Since the advent of search engine marketing (SEM), the number of firms offering SEM services has grown exponentially. Each of them wants your business, trying to co-exist and at the same time ignore the presence of others. Campaign fee is by far the most contentious issue plaguing the online marketing industry. Some firms are too willing to undercut others on price to win business and in the process hurt their clients and themselves. The matter gets worse when businesses use price as the sole selection criteria for hiring SEM agency.

It is a widely accepted fact that sub standard service is commensurate with low fee. If the service provider is paid less than the cost of providing the desired level of service, the service providers would have to either foot the bill for the extra efforts required or deliver non optimal service. A service provider willing to lose money on your account is a rarity and makes the second outcome more likely.

Perhaps, understanding the nature and dynamics of search engine marketing could possibly persuade clients’ to shell out more money for their campaigns. Search engine marketing cannot be accomplished with the sole use of technology. Human intelligence and its application to derive results are integral to SEM. This talent does not come cheap and will have to be accounted for in the campaign fee. In addition to this, search engine marketing can get quite complex and requires considerable efforts to achieve the set campaign objective. The variables associated with a campaign and its permutation and combinations consumes considerable amount of resources and time.A reasonable campaign fees is a justification of this investment of resources on part of the service provider. Frugal investment of resources (proportional to the fees) would only lead to a under optimized campaign. This would further diminish the likelihood of delivering a positive return on the client’s investment.

Fee haggling could possibly trigger a chain of events that would eventually undermine the campaign objectives and make it susceptible to failure. In the event of failure, the client would blame the service provider for over-promising and under-performing. The provider in turn would try and shift the blame back on them for paying less and expecting more. In reality, the service provider and the client are equally guilty for this unhappy and bitter relationship. The failure on the client’s part to understand the dynamics and competitive nature of search engine marketing, lead them to bargain on the pricing structure. The provider on its part should shoulder a fair share of blame for willingly entering into a business deal, being well aware that the fee would be inadequate to cover the campaign cost.

Fortunately, there are clients who can comprehend the true nature of SEM services and do not treat it as a commodity that can be bought for a fixed price. Clients who pursue the line of bargaining over fees are doomed to experience the same failure with every SEM firm they hire. Experienced SEM firms are well aware of the fact that accepting business for low fee would have disastrous consequences and politely refuse such opportunities. This ensures that they have a satisfied client base and gain credibility by delivering on their promises.

It is quite evident in the prevailing market place that SEM firms aren’t defending their fees aggressively. Instead of standing by it, there are too many firms that are acquiescent to lower their fees to gain business. They fail to realize that price is not a differentiating factor to attract business (with a few exceptions) and price should not be the only selection criterion either. Unfortunately, both the firm and the prospect falter to grasp this lesson until it’s too late.