The process of search engine optimization and placement has undergone a number of fundamental changes over the past year. Once a highly technical, hands-on operation, SEO is now more about analyzing information, strategic planning and long-term consultation. The changing nature of how SEO services are performed has caused many SEO firms to make radical alterations to their office environments and staff skill-sets. The most interesting thing about this period of intense change in the search marketing industry is that the biggest changes are only starting to happen.

There are now three general types or groupings of SEO practitioner. The first group is in decline; the second in transition, and the third is just starting to find its stride.

There is a declining number of SEOs who work solely for themselves, optimizing sites targeting the affiliate marketing, casino or adult entertainment sectors. Some of these practitioners had moved to the AdSense-rich environment of the blogosphere over the past two years, prompting stricter rules designed to discourage overt content duplication and blog-link spam.

This first group has been steadily moving on to other endeavors, mostly because their working environment is simply getting too difficult to make as much money as their skills could command in other sectors of the search marketing field.

Members of the second group of SEOs, the ones in transition, work for established search marketing firms and primarily serve a range of commercial clients. This type of SEO has existed for over a decade and has been generally successful financially and professionally. Chances are the firm they work for employs less than ten full time staff members and they are likely juggling a number of client files at any given time. It is stressful, fun and enlightening work but it is also becoming more complex by the day.

For this group, the changes in the search marketplace and in the business of search marketing are proving to be highly disruptive. For established SEO firms, a feeling of being squeezed on both sides is very real.

The search engine environment has expanded enormously over the past two years. Along with traditional search engines such as Google or Yahoo, there are a variety of more specific search marketing venues to think about, depending on the needs of the client being represented. This growth is paralleled by the increasing sophistication of Internet users and online content. The practice of SEO today requires a much deeper knowledge base and more person-hours per file.

When caught between a rock and a hard place, the only practical direction to go is up. Proactive SEO firms began making changes to their operations months ago though, as most SEO firms are quite busy, signs of those changes are only recently starting to materialize in the form of new content on their websites. A number of other firms, as well as StepForth, are refocusing many of the core services they offer.

Perhaps the greatest and most logical changes for established SEO firms are found in the increase in SEO consultancy services and the growing tendency to separate site design/re-design from the SEO service process. Both are byproducts of the growing complexity of the marketplace.

Up until recently, most SEO campaigns were assumed to involve a great deal of hands-on work in and around a website being optimized. Today, it is more likely that an optimized website benefited from an SEO consultant’s advice than from a traditional hands-on SEO.

As anyone familiar with website design or maintenance knows, hands-on work often takes a lot of time. The time commitment of hands-on SEO is complicated by the number of different types of CMS (content management systems) commonly used in site construction and the increased sophistication of websites written in Notepad or a web editor. Working through the various means of website construction has always been a challenge for SEOs, especially when their success is measured by site-traffic and increased client revenues.

Another factor moving SEOs towards consultancy services is the seriousness with which many clients are taking their websites. While clients tend to have more complicated websites, they also tend to have a larger staff to work on those sites. More clients have in-house IT staffs and thus, there are more rules about who can and who cannot have access to client servers than there were in previous years.

That increase in staff levels is highly beneficial for SEO consultancy services. Most of the research required to conduct a strong, ongoing SEO campaign can be done though consultancy and the time spent dealing with a more complex search marketing environment almost evens out with the time saved by having the site-administrators carry out written recommendations. As the IT departments of clients learn to fulfill many of the needs that were previously serviced by a hands-on SEO, the SEO consultant can spend his or her time improving the overall performance of the website and user-experience on the site.

As web-marketing has become more important to advertisers, a number of analytic products have appeared on the market offering extraordinary details about how visitors behave while viewing web content. The detailed information provided by analytic tools such as ClickTracks or Google Analytics is extremely important for SEO. It can help focus the user experience, and for those responsible for integrating an organic placement campaign with Pay-per-Click ad management, knowing how and where a user enters a site is invaluable.

SEO consultants act in the role of a guide and most charge by the hour but allow for retainers. As the web marketing arena grows and becomes more complex, a good guide is good to have around.

The other major change for SEO firms is the need to separate website design from the SEO process. Search friendly site architecture has always been important for SEOs and corrections to the simpler sites of previous years were more easily made during the SEO process.

Today, site design has matured into a creative science. For SEOs however, the importance of search engine friendly design, combined with the complexity of many commercial websites has made search ready site-design a specialized skill set.

This has prompted many SEO firms to draw alliances with site design firms over the past year, or to begin offering website design as a separate service. StepForth has plans in this regard which we will be announcing next week.

There is that third group of SEOs which is just beginning to establish itself in the marketplace, and they are big. Madison Avenue is coming to call on a client near you. In a bid to remain relevant to their clients, many traditional advertising firms are finding their way into the search engine marketing sphere. If you hear the phrase, “Click-marketing” in the coming years, this is the place it is likely coming from.

The entrance of large scale advertising firms to the search marketing sector will have a profound affect on the industry as it evolves over the coming years. With paid-search advertising being branded the most effective form of direct marketing, and search being estimated at a staggering $15 billion+ industry by 2010, the only question many have for Madison Avenue is, “What took you so long?”

In the end, the growth of the search engine marketing sector has proven highly disruptive for marketers working in other venues. Perhaps it is only time that disruption affects those of us involved in the industry as well. One thing it tells us with irrefutable optimism is; Search engine optimization is a necessary component in a greater technical advertising campaign.