Do You Want To Play Inside Or Outside? (In-house Vs. Outsourced Paid Search Management)

Paid Search (PPC) plays a pivotal role in today’s integrated marketing plan. No one seriously questions the additional ROI and web presence generated through a properly run PPC campaign, but perhaps the biggest question a company will come across during a campaign is the first: should the campaign be operated in-house, or outsourced?

The first challenge you will face when choosing an in-house vs. outsourced campaign is a difficult paradox. A campaign that is being run in-house is almost always the best strategy for cost-reduction. However as the PPC market is constantly evolving and changing, an in-house campaign is frequently NOT the best strategy for maximizing total margin dollars.

Metaphorically it can be likened to the decision process on whether to outsource or "in-house" your personal investment portfolio (and for that matter, whether to retain or switch your fund managers). Some of that calculus, with a given "fund manager" might involve:

a) How are they doing versus an internal plan/baseline/targets?
b) How are they doing versus overall sector growth?
c) How are they doing versus overall mix type (in our world, broad ecommerce) growth?

Generally, there are four indications that can shift a company’s decision to choosing an outsourced PPC management:

- You expect the monthly media cost to be in the thousands of dollars or higher.
- Your product or service is available in a sufficiently large geographic area.
- You have hundreds or thousands of potential keywords.
- You have tried paid search before, and couldn't make it profitable

However once your PPC campaign builds enough momentum, it is generally common practice to make a final evaluation on whether or not it is time to in-house. It is inevitable that at some point in time an outsourced campaign will come up against serious diminishing marginal returns that will require changes to the website, its conversion rate, or more. These are often the issues that are hard to fix without an internal champion.

One huge challenge in the PPC arena, for those looking to build a “best practices” in-house campaign is that there are a bunch of folks who think they are world-class candidates, marketing themselves for “full-time” internal jobs. Unfortunately, only a tiny fraction of these “experts” actually are. Even worse, far too many of these “experts” will not, despite being on your payroll, devote “full-time” on your campaign, but will instead spend 10-20 hours a week wooing and serving freelance clients on the side.

There are hundreds of heffalumps and woozles out there for every real professional. Perhaps most disturbingly, not all the heffalumps of the PPC world are deliberate frauds -- many of them sincerely believe they are the real deal, since they saw with their own eyes past numerical improvements that happened on their watch. A definitive filter must be put in place to differentiate between those PPC candidates who MADE improvements happen, and the ones who simply benefited from a rising paid search tide hugely lifting all boats, be it the IT department putting up a better converting website, or the merchandising department finally getting the product mix, pricing, & promotions right.

The process of choosing in-house or outsourced PPC management can be convoluted if a company does not set distinct and manageable guidelines for projected goals. The only true test of which type of management best suites your campaign is: does it work?