Swedish search marketing firm Keybroker has branded the UK’s approach to search marketing an ‘unfair tax on ad-spend’.
It says it has launched a new charging model into the market that will help online travel retailers increase their profitability.
Fees are generated through taking a share in online customer acquisition cost savings and the resultant up-lift in sales volumes.
Keybroker claimed its approach “is truly performance related and which does not tie online retailers into long term contracts or retainers”.
The company said its approach in Sweden has so far attracted both corporate investment and many leading blue-chip clients including American Express, e-bookers and IKEA.
It further claimed client campaigns generated over £280 million of online sales in 2010 and the firms was delivering over 6% of the total e-commerce spend in Sweden.
The agency has set up a London-based team led by co-founder and chief technical officer Fredrik Holmén, who has become the UK managing director.
He said: “we see an exciting opportunity here because we feel clients are being unfairly charged in the UK. We have already started our recruitment drive to build up our UK team.
“Given the UK e-commerce market is probably the most sophisticated in the world, we have been surprised at the continuing use of spend-based pricing models that do not reward agency effectiveness and fail to incentivise true performance based marketing.
“Many search agencies here still tie clients into lengthy contracts and retainers, and charge fees that equate to a ‘tax on ad-spend’.
“Our view is that the performance focus should be on increasing client profits and selling more of the products that contribute net profits.”
The Keybroker service is delivered through a technology platform called CampaignControl.
“The system links front-end strategic decision-making with back end inventory management,” Holmén added.
“Based on Google search criteria, our integrated RealTime Ads technology is then used to promote selected products based on trading decisions, margin requirements and availability.
“The system drives down customer acquisition costs and increases profitable sales by attracting a higher percentage of relevant traffic and advertising the right products.”
UK clients are supported by a specialist Keybroker delivery centre based in London.