Before I begin, I do want to say I respect a lot of people who do outsource aspects of their business to other companies, and there are some great companies that will do a great job. I’m writing from my personal experience, and what has worked for my business.
I am a big advocate of bringing all aspects of your online business in-house. It’s common wisdom that you can ”save” money by outsourcing, because you get experienced people working 24/7 on your company. However, for my business, outsourcing repeatedly cost more and delivered poorer quality work.
Pay Per Click (PPC) advertising is one area that I strongly advocate managing internally. The tips and figures I’ll be sharing should be helpful to small or medium size online businesses considering the advantages of bringing PPC in-house.
Just for a little background, I initially managed the PPC advertising, along with running the rest of the business, until the campaign grew to where it required 40 hours a week to be managed properly. I still look at the analytics, big picture and once in awhile tell the manager to change some bids but I am not the primary person running it anymore because I have to run the entire business. I have a lot of experience in both hiring a PPC manager and running an effective campaign.
The biggest obstacle preventing in-house PPC for most businesses the perception of the cost of hiring a full time PPC manager. I have found that perception to be pretty inaccurate. When I researched salaries and costs on websites such as glassdoor.com, and from interviewing other managers in the North East, the average salary range turned out to be 45 to 65 thousand dollars a year.
According to the recent SEMPO salary survey, this is not unreasonable for a person with 0-5 years search experience:
Now let’s put that into perspective. When I interviewed a handful of PPC firms, the average rate was 12.5% of your total advertising budget. If your PPC advertising budget is near $400,000, it would work out to be the equivalent of a $50,000 yearly salary.
Even if your budget is greater, your PPC management costs won’t increase; it’s linked to an individual salary instead of a percentage of the total cost.
When I interviewed potential companies to take over my PPC campaign, the average time they gave me to spend managing our account, per week, is about 5 hours: for a total of 20 hours per month.
If you hired a PPC manager full time, they will spend far more time and look a lot deeper into optimizing your campaigns. Remember an in-house associate knows the industry, knows the product, and knows the customer. Outsourced PPC account managers do not know your industry or your customers the way you and your employees do.
Automation & Software Solutions
Most SEM firms tried to sell me on software that manages PPC keywords and campaigns automatically, with systematic adaptation to adjust and refine its own effectiveness over time. Most software programs that I have researched cost about 3% of ad spend to 5% of ad spend.
I am now generally apprehensive about software for PPC management, because of my own recent experience. We found, in our business, that the software could not do as well as the human interaction, when we watched the conversion rate on our website go from a very good conversion rate to a 1.5%.
It was a harsh reality, but we quickly rebounded once we stopped using the software and brought in our own person.
The PPC Management Position
The right person for PPC management on your team does not necessarily have to be an expert in PPC. I have found that it is better to have personnel with the right skills sets (strong copy writing, math, analysis, and research skills) which broadens the job pool and decreases expert leverage for salary requirements.
I have hired three people to do PPC management for my large campaigns. None of them had PPC experience. There is a learning curve, of course, but it worked out better and saved money in the long run. Another thing to think about is what a PPC manager actually does. Obviously, one of the things that a PPC manager does is setup campaigns and creates ads for the campaign.
I have also found that when your ad spend reaches a certain threshold, representatives from Bing (Microsoft Advertising) and Google Adwords will assist you in creating your campaigns. Google was willing to help after I reached $10,000/month in ad spend, however, Bing was willing to assist regardless of my campaign size.
There are no limits to the complexity of the campaign your account representatives will assist you with, either. I worked with my Google representative to make campaigns segmenting all of my power keywords by state. All of the campaigns had different ads, keywords, and negative keywords based on the state. This would have taken me weeks to complete alone, but they were happy to do it for me and give me some trending statistics to help make decisions as well.
I must note that my representatives from Google are especially friendly, helpful people; I cannot say a bad word about them. They do rotate all the time, and I have a new person working on my account every 6 months, but that is what you ought to expect with a giant company like Google.
Adjusting negative keywords are an important part of the PPC manager’s role. Negative keywords are one of the greatest ways to optimize the campaign, however, they can also be very time consuming to implement. We currently run over 40 campaigns. One campaign for June spent over $15,000 generated over 8000 clicks with 3536 unique Google searches.
After sifting through the thousands of searches, we were able to create negative keywords to filter out poorer quality traffic. Our efforts in negative keywords resulted in savings of 19% of our ad spend. Because the results are so positive, and because the method is so time consuming to implement, it is best done in-house.
It took my specialist 20 hours to optimize our 40 campaigns; to put that into perspective, that same amount of time would have been all of the hours an outsourced PPC company would spend on your campaign.
If you manage a large campaign, you have probably noticed that despite having thousands of keywords, less than 5% of them convert consistently. These few strong performing keywords are sometimes referred to as power keywords.
In my experience at our company, many of my keywords convert, but only about 10 to 15 keywords have more than 10 to 15 conversions per day. Those few power keywords seemed to be 65 to 80% of the total cost of all campaigns.
I surveyed other SEM professionals in my local area, and found that they had experienced the same trend. This begs the question: does an outsourced PPC manager only manage ten keywords?
My advice to those outsourcing their PPC would be to identify and remove the ten power keywords from their outsourced PPC management: at 65-80% of the total cost of your campaigns, as this could save you a lot of money.
I would also recommend removing all of the branded keywords in your campaign from their management. (Branded keywords are terms that include your company name or your product names.) These, of course, are going to have a very high conversion rate, and these are easy wins for any PPC company, and not a true measure of their skill or performance.
Caution: Content Networks & Mobile Customers
Mobile users are notoriously poorer converters than their on-PC counterparts, and if you’re not prepared with a good mobile experience, you had better be prepared to waste ad spend on mobile users. One of the hard lessons I have learned about PPC is that if you do not have time to do PPC in-house, then you do not have time to make a mobile site.
A mobile site is a totally different experience than a website and, in my experience, has different goals and different things that can go wrong. Make sure you make different campaigns for your mobile site than your regular site, or turn it off all together. It will save you money in the long run, and when you are prepared with a mobile site, then you should try it.
To say I am not a fan of Google’s content network is an understatement. I have never wasted so much money in my life on the content network.
While at a conference, I cornered my Google representative and asked his take on the content network, and its effectiveness. His take was that content network is great for branding, converts very poorly for sales. I am sure that with the right strategy (probably with branding goals) you can find success with content networks, but everyone I’ve surveyed has had a similar experience to mine.
If your PPC agency is steering you towards advertising on content networks, make sure that they have demonstrated success in this area and have a specific, thoroughly vetted strategy for your campaign.
Beginning Step: Exact Match
If you are apprehensive about running a PPC campaign yourself, or are perhaps just starting out, begin with using the exact match term in Google Adwords. To do exact match, put brackets [ ] around a keyword in your Adwords account.
Google explains exact match as “Allows your ad to show for searches that match the exact phrase exclusively.”
Using exact match to start with will reduce the amount of negative keywords you have to work through, and make it easier to find your power keywords. Note that even if you use exact match, Google will still often times use unrelated keywords, so be sure to take a good look at your campaigns and filter out any irrelevant terms as they come up.
Ultimately, the decision to bring your SEM in-house should weigh all the costs and benefits to your specific situation. Hopefully some of the anecdotes and experiences I’ve shared will help you make that decision for your company.
While I always advocate managing all aspects of your business internally, that doesn’t mean that it is the best solution for everyone. Be cautious and thorough if you decide to outsource your PPC, and always remember that you know (and care) more about your business and your customers than any hired firm will.
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.