According to the investment bank AdMedia Partners, mergers and acquisitions of online advertising and marketing firms are expected to increase substantially in 2007.

First Page Fitness has non-formal fitness marketing relationships with several marketing firms, as do most successful search marketing companies these days. Typically, it is a one-way street: Old-school marketing firm has clients screaming for SEO / SEM but no employees knowledgeable enough in the area, and must pass the work on to a search engine marketer.

One option is that they spend six figures hiring a competent search marketer to bring in-house - which is difficult to do when they know little about what constitutes a “competent” search marketer, and most search marketers are entrepreneurial by nature, thus resiting in-house appointments.

The most common scenario over the last couple of years has involved traditional marketing firms outsourcing the SEO / SEM work, usually for paying slightly less than the contract is worth to them, but sometimes only breaking even or taking a loss for the sake of keeping their client happy.

AdMedia Partners is predicting a shift in 2007 from larger marketing firms hiring an in-house SEO/SEM, or outsourcing the work, to actually merging with our buying out the SEO / SEM firm. I would have to agree with their prediction, as I have seen this happen already with two other SEO companies in Colorado.

Any thoughts on what this means to the search marketing industry?