In the online retail world, the dust doesn’t quite settle on Holiday until the January sales are over. That said, the intensity pales in comparison to the 6 weeks between Thanksgiving and Christmas. January is somewhat of a roller coaster month in which priorities shift between sales and introducing Resort and/or Spring merchandise. It has also always been a tricky time with paid search, in particular, in that advertising discounted merchandise can often lead to strong conversion rates while yielding AOVs so low that achieving P&L goals is tricky.
Once January has passed and Holiday is finally actually over, February is the time to reset the agenda and start moving toward rolling out new ecommerce priorities. Often this entails assessing partners and vendors and determining whether or not it’s the right time to consider making a change. With paid search typically representing the highest investment in a retailer’s online media mix, it is prudent to regularly (annually) assess the performance of the current paid search agency. For those managing paid search themselves, it is also sensible to consider whether or not the inhouse team is as effective as it can be in terms of driving sales efficiently and ensuring that none are being left on the table. To this latter point, VPs of Marketing and CMOs should develop a cheat sheet on how to assess the performance of their inhouse teams. This is a good strategy for retailers working with agencies, as well.
The triggers for going to RFP for a new search agency can be one or more of the following:
- Was Year-Over-Year growth achieved?
- Was Year-Over-Year growth achieved at the same efficiency as prior years? Revenue growth is great but not if you are paying a fortune for it.
- A lack of strategic thinking with the current agency team: results are regurgitated in performance reports with little actionable insights provided
- Not enough exposure to the most strategic people and/or the subject matter experts at the agency (most likely the ones who pitched you in the first place)
- High employee turnover at the agency
- Account team transition at the agency that was imposed on you
- A sense your campaign is on auto pilot
- You are being nickeled and dimed for services that other agencies may be providing for free
There are other factors to consider (fees/minimums, and technology, for example) but in all the years I have been actively involved in Paid Search RFPs, it is more likely the items in the bullets above that serve as the impetus for companies to start looking elsewhere.
Knowing which agencies to pull into the RFP mix can be a moving target, so it’s wise to research carefully. Agencies and SEMs that may have been a good fit in the past may not be so much anymore. They may have grown large enough that they can impose large minimums that may not be cost effective. Also beware of agencies who have signed lots of new clients quickly and/or brought in a few majors. In these cases, the top search staff is most definitely tapped out, and you’ll be left with a team of newcomers who are largely untested. Picking an agency who has recently lost a big client may be a better fit since there are many reasons why this might be and you will have access to a strong team. If the reasons for leaving were due to agency consolidation or the sale of one brand to another, these in no way reflect poor performance.
Always recognize that sales teams almost always deliver their most talented search guns to the pitch meeting but who will likely have little to do with your account once signed. Most companies going through RFPs know this but if the sales team makes claims that you will have regular access to this person once signed, have them put this in writing in the contract, allocating a dedicated amount of monthly hours for this person’s time.
There are consultants who can assist with RFP writing and agency selection. If a retailer has developed what they believe is a strong RFP, it is best to deliver it to the agencies the company is most interested in hearing from. Agencies spend many hours working on RFPs and it is disheartening for them to ultimately realize they were simply part of a 3 or 5 bid process and that the retailer was never really interested in them at all. If there are procurement guidelines on how many agencies must be pulled into an RFP, consider developing a shorter one for those not on the short list in fairness and consideration for everyone’s time.