Search Engine Partners were originally born out of the lack of trust out of all the advertising agencies established. Since the inception of the first search engines, namely Webcrawler, every programmer and technologist jumped on the bandwagon to try and manipulate these search engines' results. Until Google started changing the advertising agencygame in 2007 with their ever changing algorithm, the game was fairly easy. Now that Google has come out with their Universal search results, it doesn't make fiscal sense for these advertising agencies who have been around for the past 15 years to change the way they've been doing business or retrain their staff. It would be easier to promise results and blame the lack thereof on the client.
In contrast, Search Engine Partners takes the stance that we will figuratively partner with you to produce a win-win relationship; the type where a handshake actually means something. If we are able to truly place your website on the first or second page of Google and your sales go up exponentially, we ask that you reinvest those funds with us through more competitive keywords. If you started off with a level 3 package we hope you'll eventually upgrade to a level 1.
Search Engine Partner began from what was one of the first “Web Site Optimization” agencies in the world, The International Cimring Group, Inc. (ICG). The International Cimring Group was based out of Miami, Florida from 1996-1999 and offered Web Site Optimization as a new alternative to pull, albeit traditional, advertising, which had never enjoyed the prestige of push advertising. Examples of pull advertising would be a Yellow Pages ad placed in a specific section, a classified ad in the newspaper, or a coupon for a restaurant in a food magazine. The idea being that the consumer would be pulled into the product. Push advertising, in contrast, always enjoyed a more mainstream type of media like TV commercials, radio advertisements, and billboards, whereby the product was being pushed upon the consumer.
With this dynamic in mind, ICG sought to bring pull advertising into the main stream by targeting websites to search engine users. Advertising agencies had already begun diving into the new medium of websites; however, the approach had always been one from an aesthetic standpoint with the idea being that they would advertise the website address through traditional media like push advertisements. In fact, 99% of the major advertising agencies out there still use this approach as you have probably noticed. Conversely, ICG sought to manipulate the “backend” coding of the websites so they would come up in the search engine results. They called this SEO for Strategically Elevating Optimization. The idea was that they would build a website with a specific search term in mind. So, if a searcher typed in a search like “buy Pentium NEC online,” ICG's client would come up at the top of the search result because no one else had used this approach in originally constructing the sites.
It's not uncommon for there to be a conflict between an advertising agency and a web engineering company. In fact, ICG reported that 99% of their business was redoing websites that were not built correctly in the first place. The difference comes from how the industry evolved. The World Wide Web was invented in 1991 and became prevalent in '94. At that time there were software and computer engineering companies and advertising agencies. The advertising agencies were forced to enter this new media realm and “designed” websites from an advertiser's perspective, while the software engineers led the way by building sites from a programming perspective.
At the time this was unfolding, the founder's son, Clinton Cimring, a high school student at the time, began working on a part time project for a computer programming class for a company called Rankdex. The project was to develop a new kind of search algorithm that would return results – not based on the content that had been placed on a website, as ICG was doing – but on how many other websites linked to the website. Every website would have to be catalogued the same way other search engines had been doing, but this would also have to utilize a matrix of links going to and from sites. When a search was performed, the values stored in the matrix would be cross referenced with the typical search results and return a hybrid result of the most popular matches, as opposed to which sites contained the most content. The program was codenamed backrub meaning that one site rubs another's back. One year later the founders of Google announced the release of a new search engine based on inbound links called Backrub, which was later renamed Google.
By 1999 ICG was out of business. Perhaps in anticipation of the dot com crash. Out of the market's demise, in 2001 a advertising agency out of Santa Monica, CA called SEO Treo figured out a way to post massive amounts of inbound links through social media websites like Myspace. They called this social media optimization. Not only were the links initially posted, but users began spreading the links “virally,” posting them on each others' pages. At the time Yahoo! was borrowing Google's search algorithm. In 2007 SEO Treo formed a partnership with Clinton Cimring.
For the following year Search Engine Partner worked on reverse engineering Google's algorithm and did so successfully until Google changed a majority of the 200 factors they had previously used in their algorithm. By May 2008, Google's new algorithm was cracked along with the help of a former engineer from Google and the website for SEO Treo was transformed into SearchEnginePartner.com. SEO Treo is now a collaborative advertising agency blog where users can share search engine knowledge.
Advertising Agency
Going into 2009 our plan is now to apply our optimization techniques to our business plan from the ground up. Businesses are worth the net present value of future cash flows profits. So a business is worth the sum of all of its future profits, discounted back to today's net value. For those who don't want a lesson in finance, we can simplify this theory even more by using a cash flow multiple as a proxy for a net present value. A company can focus on creating value by driving revenues or they can focus on creating value by driving profits. And they are not the same because costs don't have to grow linearly with revenues.
Chris Anderson wrote a very good piece in the WSJ called The Economics Of Giving It Away. In that essay, Chris wrote:
Meanwhile YouTube is still struggling to match its popularity with revenues and Facebook is selling commodity ads for pennies after its effort to charge for intrusive advertising led to a user backlash. And news-sharing site Digg, for all its millions of users, still doesn't make a dime. A year ago, that hardly mattered: The business model was to "build a lucrative exit, preferably in cash." But now the exit doors are closed and cash flow is king.
Chris goes on to suggest that Internet entrepreneurs are going to have to get people to step up and pay for something instead of just giving everything away for free because advertising isn't going to foot the bill for every company. That may be true, but Chris's examples, particularly Facebook and Digg, are examples of companies that might benefit from looking at the cost side of the profit equation at some point.
Let's look at Craiglist. We've heard people estimate that they are doing close to $100mm in annual revenues at this point. Many say, "They could be doing so much more." But the Craigslist profit equation is interesting. They apparently have less than 30 employees. That's about $4mm/year in employee costs. Let's assume that they spend another $6mm per year on hosting and bandwidth costs and other costs. So it's very possible that Craigslist's annual costs are around $10mm/year. Their value equation then is 10 (as a simplified example) x (100-10) = $900mm. That's almost a billion dollars in value for a company with only 30 employees.
The web can do that in more than one company. In December 2007, Spencer Ante reported that Digg's annual revenues were around $8.5mm. Everyone was saying how bad that was. Apparently Digg's costs for 2008 were about $14mm and they have over 70 employees and are planning on growing that number to 150 in 2009. Digg is entirely peer produced. It could take a Craigslist approach to its business and keep its headcount to around 30. Then it might be close to breakeven and could grow over time to a business with $30mm to $50mm in revenue and $10mm in costs and $20mm to $40mm in profits. Apparently Digg has been looking for an exit in the neighborhood of $300mm. They could get there with a lean cost structure possibly more easily than investing heavily in new stuff.
Facebook also comes to mind. In 2006, Kara Swisher reported that Facebook was planning on generating revenues of $300mm to $350mm in 2008 and that it would have profits of $50mm, meaning its costs would be $300mm in 2008. She also reported that Facebook would take its headcount to about 1000 by the end of 2008. As Chris said in his WSJ piece, Facebook has been widely derided for the low CPMs it generates (pennies in Chris' words). But instead of deriding the revenues that Facebook is generating, maybe we should be in awe of a $350mm revenue stream coming from a company that produces no content of its own. Why does Facebook need 1000 employees? Why does it need to spend $300mm per year? There may be good reasons. International expansion can be expensive and so is building out a large sales organization. But of course, none of that has to happen. Could Facebook instead cut is headcount back to 500ish and become incredibly profitable and still grow like a weed? We don't know that much about what is going on inside of Facebook and we are not trying to be critical of any one company; we are just trying to make a larger point.
Let's talk about the biggest and most valuable Internet company of them all, Google. Google has one incredibly amazing business - keyword advertising. It relies on its own search service and deals with other search services and content partners for the audience that drives the keyword business. If you stripped that business out of Google, you'd probably have a business that has gross revenues of $20bn, net revenues of $13bn, and operating profits of $8bn to $10bn. That business is worth approximately $100bn of market value that Google has right now. Everything else is valued at 0 because it has a lot of costs and no revenue. Could Google unlock a lot of value by giving up on everything else they are doing? Maybe not, but they probably wouldn't lose much value either.
The web can create incredibly high operating margin businesses. Craigslist has an operating margin of 90%. Google's keyword business has an operating margin north of 60% (based on net revenues) and possibly higher. Could Facebook and Digg copy those models and create a lot of value on revenue numbers that many think are pitifully small? We think so.
There are other major quick risers that have also done a lot with very little like Twitter, which has only 20 employees. These companies are reaching large audiences and creating scale that can be monetized in many ways. No one told these companies to stay small. They told us they could do a lot with a little. And watching them do just that has taught us a lot. Yes, they will all grow this year, most of our companies will. But if they continue to do a lot with a little, their business models will be built on operating margins that are very high and can create a lot of value without a lot of revenue.
We think that's an important part of the economics of the web that are left out of most discussions of Internet business models. Yes, we are turning analog dollars into digital pennies in many cases. But we are also doing the same thing on the cost side, maybe even more so. And we think that "operating leverage" is going to create a lot of value.
Our plan now is to replicate what the Google's, Craigslists, and Twitters have been able to accomplish and become the first and only public advertising agency.
Mission Statement:
Our mission is to partner with every client we service and to treat each partner equally whether a sole proprietorship or large business.
Vision Statement:
We hope that by partnering with our clients it will have a synergistic effect in increasing our clients' sales, thereby increasing there adspend, which we hope will be reinvested through their campaigns with us.
Facts:
Search Engine Partners sign up rate is 90%, which means out of every 10 business we consult with, 9 sign up.
Our retention rate is 95% (verify on TopSEOs.com) meaning that 95% of the clients that sign with us stay with us for over 1 year.
We have been rated time and time again as the top “SEO firm” in the US According to AboutUs, Demandbase, TopSEOs.com, Zimbio, SeoMasterList, Digg, TechIT, and more...
Locations:
Accounts (open to clients):
Search Engine Partner's accounts division is headquartered in the heart of Boca Raton, Florida just off the Turnpike exit for Glades Road. We have a corporate Zen garden, golf course, and Starbucks for clients to enjoy while they visit.
7777 West Glades Road Suite 100
Boca Raton, FL 33434
561 245 4629
Development Offices: Search Engine Partner's development offices are headquartered in Mizner Park Boca Raton, Florida. Our development staff are welcomed to enjoy fine dining, a movie, or even a show at the amphitheater after work.
102 NE 2nd Street Suite 294
Boca Raton, FL 33432
We are no longer accepting phone calls at this location.
26 E Debbie Lane
Mansfield, TX 76063
817 405 0225
350 East Las Olas Boulevard Fort Lauderdale, FL 33301
954 667 9SEO
200 South Biscayne Boulevard
Miami, FL 33131
305 982 SEO2
Keywords: New Media, Advertising Agencies, advertising agency
