I got the inspiration for this post from Llew Claasen’s post on the newly launched Thought Leader portal in South Africa.

In the world of Pay Per Click & Search Engine Marketing, the Dunning-Kruger Effect is probably the most prominent phenomenon within the industry.  This is very true specifically of traditional advertising agencies who brand themselves as “PPC Experts”, who use 3rd party software in order to manage their clients campaigns.  The use of 3rd party tools is not a bad idea, and I endorse products such as SpeedPPC, when used by those who are capable of running their own campaigns.  The problem that arise from the use of 3rd party tools, is that it doesn’t allow the smart marketers to think outside the box and make code level modification that can enhance a client’s campaign, as you would with proprietary software.  Clicks2Customers has built a very powerful proprietary platform that is not available to 3rd parties (except clients), as they utilize it to enhance their existing client campaigns and constantly are improving the platform and keeping it in line with industry developments, something that is difficult when you’re servicing 3rd party needs.

The Dunning-Kruger experiment was accurately based on the following hypothesis:

Kruger and Dunning noted a number of previous studies which tend to suggest that in skills as diverse as reading comprehension, operating a motor vehicle, and playing chess or tennis, “ignorance more frequently begets confidence than does knowledge” (as Charles Darwin put it). They hypothesized that with a typical skill which humans may possess in greater or lesser degree,

1. incompetent individuals tend to overestimate their own level of skill,
2. incompetent individuals fail to recognize genuine skill in others,
3. incompetent individuals fail to recognize the extremity of their inadequacy,
4. if they can be trained to substantially improve their own skill level, these individuals can recognize and acknowledge their own previous lack of skill.

The CJU conference as always has been great,  but in listening to some of people here (including Ad Agencies), I realise more and more that there are people in this industry who’s campaigns rely on other people who have convinced them that they are “Expert Search Marketers” or Agencies, and these people are really victims of people infected by the Dunning-Kruger Effect.   I had to sit through at least 2 sessions with people who are so infected with the DK Effect, that I had to take anti-biotics!  These people actually believe their own bullsh*t!

After getting a new client, we often find that they were being duped by their previous agency who believed that they knew what they were doing, but unfortunately, were relying on software built by people who cannot run campaigns profitably.  In most cases, the goal is to spend budget, and not generate profitable sales.

I often come across DK’s (Dunning-Kruger infected people), who just don’t realise how incompetent they are.  Hell, I’ve worked with them in my companies, but unfortunately, the only solution is not telling them they are wrong, but either letting them make their own mistakes, or if they’re willing, assist them by training them.   This is often not possible though, as many of these DK’s suffer from the Lake Wobegon Effect, which basically is “the human tendency to overestimate one’s achievements and capabilities in relation to others”.  When DK’s have both the Lake Wobegon Effect & the Dunning-Kruger effect, what you then have on your hands is a big problem.

What’s my point?  The Search Engine Marketing industry is filled with Charlatans, DK’s and LW’s who haven’t got a clue of how to build and run a ROI positive search campaign.  Instead, you have big media companies that hire age old executives who have never logged into Adwords, and tell them to run teams of dozens or even hundreds of people and manage client campaigns using tools built by another company.  With overhead that high, the goals are not ROI or Sales, it’s spending budget, being in position #1, generating sales from head & brand words, writing down negative ROI to “Momentum Marketing (Social Network BS)” or “Branding”, and meeting targets in order to pay the bills.

I had a chat with the founder of a UK based SEM company, and asked him why he didn’t change his model to performance marketing, and not % of spend – his answer was that he simply would not make as much money. Ok – so instead, he spends clients money inefficiently in order to line their pockets – great idea! Are you also being duped?

How do we change things? Well, for one, stop paying agencies a % of spend – if they can’t make money on revenue share or performance basis, then look elsewhere. Otherwise, play a flat fee for monthly services.  Do not use agencies that use 3rd party software – it’s like driving a car made of second hand parts from other cars.

Lastly, knowledge is power – so if you’re in South Africa, sign up for our newly launched SEM courses at KeyJam.net (shameless plug! )