Overcoming Common Obstacles To Bringing PPC In-House

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.

Cost Perception

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:

Salary Ranges By Experience From SEMPO.org 2011 Survey

 

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.

Time Perception

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.

Negative Keywords

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.

Power Keywords

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.

Related Topics: Channel: Search Marketing | In House Search Marketing

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About The Author: has over 7 years of Internet marketing and Internet retail experience. In 2005 he founded Empirecovers.com, a leading online retailer of protective covers for automobiles, motorcycles and boats, where he leads an in-house team of designers, developers and customer service professionals.

Connect with the author via: Email | LinkedIn



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  • http://www.blogation.net David Rodnitzky

    “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. . .

    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”

    I believe the IRS will also do your taxes for you if you want.

    No doubt there are a lot of snake oil salesmen in the SEM space, I’ve definitely heard my share of horror stories, but the notion that “The right person for PPC management on your team does necessarily have to be an expert in PPC” is just misguided. SEM – at a basic level – can be done by an intern. A complex campaign – one that includes search query analysis, proper account structure, ad text and landing page testing, multi-channel attribution, and geo and day-parting cannot be done by a non-expert.

    Find the right SEM agency and they will beat your internal ‘smart people’ any day.

  • http://www.empirecovers.com Jake Goldblum

    It’s your opinion and i respect that. However i have hired two SEM experts and neither of them are experts in SEM. I have been doing SEM for 7 years and it is not that complex and i do have a great analytics system. Think of the money you can save if you spent 15% of the ad cost it cost for a firm on more advertising or figuring out how to optimize a campaign.

  • http://www.blogation.net David Rodnitzky

    I think it’s a bit of an oxymoron to say you’ve hired SEM experts who aren’t experts.

    If you’ve been doing SEM for 7 years, you probably know your stuff. Then again, if you really think it’s “not that complex” you probably don’t know what you don’t know.

    The thing about SEM is that it *looks* easy. And, in fact, just adding keywords, negative keywords, ad text, and basic bidding are easy. Its the rest of the stuff – the stuff that can actually drive huge profit – that isn’t easy.

    Poker is an easy game to understand and learn. Trying going up against a pro and you’ll understand that a game that seems “not that complex” is anything but. But every day in Vegas folks come in for the weekend convinced that their mad skillz they’ve perfected playing their buddies in the basement are going to make them big bucks in Sin City. Usually doesn’t work out that way.

    Its the same thing with SEM. There’s a lot of ‘dumb money’ on AdWords – completely mismanaged campaigns by folks who have read the AdWords Learning Center and are convinced they know all they need to know about SEM. They may even make a little profit too, assuming they are either in a low competition vertical or happen to have a very cool product that sells itself.

    For the most part, however, they are 25-40% under-optimized. Google makes a lot of money that way. Again, not saying that this is you, but I am saying that true SEM experts can crush anyone who thinks SEM is straightforward and can be handled by a bunch of smart, non-experts.

  • http://www.adventuresinsearch.com Elisabeth Osmeloski

    Jake, David – let me bridge the gap a little between you on one point – David, you pointed a quote out in your first comment, “…notion that “The right person for PPC management on your team does necessarily have to be an expert in PPC” is just misguided.” –

    You are completely correct there – the fact that the word “NOT” was left out of that statement completely changes the meaning of it – and I missed that when editing, so I apologize to you both. It’s fixed now.

  • http://www.blogation.net David Rodnitzky

    Actually Elisabeth, I meant it with the “not” in it. My point was that hiring people who don’t know anything about PPC is a bad idea, unless you want a pretty basic and sub-par result.

  • http://www.adventuresinsearch.com Elisabeth Osmeloski

    I would have to disagree with you there David – people with an aptitude for math/statistics/economics and analytical & modeling skills are a natural fit to figure out the more complex problems you’re speaking of –

    For example, there’s a likely a mass of students coming out of college with these skills (and needing work) who likely have no prior experience in PPC – but they can be taught, and learn by going to conferences, other training, etc – and you’ll probably come out ahead, esp considering they’ll start on the lower end of the salary grade. Not to mention the fact that they’re tech savvy as well.

    Where I would agree experience comes into play and is NOT commonly associated with those analytical skills – is the creative side of PPC management.

    Good ad creative & landing page content probably is not best served by a math geek. I think you need a team of at least two smart ppl (to cover both left & right brain thinking) to be successful in this area.

  • Jeremy Mayes

    PPC and online marketing is a profit center if managed properly, not an expense. Employees, agencies….whatever your model the people running your accounts should be able to show how they are adding value to your business that more than offsets the costs associated with maintaining a relationship with them.

    Seems to me the focus here is about saving money. If that’s the goal then absolutely, hire the cheapest folks you can find with skills that are useful in PPC and cross your fingers that you can develop and train them well enough that they can meet your needs. Set your expectations and you won’t be disappointed.

    If your goal is growing your business (winning!) then recruit top talent, internally as employees or via an agency. You wouldn’t cut corners elsewhere in your business – HR, finance, customer service, etc to save money because it would be detrimental to your business. Should be no different with online marketing efforts. Talent wins, and that’s true in almost every area of business.

    An amateur can do good things for your business. A true expert can revolutionize your business.

  • http://www.blogation.net David Rodnitzky

    Elisabeth, if you were accused of a crime, would you hire someone right out of a law school or the most experienced lawyer you could find? If you were diagnosed with an illness, would hire a medical student or the top sub-specialist with years of experience? If your car broke down, would you post an ad on Craigslist and choose the cheapest person who responded, or would you go to the top mechanic in your city?

    There is a difference between knowledge and experience. Malcolm Gladwell has this notion of 10,000 hours of experience to become an expert. I believe that is a good benchmark. It equates to five years of full-time employment. It applies equally to SEM as it does to law, medicine, or any other service. Experts make smart decisions that only come from experience in making the wrong decisions in the past. That’s the difference.

  • http://www.empirecovers.com Jake Goldblum

    i am not escaping the meeting but i have a lot of experience in ppc. It really does take a detailed oriented person with good math skills. I am not saying to hire anybody but i have always hired people at around 50 to 60k to do the job. They are handling over a million dollar account. With a big firm it would have cost me 150,000 dollars. This person also has an mba from a good school and helps out with other reports. It can be taught but you need a smart person to learn how to do it.

  • F.C.

    $50,000 year salary does not include insurance, paid time off, training time and more. It is also much more difficult to fire a full-time employee if they are not performing.

  • Ian Howells

    Good post. I think, for me, the whole thing can be summed up as..

    Your $/hour spend on management will always be less with someone in-house.
    The level of industry knowledge will eventually always be higher w/ in-house.
    If you’re in/around a major city, you have access to the same talent as any agency there (though they’re not likely to apply – you’d need to seek them out).
    You can likely offer a PPC manager a similar salary, for less hours (agency life is 50+ hours/week. 9 hours a day is a reduction in work hours for a lot of folks) if you can afford an agency.

    However…

    You have to have time to train someone, or the money to hire someone ready to go.
    If you’re in a talent-shallow area, it’ll be tough to hire someone who already knows their stuff.
    Your manager will be insulted – only seeing how Google changes impact your business, vs. the larger view you can get from an agency.
    Your manager won’t be in an environment that’s 100% online marketing – staying sharp will be up to their own motivation, or their supervisor.

    If the talent is there, you can definitely scoop up someone who would otherwise be working at an agency just like one you would hire – except you’ll get more hours, and pay less for it. You just need to make sure they stay sharp, and stay hungry.

  • TSM

    “Your $/hour spend on management will always be less with someone in-house.”

    That might be true but what about the quality of work? If you could spend $50k to make $150k or $100k to make $400k – what would you chose?

    “The level of industry knowledge will eventually always be higher w/ in-house.”

    If you are working with the wrong agency, there’s no doubt. However, if you find a partner (not just a vendor), you’ll find the gap is much smaller.
    In house SEMs have a narrow view of the PPC space. Expertise in your business’s vertical is limiting. Exposure to SEM tactics for a variety of businesses sets agency SEMs apart.

 

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