The current trends in the search engine marketing industry resemble the history of the diamond mining industry in South Africa. In the early days, anyone with a shovel could try his luck and start digging. Very much like the boom in affiliate marketing not so very long ago. But as the shallows sands of the Northern Cape yielded lower and lower returns, the opportunists left for greener pastures. Little did they know that underneath the rock layer much richer diamonds deposits were to be found. But mining these deposits required skill, technology and professionalism.

Today, the rush of affiliate marketing is over. It is increasingly more difficult for affiliates to compete profitably with other players in the market. Not only because companies place tighter restrictions on their affiliate terms, but also because traditional advertiser companies have smelled blood and they are using their deep pockets to corrupt the efficiencies of the affiliate model.

A bold statement perhaps, but we see evidence of this almost every day. The incumbent agencies have woken up to the fact that search engine marketing is not a fad and they are leveraging their client relationships to increase their search marketing portfolios. What they lack is the understanding of a marketing model which is performance driven and they tend to massively overprice their keywords. I find that traditional agencies are more often than not wasting their clients’ money and that they find it hard to catch up with pure-play search engine marketers in this fast moving segment.

The current state will only be a transition period because online, it is hard to hide poor performance. In the end, the pioneers who learned the ropes during the affiliate diamond rush will prove invaluable to traditional marketers and their clients alike to profitably mine the potential of the online consumer base.