The eternal question for businesses both large and small: should you run your marketing in-house, or should you hire an expert?
There are numerous factors to take into account including level of expertise, the complexity of the campaign, existing internal resources and the management fee of said expert.
We’ll come clean. Most of these types of articles are written by an agency of some sort and will therefore naturally have a tendency to be biased towards the benefits of external help. Some would call it bias, some would call it scaremongering.
This article has also been written by an agency, but one looking to give as objective a view as possible. The truth is that both options are completely viable when everything goes to plan. In turn, both options can have significant downsides when those cogs do not turn quite as smoothly as intended.
Note: We previously explored this topic on Search Engine Watch back in 2014. I will include some of the points made in the aforementioned article, as well as adding some new ones.
Cost effectiveness
On the face of it, one of the main points of the argument boils down to cost effectiveness. For a business, the obvious question is: why would you pay a potentially hefty management fee if you could find the time in-house and do it yourself? Especially when PPC is just a bidding system, and does not require design or development skills.
Dig a little deeper, though, and there are key questions that you need to ask yourself on both sides of the coin.
Using an agency
- How does the management fee stack up against the actual PPC spend and subsequent ROI offered by the campaign?
- More importantly, what is the risk profile of the agency not hitting the expected ROI and as such their management fee actually removing all of the margin in the campaign?
Managing the campaign in-house
- Do you actually have the in-house resources to properly manage a campaign, or are you just going to try (unsuccessfully) to squeeze more time out of an already busy team? How will this impact other critical daily tasks within the business (i.e. opportunity cost)?
- If you are hiring a new person to run the campaign, what are their total costs? Basic salary is an initial indicator but what about benefits, pension, increased desk costs?
- Furthermore, is this something that you are committed to for the mid to long term? Hiring someone is easy, but if this is their sole responsibility, they may become an unnecessary part of your cost base should you not continue with the campaign. In the UK and EU especially, you can’t then just get rid of this unfortunate soul without going through a somewhat arduous process which will likely involve additional costs such as redundancy pay.
As you can see above, assessing the cost effectiveness of agency vs in-house involves a whole swathe of variables. No two businesses are the same, and as such, applying a standard equation to this situation is simply not possible.
Hopefully you will have enough information available to put together your own version of this equation and come to a decision with regards to the cost effectiveness of a PPC expert.
It all depends on the level of knowledge
Knowledge is power, or in the case of PPC, knowledge and experience will result in a campaign that outperforms one managed by a beginner. You might get lucky, but as with most things in life, the more experienced practitioner will come out on top.
Taking this into account when looking at how to manage a PPC campaign (agency or in-house), you must first look at the level of knowledge within your team.
The fundamentals of a bidding system and focusing on search terms that deliver ROI for the business are easy to grasp. However, to really squeeze the benefits of your spend on PPC you simply need to know what you are doing. Of course this required level of knowledge is only likely to increase with more complex campaigns.
As mentioned in the previous blog post on this topic, having an expert conduct the initial research and set up the campaign is often a cost effective method of making sure that the campaign gets off on the right foot. Much like an initial SEO audit, gettting an expert to set up the campaign could provide you with a sufficiently stable foundation to then manage the campaign in-house.
Again, we have seen a plethora of pretty decent campaigns that have been set up by business owners after doing their own research so it still comes back to the level of knowledge (and time) available to you.
How far do you want to go?
There is a reason why different marketing campaigns have different associated costs. Some are very simple, single product localised campaigns whereas others may involve national or international coverage with thousands of individual products.
Generally speaking, the more complex the campaign, the higher the budget, and therefore the higher the risk liability of an underperforming campaign. It doesn’t just come down to bid adjustments.
Great digital marketing campaigns break down the barriers between departments and channels. Teams now communicate with one another instead of remaining in their silos, combining to generate greater results than the sum of their individual parts.
As mentioned back in 2014, using an agency does give you access to more than just PPC experts at the top of their game. An awesome PPC campaign will also pull in web design experts, taking into account UX/UI, conversion rate optimization, content writing and remarketing (among others).
In sport it is often referred to as ‘marginal gains’, although you’ll find that an overhaul of your website’s user flow could deliver far more than just a marginal gain. Access to multiple disciplines is what you potentially turn your back on when running a campaign in house and it can make or break a campaign.
The core functions apply to the aforementioned single product campaign just as much as they do to the international campaign; it’s just that the latter has more to lose. As campaigns increase in complexity, there comes a point where you need to fully commit to the process and give the campaign the very best chance of success.
In this case, it is worth handing it over to a team that specializes in PPC.
Money talks!
In the end, the likelihood is that if you put an agency’s campaign next to one that has been run in house you would imagine that the additional level of expertise and experience would mean that the agency’s campaign would produce better results. All other things being equal you would choose the agency nine times out of ten.
The elephant in the room is of course the agency fees.
Yes, you could argue that in-house teams have a higher level of industry knowledge, or that a PPC expert will be able to make sense of the campaign dashboard and utilize some of the more advanced tools. But you already know this. That argument is pretty clear (and well covered!).
It all comes down to money. In basic terms, how much money will you get in return for the corresponding costs?
Agencies often have a minimum fee associated with PPC campaigns. Therefore if your budget for PPC is particularly modest, for the sake of argument let’s say £500 per month, you will probably find that the agency fees will exceed the margin made from the campaign.
Remember to look at your internal margins rather than revenue! In this case it is likely that having an expert set up the campaign initially will be the only option that would produce a meaningful ROI.
On the other hand, if the agency fee is only a small percentage of the total budget spend and in turn, the margins from the campaign exceed the agency fee then it makes sense. As the Americans love to say, “if it makes money it makes sense”. The agency provides a higher level of expertise, and may also allow you the flexibility to stop the campaign at any moment.
One size doesn’t fit all
Hopefully my ramblings have shown that this not a one size fits all argument. There are simply too many variables.
My advice would be to base your decision on real world facts. For example, we often see business owners try to run campaigns themselves (or ask one of their team to do it) without seriously considering the time expenditure required. Trust us when we say that if you don’t have the time, it won’t get done. You’ll end up spending a chunk of money for three months and then giving up without making any adjustments.
On the other hand, if you do have the time you could find yourself getting to grips with the campaign and increasing your sales as a result. It may even mean that you can reduce spend on other marketing channels, all without having to pay an agency fee.
Consider your options before making a decision. Don’t just do PPC for the sake of doing it; there should be a real business case put forward which will provide real data as to whether hiring a PPC expert is going to be a viable option.
If it transpires that running the campaign in-house is going to work in the real world, then great, go for it! Be flexible, be realistic and you should find yourself making the right decision. Remember – both options can work.