = Primates