Slashing SEM agency is a bad move

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search2_small.jpgADOTAS EXCLUSIVE — The economy has forced companies to scrutinize every line item and every budget for opportunities to save money and cut costs.

Advertising and marketing budgets are being slashed left and right. Focus often turns to taking specialized marketing services out of the hands of an agency and forming or hiring an in-house team. For those considering taking SEM management in-house to cut the perceived higher costs of an agency, here are some reasons why you should reconsider.

To begin, consider the disciplines your team needs to cover. First, you need a visionary – someone who not only understands all things Interactive Marketing but equally understands any business implications of the various tactics and strategies recommended. You need a strategist, someone who will immerse himself in your business to truly appreciate your value proposition and then help you navigate a path through the competitive landscape. Then you need various tacticians.

An experienced PPC Analyst who can expose inefficiencies and outmaneuver the competition. A seasoned SEO Analyst who can chart a course to the top of the search rankings. Analytics folks who can help you optimize conversions and better merchandise your offerings. Creative talent to develop messaging strategies and create provocative design elements. In all cases, you get what you pay for, and top talent in each of these areas does not come cheap.

Typically, when a company decides to hire an in-house team, they choose from a collective pool of talent that has emerged from boot camp (the agency world). These guys and gals are fully charged. They have had their hands in campaigns that range from B2B to B2C, products to services, and small cap to large. They have benefited from access to expensive research tools and trade groups. They’ve gone to SES, Ad:Tech, the DMA show and more. At each conference, they sit through mind-numbing presentation after presentation on specific tactics to improve results. They speak a big game, but are constantly supported by the collective pool of talent an agency brings to bear for its clients. In short, they are a fully charged battery with no way to recharge.

The agency is the charger and the individuals are the batteries! Once out of the agency world, their access to information dwindles and new tactics and strategies pass them by. The small, incremental gains that agencies string together to produce compelling results go away. You end up maintaining results that will inevitably decline as new competitive pressures emerge and costs continue to rise. Sure, you can partially make up for this by sending them to several trade shows and subscribing to all available tools and resources, but you then lose the cost benefit.

When you make the decision to bring SEM in-house, you are essentially choosing a direction. The person, or people, you choose will essentially set the direction for your campaigns. Because SEM combines traditionally left-brained elements like exhaustive data crunching with more right-brained endeavors like creative messaging strategies, you will be bound by the limitations of your chosen team.

should preface this by saying I have seen successful in-house SEM operations. They typically occur in organizations with a strong marketing culture and a general command of the online space. These operations are usually large-scale and involve a team of people, that when combined, run the gamut of necessary skill sets. Typically, these teams are managed by people who are in their own right experts in the field of Interactive Marketing. But even most of these companies end up using agencies for specific tactical strategy and execution.

It is not uncommon for Fortune 50 companies to have separate agencies for PPC, SEO, affiliate management, online display and other marketing elements. Each agency then answers to an internal ombudsman who has the ability to speak each of their languages and hold them accountable for the results the business desires.

For any company with a serious desire to tap the online marketplace, big dollars will flow that way. Aggressive PPC marketing alone can account for six figure investments each month, and the prospect that these budgets are controlled by people with little stake in the outcome is scary. Sure, it may be easy to say I am biased because I’m on the agency side. But the reality is I’ve been on both sides. I’ve built out and managed in-house strategies, and in some cases, it is necessary. But my preferred approach was always to develop and mature a strategy to a point where it made sense to leverage agencies to execute various tactics. Who wouldn’t want to benefit from a fully built out team – from visionary right through to tactician – all with no overhead, no turnover concerns and full accountability!

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1 COMMENT

  1. Of course, companies that lay off talented SEM specialists and then try to rehire new SEM people for a lower price are clearly retarded…especially in Florida. Duh!

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