Winners and losers in NMA’s SEO/SEM agency league table 2011 + PR implications


Once again, it is time to look at NMA’s annual search agency league table to see what the data tells us about the state of search in the UK – as well as the implications for PR.

As ever, I’m very grateful to NMA for providing the baseline data to look at. As I’ve done in the previous four years, I thought I’d dig behind the figures to see if there are any significant trends to be discovered – and to compare the search sector with the PR sector.

The NMA league table ranks agencies based on gross profit rather than turnover (or top line fee revenue in the case of PR Week’s Top 150). I use the phrase “revenue” in this piece as a synonym for gross profit.

Some initial headline findings:

The number agency one agency again – for the third year running – is Bigmouthmedia.

They held on to their number one slot with a gross profit of £12.61m – a very modest rise of 0.42pc (in terms of PR sector comparisons, bear in mind that this is larger than most top 150 PR Week firms achieve in terms of top line fee income).  Revenue per head came in at just under £74K – a drop of 38pc from £120K last year.

The firm with the highest percentage growth was The Webmarketing Group who returned an astonishing 1600pc increase in gross profit over 2009 to £3.1m (I thought this might be a typo – it has happened before – but the figures seem to match with the previous table). Revenue per head was a more modest £54K.

Other high percentage rises were from iVantage (273pc, albeit from a low start point of £30K) and Smart Traffic (169pc – an increase of £2.2m on the previous year).

And who were the losers?

Surprisingly, the highest percentage fall came from Propellernet – a drop of 32pc. They were one of the top performers in 2009. Back then, they recorded a 64pc rise in revenue and a £113K revenue per earner ratio. Last year, they saw revenue fall by £748K to £1.5m and revenue per head fall to £58K. SiteVisibility also fell by 26pc year on year, coming in with a revenue per head figure of £46K.

The largest absolute fall came from Latitude, which saw gross profit tumble by 22pc (or £1.1m).

Of the 35 firms who were in last year’s table (ie where comparisons can be made), 25 of them saw increases in revenue. And ironically, as we’ve seen, some of the biggest fallers this time round were some of the biggest gainers in the previous year.

So what does all this tell us?

On the one hand, you could argue that the sector overall continues to exhibit decent growth. Average revenue per head in the NMA table in 2009 stood at £49.7K. This has risen to £52K in 2010. But this year’s results also show that creating consistent, sustained, multi-year growth is as difficult in SEO and SEM as it is in any other business sector. As we’ve seen, some of last year’s big gainers have seen falls this year. Conversely, some of last year’s fallers have seen revenues rebound this year.

In comparison to the PR sector, the difference in profit per head is beginning to look less marked. There are still a few SEO firms with stellar profit per employee figures – but the lesson from the previous year is to see how many of these agencies are able to sustain such eye popping revenue per head figures over time. Generally, the SEO sector appears to remain more profitable than PR – but not by the same margin of previous years.

Service-wise, the trend towards natural search vs paid search continues – although it should be noted that a number of firms with more PPC work than natural search seemed to exhibit a higher revenue per employee figure.

From a PR perspective, it is worth noting that a recurring comment from many SEO agency heads was the fact that social media was having an ever increasing impact on search (mobile was another common theme). Many SEO firms are already staffing up around social media related services (as well as continuing the trend of hiring their own PR  people)

If the PR sector believes it ought to “own social”, it can’t ignore the role it plays in relation to search. Savvy PR firms are going to cosy up with search agencies or start rapidly developing their own SEO and SEM capabilities. Those that don’t are in danger of being condemned to a race to the bottom of a commodity media relations market.

In summary, this is just a first pass look at the figures (any errors of analysis are all mine – so if you spot any, please point them out). I’ll pore over the data in more detail and report back in further findings. In the meantime, as ever, all comments and feedback welcome.

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