I just came across this article written by Dave Pasternack on DMNEWS.com:
Why do big agencies even bother with search?
You can and should read the whole article, but here are his main points (and my take on each):
1. Search isn’t a huge cash cow (because so many people are just doing it wrong).
2. Search is labor intensive (when you aren’t using the right tools and following an efficient process).
3. Search isn’t creative (when all your doing it trying to spend your clients money as part of a cost plus model).
4. Google and the other SE’s offer no agency discount (because they don’t have too. I wouldn’t either).
5. Ad agencies can’t afford great technology (today, but as with all technology items, prices are always dropping).
Adomatica 