In August and September this year, my company, linkbird did a research on the online marketing and SEO services industry. We explored the questions related to budgets, supply & demand, reasons for outsourcing, effective activities, challenges and concerns. In this article, I’m going to talk about the challenges and concern in the SEO services industry.

From the 10,000 we asked to participate in our survey, a little more than 400 responded. This article is based on these three open questions we asked our respondents:

  1. Question we asked to agency respondents: “What are the 3 biggest challenges your agency faces to deliver good results?”
  2. Question we asked to clients respondents: “What are your top 3 concerns when hiring an SEO agency?”
  3. Question we asked to companies that don’t hire agencies: “What are your top 3 reasons not to outsource your SEO to an agency?”

Findings based on the rest of the data can be found in this downloadable Research Report: The State of SEO Agencies 2014 after filling out an email opt-in form.

Challenges of Agencies in the SEO Services Industry

Online marketing and SEO services agencies face many challenges in delivering high quality service to their clients. One of biggest challenges that agencies face is keeping up with Google’s frequent updates, which continually change the SEO environment.

In addition to changing the SEO and online marketing environment, Google’s updates also influence the practices which are established within the industry. The continually changing practices and methods pose a challenge for industry players to maintain workflow in the way they are used to. Our respondents report that 17% of all the challenges faced by agencies relate to creating and maintaining workflow.

Online marketing agency challenges

Another key challenge agencies face is educating their clients about the online marketing and SEO services environment (18%). Client education is an important part of service delivery in agency work. Often online marketing and SEO services are complicated and their impact needs to be explained for the clients to have full appreciation for the hard work done by the agency. Agencies report that client education is their number two biggest challenge in provided (perceived) satisfactory service.

Client education and by extension client’s understanding of the services quality affects client satisfaction, since a client that does not understand a service will not be able to fully appreciate it. In our data we measured the Net Promoter Score of the online marketing services industry. Our data shows that there is an overall negative (-27%) NPS for the industry. We believe this is related to the increased difficulty of educating clients and lack of consistent workflow due to frequent Google updates.

Agencies also report that they have trouble meeting client’s expectations of results (8%) and the quality as well as quantity of back links (11%). Some agencies also use back link analysis tool to understands competitor’s back links. These figures indicate that about one in five (19%) challenges that agencies face is due to expectations rising faster than the budgets allocated to meet these expectations.

Concerns of clients in the SEO Services Industry

When hiring an agency, the biggest concern that clients have is whether the agency uses any black hat techniques (23%). The need for more transparency is understandable, since unsavoury practices by agencies can do a lot of harm to the SEO health of the client website. Another key issue for clients in the online marketing and SEO services industries is that of trust. Clients simply don’t feel very confident about the agency’s capabilities to deliver results (16%).

Client concern

Another key concern for clients is whether the agencies are charging them a fair fee which is expressed by one in five clients (18%). Clients are also worried about becoming too dependent on the agency. This concern is the reverse of the challenge of “educating the clients” that agencies have to cope with. Repeated outsourcing of services does not contribute to the development of client’s internal staff. Which in the long run is a diminishing returns situation for Hence the agency side and client side fear transfer of knowledge as a barrier.

Why some companies don’t hire agencies

The number 1 reason reported by companies for not hiring an agency is their own in-house capacity to undertake SEO activities (33%). It should be noted that respondents that report this reason often had large online marketing budgets.

non client reason

The second most cited reason to not hire an agency is related to the costs of outsourcing. About one in five companies who don’t hire agencies tend to do so because they find the price of the service to be too high. Further, a little more than one in ten companies find it inefficient to outsource SEO. The main reason for this is the way they do SEO. These companies don’t see SEO as a standalone activity, rather they find SEO should be undertaken in synergy with content marketing and online PR.

Communication and trust seem to be key issues as well. Companies report inefficient workflow and communication with agencies (12%), and a lack of transparency about the methods agencies employ (10%) as reasons not to hire agencies for their SEO activities.

Key takeaways

  • Frequent algorithm updates by Google make it harder for agencies to maintain a consistent and qualitative workflow.
  • Agencies indicate they need to improve efficiency and know-how in order to remain competitive.
  • Clients are often concerned about transparency and qualitative results when hiring an agency. Agencies should adopt methods of regular reporting that increase transparency and help manage client expectations.
  • Agencies’ margins are decreasing since the same results require harder work over a longer period than before Google updated its algorithm.
  • The figures indicate that if a company can afford to invest in the development of in-house resources and capabilities, it is a cost saver in the long run.
  • SEO is losing its standalone nature and is becoming co-dependent on content marketing and online PR, which in turn makes agencies that do not have capabilities in both disciplines less competitive.

Well these were my two cents on the topic of online marketing and SEO services industry. What kind of experiences have you had? Have you as an agency faced any of the above mentioned challenges? Or as a non-agency company worried about the mentioned concerns? What about the ones who don’t hire agencies, what are your motivations?

All images in this post are created by linkbird for DigiFloor.

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Karan is Online Editor at the Berlin-based SaaS-provider linkbird. linkbird is an award-winning SEO, Content and Online PR management tool to save time and increase efficiency in online marketing workflows. Karan focuses on topics related to virality, SEO, Content (creation, repurposing, curation), Strategy and Inbound Marketing.