A strong prospect calls your Search Engine Marketing agency and as a Business Development Executive, you take the call. The client asks you what the difference is between SEM and SEO. He also enquires what the most important on-page elements of an SEO campaign are. After you have answered, the prospect responds that of the four agencies with whom he has conversed today, every single one, has responded differently to this question.

Strike #1: If there is no accepted standard definition from which the client can develop an understanding of the terminology used in the conversation, this creates confusion and hurts industry credibility. It is like going to four dentists and being given four different solutions to numbing a tooth ache. You will ultimately not know whom to trust and will question each recommendation.

The client agrees to go ahead with the SEO proposal that your company has presented. You begin implementing the work and four months later, you get a call from the angry client because he had interpreted that monthly SEO included comprehensive link building and article creation, but you’ve only added a few links.

Strike #2: Unless both you and the client are clear on the definitions and parameters of the contract, this affects the validity of the contract and creates miscommunication & confusion.

The client refuses to make any further monthly payments until all the definitions of service have been clearly outlined.

Strike #3: This is detrimental to the trust that you have built with the client and creates a hurdle in the relationship. It creates a disequilibrium in the expectations the client had of your service offering.

You define each of the terms and clearly outline the definitions in your contract, but the client believes that these are not representative of what was agreed to during discussions and as the client had understood the contract. The client decides that he does not wish to do business with you any further and unless you refund all their money, a lawsuit will be filed against you for misleading conduct.

Strike #4: Now you have a problem, but do not wish to refund money for work that you believe was delivered. If you take it to court, the Law in your state will determine whether your contract is valid. Are there any legal loopholes? Could a court find that you as the Professional should have known better and through your actions, you inadvertently misled the client?

Without any standards to guide the courts, the courts only have the Law to decide who is in the wrong. With no guiding principles or ‘generally accepted standards’ in the SEO industry, the client may well have a strong case for being misled and cheated.

No Standards – And You’re Out
The SEO industry, like every other professional industry, from lawyers to doctors, requires standards to protect the public.

Doctors do not take the Hippocratic Oath for their own benefit, but rather to practice and prescribe to the best of their ability for the good of their patients.

In the same manner, SEO specialists should be required to adhere to certain principles that protect the client and decrease their likelihood of being cheated or misled.

Every single SEO agency may claim that they strive to keep the good of the client as the highest priority…. Yet, the road to hell is paved with good intentions.

Without responsibly practicing in the SEO profession, with official principles guiding the field, the cowboy industry where ‘everything goes’ will not mature.

As Ian McAnerin so aptly put it in his blog:
Standards? We don’t need no stinkin’ standards. But the public does. The SEO community needs to deal with the fact that they and the search engines are not the only ones involved in this issue. That’s part of the process of becoming mature: becoming aware of the needs of others. Joining the larger community. Practicing responsible behavior. Caring.

I think it’s time we grew up and took responsibility for our own profession, before someone does it for us.

The theory of rational expectations is considered an economic school of thought; which is also regarded as a ubiquitous modelling technique that is used widely throughout economics and can be more broadly applied to other fields.

Rational expectations describe the many economic situations in which the outcome depends partly on what people expect to happen.

People abandon a currency that they expect to lose value, which in turn contributes to its loss in value. One of the earliest applications of the theory of rational expectations was to the stock market, in that consumers utilise all the information available to them to purchase the stocks that they expect to have a higher than average return and sell those with a lower expected return. This in turn raises the price of the stocks with an expected higher return while drops those with an expected lower return.

In forming their expectations people try to forecast what will actually happen.  As they make forecasts on a particular price / topic / share, a number of times, they begin to adjust their forecasting rules to eliminate avoidable errors. This creates a feedback loop from past outcomes to current expectations.

Adjusting SEM Expectations
Now, this taken from the perspective of utilising the services of a search marketing firm can be applied as follows:

At the onset, people utilise all the available information to create their expectations of an SEM contract with a particular firm. These expectations are set by the information available on the company website, supplementary online research, discussions with representatives at the company, the proposal and the final contract. If the SEM agency performs, as the client expected, this will raise the value of the service provided, as well as increase the credibility of both the agency and the search engine marketing field.

If, however there is disequilibrium in the forecasted outcome owing to some ‘shock’, such as the SEM agency not delivering on an agreed component of the service agreement, the client will in the future, factor in any of these random elements that could not have been known in advance thereby affecting future expectations of service delivery by SEM firms.

When clients act collectively, as buyers do in the stock market, and utilise all the information that they can find in their assessment of search engine marketing and decide whether to outsource this activity to an SEM agency, the outcome of these expectations, when negative, will affect the overall credibility of the SEM industry.

Factoring in the Unexpected
Hence, by not implementing any official standards in the SEM industry, this leaves the market with very low barriers to entry, thus allowing anybody who is so inclined, to set up a website, advertise it and offer SEM ‘services’.

Every time a client uses the services of an ineffective and incompetent SEM firm, this is then factored into the client’s expectations, who is behaving in a rational way to maximise their utility (their enjoyment / profitability of using the service). Therefore, as the number of clients, who speculate about the future inaction / failure of an SEM firm, grows, this becomes a crucial factor in determining current action in the decision NOT to outsource the SEM work, and keep it in-house.

Unless, the search engine marketing industry does something to clean up its act and begins to restore credibility and service quality, the value of utilising outsourced SEM services will continue to drop, much in the same way a stock that is not expected to perform drops in price. If the perceived cost of working with an SEM firm, outweighs the perceived value, an increasing number of clients will walk away from the SEM outsourcing game.