There is no doubt that you need to watch out for the SEO/SEM companies that are more motivated by immediate income than immediate results. I think everyone will agree that if you receive positive, quantifiable results from any of your vendors, that the money you pay for their services becomes less of an issue.
I understand vendor issues as well as the next guy. I also have a unique take that many don't. I have been in the automotive industry for 22 years as a sales consultant, F&I Manager, Used Car Manager, New Car Manager, and General Sales Manager. I haven't seen it all, but I've seen quite a bit. The uniqueness comes into play in regards to SEO/SEM due to the fact that I am President of one such company, Elite Search Engine Marketing.
I am currently functioning in both roles. One as a General Sales Manager of the 12th ranked Mazda dealership in the nation, Kings Mazda, and also President of my SEO/SEM firm.
Being in the car business, I understand that it is all about results. I fight the negative perception everyday as a vendor. Much like the car business, where there are many dealers looking just to make the sale and not caring about a long term relationship, the same holds true in the SEO/SEM industry. We know that many of these companies will go by the wayside on an almost daily basis, but the damage they cause along the way is sometime irreversible.
My suggestion is to dig deeply into the SEO/SEM companies strategies. Have them spell everything out in writing. Get complete specifics in regards to their methods and philosophies. If you begin to get any type of push back to your questions, you then have your answer, they would not be the vendor to partner with.
If anyone would like additional advice, whether your looking for a new vendor or just want suggestions for your current one, I welcome your questions and feedback.
Remember, do your best possible investigative work up front. Firing a vendor isn't an enjoyable experience and it's also a negative reflection on you, if you were instrumental in making the hiring decision.
Dan