Why Should a Business Outsource a PPC Campaign

[bhartzer]

I had a conversation with a company owner today who insisted that they were the best ones to manage their own PPC campaign. That got me thinking--why exactly should a business outsource their PPC campaign to a Search Engine Marketing firm?

- A SEM firm has years of experience managing PPC campaigns.
- Automation. SEM firms have software to manage it (is that a good thing?)
- SEM firms can create targeted landing pages.
- SEM firms have sophisticated tracking capabilities and are able to specify which keywords are performing better.

Can anyone add any more reasons to outsource a PPC campaign to a search engine marketing firm?

[Chris_D]

Many SEM companies have a wide range of marketing experience across many industries. We've recently found that some experiments which really improved ROI in one industry have been able to be applied to others - whereas at first pass - you really wouldn't have thought so....

I agree that experience has a lot to do with it - especially with smaller companies - time to get up to speed etc. Just using the interfaces all day in numerous accounts - versus 'having a look' at one account.

[David Wallace]

Time.

Does the company have adequate time to effectively manage a PPC campaign? That really is the question because if they do, a company can certainly employ a person to learn the ins and outs of PPC management and spend their time managing the company's PPC campaigns.

However is it more economically feasible for them to employ a person in house to do this or outsource it? Depends on their budget and size of campaign but I would guess in most cases it may cost a company less to outsource it then to pay someone a salary, benefits, etc.

I know that every PPC campaign we have taken over from a company managing it themselves, we have been able to bring improvement in what they were doing, some pretty drastic improvements.

[bhartzer]

we have been able to bring improvement in what they were doing, some pretty drastic improvements.

I'm curious--what type of improvements have you been able to bring? Better ROI? Less overall cost for the advertiser/company? More traffic and sales?

[David Wallace]

All of these. Typically it goes like this: improve selection of keywords, improve oganization of campaign through ad groups, improve quality of ads (many times companies use the same ad over and over again), increase impressions, improve CTR, keep CPC at managable level, improve ROI. It really depends on client's goals.

[andrewgoodman]

To get really esoteric about it: in addition to the superior campaign management, a dedicated consultant is more skilled at scanning the environment to determine if there are threats or trends that require incremental or fundamental strategy shifts. A business owner cannot properly do this scan because they lack the background/connections/data to do so (unless they want to go into the SEM business).

Why use a mortgage broker? Or commercial real estate broker? Because when time and money are at stake you pay a fair fee to avoid spending months coming "up to speed" on the pitfalls that might harm you. That delay/distraction could jeopardize your whole future, and still there would be no guarantee that you wouldn't fall into a snake pit of some sort.

So in a broad sense, it's about decisions, and one firm's limited ability to make good ones, because they have limited data at their disposal to inform those decisions. A rote reconnaissance exercise ("background research") can't compare to the total immersion of a professional with years of dedicated experience.

So say the doctors, lawyers, blacksmiths, and airline pilots. Who would argue? Some people want to learn to fly, but not many.

That said, the "pro" still needs to do the job, i.e. execute.

It might be worth a similar thread discussing why we don't ask the jet pilot for a proposal, flight plan, and list of references...

[rogerd]

Why should a business outsource its legal work vs. hiring in-house counsel? Or its cafeteria? Or its manufacturing?

In each case it comes down to how important that area of the business is to its overall success, whether the company has (or can develop) the needed skills, how much management attention will be needed under each circumstance, and the relative costs of each approach. Most companies outsource their legal work unless their volume is high enough to justify an in-house attorney; even in that case, they may still outsource specialized aspects of their legal activity. A product company that outsources its manufacturing is taking a huge and perhaps risky step, but may go that route because their partners offer better technology, higher quality, and lower costs than they could manage in their own plant.

Due to the continuing evolution of the PPC market and its tools, outsourcing offers some excellent benefits as described by others above. Perhaps I'm prejudiced, but I think in most cases PPC management SHOULD be outsourced because the benefits will outweigh the costs.

The only exceptions I can envision would be very small and very large operations. The smallest PPC players may need relatively little attention to their campaign; the biggest players have the resources to weigh developing in-house staff vs. paying an outside firm. The latter case may still favor outsourcing, but if PPC is a critical element of the advertiser's business, management may feel more comfortable operating hands-on.

As with most business decisions, it's hard to develop a rule that works in every case; clearly, though, PPC management is one where outsourcing will more often make sense.

[FeldBum]

What we always used to say at Did-it was: You focus on what you do best (your business) and we'll focus on what we do best (PPC). It's not worth wasting your valuable time on something better handled by professionals.

You don't install your own phone lines or make your own branded t-shirts (unless that's what you do), so why do your own PPC.

Of course, you could just hire someone to do your PPC, although a company is probably cheaper.

[bhartzer]

You focus on what you do best (your business) and we'll focus on what we do best (PPC).

That phrase works for some (potential clients) but not others. Some business owners won't outsource a PPC campaign because they know their industry better than the SEM firm. Their reasoning is that they have a better insight into what their ideal potential customer really wants--and therefore they believe they know which keywords to bid on.

Most often, though, the problem is that the business owner is too close to their business. The keywords they bid on are too specific in many cases--or their chosen keywords are phrases that only their company uses to describe a product or service.

[Web Diversity]

I'm going to have a go at removing my own appendix.

Seriously, if a PPC company gets the same information that someone in-house gets then the results will always be better.

In-house people get fed up and leave.
In-house people get paid the same money regardless of their performance.
In-house people go on holiday.
In-house people get sick.
In-house people can collude with others to say the results are the "best they can get"

Typically, the reason PPC companies can suffer is because someone forgets to tell them of out of stocks, the high margin products, the timing of sales, the competition's USP's.

A PPC company can never be as good as a client in their own field, otherwise they wouldn't be a PPC company but would be a competitor.

We've seen many a RFP as a result of someone leaving a company and either starting up their own company, or using the keyword list as a lever to get a sizeable "golden hello".

If PPC companies fail then sack them.

[Chris Boggs]

This hads been an interesting thread. I would also recommend reading this thread, which outlines some of the costs associated with outsourcing, and may yield more reasons to actually outsource.

[FeldBum]

Originally Posted by bhartzer

That phrase works for some (potential clients) but not others. Some business owners won't outsource a PPC campaign because they know their industry better than the SEM firm. Their reasoning is that they have a better insight into what their ideal potential customer really wants--and therefore they believe they know which keywords to bid on.

Most often, though, the problem is that the business owner is too close to their business. The keywords they bid on are too specific in many cases--or their chosen keywords are phrases that only their company uses to describe a product or service.

Such a response might be considered an insult to many the PPC experts resident here. PPC is much more than picking keywords--if it was, we'd be out of jobs. Certainly your company knows your market and customers best, and most PPC firms will work with you to pick a keyword list. Many firms, including Did-it, encourage speaking to people in all levels of the company to get a keyword list.

The expertise you are payiong for is generally the day-to-day management and optimization of the campaign, which can be very time-consuming.

Of course, outsourcing PPC is probably only worthwhile at a certain financial level. If you are spending less than $10K a month on PPC, outsourcing would probably be prohibitively expensive.

[bhartzer]

encourage speaking to people in all levels of the company to get a keyword list

That's great advice. If an SEM firm doesn't work with the client to learn all the aspects of their business to help develop extensive keyword lists then the SEM firm is not going to do the best job they could do for the client.

[bhartzer]

If you are spending less than $10K a month on PPC, outsourcing would probably be prohibitively expensive.

I don't necessarily agree with the $10k a month figure. In most cases, an SEM firm can be helpful no matter how much a client spends per month. It does, of course, depend on who is actually managing the campaign on a regular basis.

[cline]

Originally Posted by FeldBum

If you are spending less than $10K a month on PPC, outsourcing would probably be prohibitively expensive.

The less you spend on PPC the relatively more costly in terms of your own time it is to learn how to manage PPC and keep up with changes in the PPC programs. PPC campaigns spending of less than $1k per month can be quite complicated and worth outsourcing. It all depends on the value of the traffic and the value of your time.

[seobook]

Originally Posted by cline

The less you spend on PPC the relatively more costly in terms of your own time it is to learn how to manage PPC and keep up with changes in the PPC programs. PPC campaigns spending of less than $1k per month can be quite complicated and worth outsourcing. It all depends on the value of the traffic and the value of your time.

I have two clients who each spend less than $1000 a month on PPC ads. they both do well.

while a lower spend may mean a higher % is going to running the account it still can be a good spend if the targeting is right, etc.

If you see how much yelllow pages or some high end vertical directories (legal, doctors, etc) cost it is pretty easy to still have a healthy profit margin on even small PPC or SEO campaigns in many many markets.