Should You Outsource PPC?

4 Comments Written on June 22nd, 2010 by
Categories: Business

Should you hire an external PPC consultant? Or can you do the job better and/or cheaper inhouse?

Large companies – companies with over 1,000 people – typically have less need to outsource than smaller companies. Existing in-house teams can often adapt in order to provide extra services, with a little extra training required. Smaller companies typically benefit the most from outsourcing, as the overheads for each added employee can be considerable. However, the decision whether to outsource really comes down to a cost benefit analysis, regardless of size.

Which option would suit your company best? Let’s take a look at the issues.

PPC Outsourcing:

Consider the following:

Data security – PPC data is valuable. If your business is driven by marketing, particularly internet marketing, then how comfortable are you with this data being in the hands of a third-party?

Control – If the internet marketing function brings in a significant chunk of your business, then your choice of partner is critical. For some, the risk cost will simply be too high.

Incentives – ensure that the performance incentives are appropriate. For example, some PPC agencies bill a percentage of spend. The problem with this model is that it encourages high bidding for clicks, which are only ever likely to increase. The incetives should align with your business case. Be sure to implement a means of tracking PPC traffic to measurable business goals.

Low Spend – small campaigns are relatively straightforward to manage in house if you have existing marketing resource i.e. spending in the thousands per month. The function is typically a part time role, and the time cost can be minimized further by using third-party semi-automated campaign management software and tools.

A PPC agency starts to make sense when the monthy spend is in the tens of thousands and higher, as such campaigns can quickly become complex and/or can be regularly optimized to drive down total campaign cost. We’re talking about good PPC agencies, of course. There are plenty of lousy ones. Which brings us onto…

Management Overhead – third party suppliers need to be managed. They need to have objectives set. They need to report on a regular basis. Performance needs to be monitored. This is also true of inhouse PPC management, of course, however the proximity of an inhouse employee, and the fact they’re engrained in the culture and process, often makes this function easier.

Business Knowledge – any marketing function needs to be closely aligned with business goals. Tyically, PPC managers work on multiple accounts and have a tendancy to focus on numbers, as opposed to wider company objectives. This remoteness can make external consultants less effective than someone who lives and breathes your business and culture each day.

PPC Inhouse

Expertise – PPC management is specialized and ever changing. This requires on-going training and adaptable employees who can wear hats of both marketing and technical expertise simultaneously. PPC agencies are specifically geared for this task.

Lack Of Resource – PPC takes time, and your existing employess may not have it. PPC invariably grows more and more complex, especially if the return on investment grows. Whilst it’s easy to manage basic campaigns – low budget/low numbers of keyword terms – it can become time consuming to manage large campaigns. PPC agencies use economies of scale and specialized tools that may not be readily available elsewhere.

Poor Results – If you’re new to PPC, then you may not have adequate benchmarks to quantify performance. An external agency may have years of experience in your market sector, and be able to provide a wealth of market data.

High Costs – not only is there the cost of hiring extra staff, there is the opportunity cost of having that staff not focus on something else. Obviously each businesses cost structure is unique, but generally the bigger the PPC spend, the more value you’ll get from outsourcing to a good agency.


Consider inhouse PPC if:

  • You require high levels marketing/business integration.
  • The function can readily be absorbed using available staff and management resources
  • The level of complexity is manageable. Typically, campaigns in the tens of thousands per month featuring thousands of keywords are best managed by a dedicated specialist.

Consider Outsourcing PPC if:

  • You have a high level of spend i.e. in the tens of thousands per month and above
  • You don’t have readily available resources
  • The PPC function is not a mission critical part of your marketing mix.

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4 comments “Should You Outsource PPC?”

Great post Giovanna. I believe if a firm is willing to spend the premium to have someone else build and/or monitor their campaigns for them, more power to them.

The one thing to realize, however, is that even then they are not guaranteed success.


… Consider Outsourcing PPC if: You have a high level of spend i.e. in the tens of thousands per month and above …

I’d say exactly the opposite — the more you spend on PPC, the more it makes sense to hire an internal search marketer.

Note that I say Search Marketer and not PPC consultant or PPC account manager. It makes a big difference.

For most niches it takes a in-depth knowledge for product, market and competition to be a successful advertiser. SEM is no exception. In my experience, PPC agencies don’t take the trouble to learn the product, especially those who insist on being paid a percentage of the spend.

There would be a competitive advantage, but not sustainable competitive advantage. IT is easily copied and as such, can not be considered sustainable. Only an asset/advantage which is not easily copyable can be considered sustainable. Check the writings of Jay Barney for a good discussion of the difference between sustainable competitive advantage and plain competitive advantage.

I am usually doing a search online for tips to help me. Thanks!

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