Sweden’s largest search marketing company Keybroker has launched in the UK, launching a challenge to what it calls an ‘unfair tax on ad-spend’ offered by traditional search marketing practices.
Keybroker has launched in the UK evangelising a model that it claims is ‘truly performance related’ and which does not tie online retailers into long term contracts or retainers.
Keybroker’s approach in Sweden has so far attracted both corporate investment and many leading blue-chip clients including American Express, e-bookers and IKEA.
Client campaigns generated over £280m of online sales in 2010 with Keybroker currently delivering over 6% of the total e-commerce spend in Sweden.
Keybroker UK has recently set up a London-based team led by co-founder and CTO Fredrik Holmén who has moved across as UK managing director.
Commenting on the move, Holmén 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,” Holmén added.
The Keybroker service is delivered through a technology platform called CampaignControl. As Holmén explains: “The system links front-end strategic decision-making with back end inventory management. 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.”
Campaigns are driven by a team of multi-lingual analysts and campaign managers from Keybroker’s global delivery centre in Stockholm. UK clients will be serviced from a specialist Keybroker delivery centre based in London.
Keybroker aligns its objectives with client targets by operating a “success-fee” model.
Fees are generated through taking a share in online customer acquisition cost savings and the effective up-lift in sales volumes. In addition clients get flexible contracts with typically three month notice periods. The company promises no long term contractual tie-ins, no retainers and no tax on ad-spend.