Features

Limitations of In-House Paid Search

Written on
Jun 18, 2010 
Author
Michael Flanagan  |

handstied_smallADOTAS – Once upon a time an environment existed in which agencies were the paid-search experts. The reasons were simple: they had resources to attract top talent for their teams and, from the diversity of their programs, had a knowledge base that grew exponentially.

Imagining a trend like this continuing indefinitely was difficult, especially when factoring in industry turnover and the volume of paid-search knowledge. However, as a small-business owner, is handling paid search in-house enough to achieve your marketing goals? Data released earlier this year suggests that it is.

One of the key findings stems from Econsultancy and SEMPO’s annual “State of Search Engine Marketing Report”: 81% of business respondents implement their own paid-search programs, up from 78% in 2009. Meanwhile, agencies that engage in paid-search programs dropped from 86% in 2009 to 76% in 2010. This is a significant shift –  and I’m not convinced it’s the right one.

Prepare to be offended.

Paid-Search Challenges

The first thing to realize is that businesses aren’t equipped to handle paid-search challenges the way agencies are. SEMPO’s report indicates the following as top concerns by business respondents:

  • Measuring ROI (43%)
  • Optimizing destination pages (40%)
  • Researching/choosing optimal keyword phrases (35%)

Gauging ROI can be challenging in that businesses don’t always know what to measure or what they want to achieve. This requires asking the right questions: What are your goals? What equals success? And so forth. But for more probing questions, agencies help long lists of clients do this regularly.

Optimizing destination pages is closely aligned with measuring ROI. If you’re unsure of your objectives, consider what you’re going to optimize (or if it can be optimized). Agencies’ major advantages are shared resources and experience that goes beyond paid search (but can shape paid-search programs): SEO, website development and other digital-media services. Agencies can also execute programs that are outside of a client’s competency, such as landing-page testing and development.

While in-house programs typically rely on single paid-search laboratories, agencies have portfolios of them, which are extremely helpful when identifying target keywords. Agencies can access historical performance while in-house teams have to start from scratch.

Agency Benefits

Time is scarce in all facets of business, but in-house paid-search teams need to be especially conscious of it. Consider the steps that go into a paid-search program:

  • Keyword research
  • Campaign architecture
  • Bid management
  • Copy development
  • Landing-page development
  • Tracking set-up
  • Testing/routine monitoring
  • Follow-up/optimization

Agencies’ large-scale execution of paid-search programs affords them the ability to develop efficient systems for carrying out said steps. Time savings provide more opportunities to monitor critical elements, such as campaign monitoring and analysis and allow clients to focus on strategic decision making.

Another key consideration is the changing search landscape. Staying abreast of changes in search platforms and behaviors is almost a daily endeavor. Without proper attention and quick reaction, significant opportunities are likely missed.

The following list includes examples of what search marketers face. In the end, it combines to create more fragmentation, competition and, because of changing search features and algorithms, uncertainty.

  • Never-ending keyword lists.
  • Increasing keyword complexity: Average search-query length is increasing.
  • Increasing competition on search-engine results pages: Spending is up by nearly 14%.
  • Increasing barriers in search results (e.g., universal results, Google 7-Pack and new ad features such as “Location Extensions for Multiple Addresses”).

One reason agencies are better suited for these changes is that they have access to tools which smaller businesses might find impractical. Two examples include Adgoroo and DART Search.

  • Adgooroo provides competitive intelligence that helps agencies respond more quickly to competitor moves.
  • DART Search provides automation to establish rule sets for keywords, based on client goals and objectives and can adjust campaigns in real-time to hit the “sweet spot.”

Bottom line: Agencies can respond more quickly than smaller businesses.

The below examples provide insights into the differences between agency and in-house paid-search efforts.

The first chart illustrates the time required for in-house paid-search teams to execute SEM programs. Notice that, on average, in-house search marketers take nearly five months to get their programs fully operational. Data is based on SEM, as a whole; however, the example remains instructive, considering SEO programs alone should be below this benchmark.

Picture 1

Source: Marketing Sherpa, “Search Marketing Benchmark Guide 2010.”

The second chart illustrates the degree to which a program can be optimized, and it shows lower costs per click for agencies than it does for in-house teams (when values are extrapolated over thousands of clicks per month, serious change ensues).

Picture 2

Source: Marketing Sherpa, Search Marketing Benchmark Guide 2010.

Let’s go back to SEMPO’s earlier findings about more in-house teams engaging in paid search. Given the evidence, it seems that as campaigns (and the platforms they’re run on) become increasingly complex, just the opposite is true.

So what is sparking this flame of interest for businesses to go it alone in paid search? Given the effects of a struggling economy on budget-conscious marketers and the sense that “Google is all you need to know,” it’s no surprise that business owners are convinced they have everything at their fingertips to run successful in-house campaigns.

For some, this may be true. But for those looking to cost effectively hit their goals and objectives (I suspect this is most businesses), agency-run paid-search campaigns are the way to go.





Michael Flanagan is CEO of 15miles, a full-service marketing agency specializing in digital and offline media. Headquartered in New York, 15miles is the world’s largest local-search agency with more than 40 years of industry experience to support its offline, online and mobile solutions for businesses of all sizes, including Fortune 500 companies. As CEO, Flanagan oversees 15miles’ profitability, operational-efficiency and senior-management teams. He works with these teams to establish performance goals and priorities among departments, delegating responsibilities to keep the entire company on track, on time and on budget. His knowledge of the marketing industry is applied to successfully developing strategic relationships outside the company, guaranteeing the proper networks are in place to meet 15miles’ objectives.

Reader Comments.

Thanks Michael – great article… Very self-serving for me, as I’m constantly having to explain to clients that although they’ve been burned by other agencies that claim they know Search, an agency that properly does it has plenty of benefits. I’m going to add some of these to my list for them! That being said, one that I think you left out is mentioning that Search is part of your marketing mix, and if the agency is working with other marketing elements (social, PR, advertising, etc) then it is going to be a natural for them to incorporate search into their overall strategy. Again – it has to be done right the first time, but when it is, it works with the marketing mix!

Posted by Media Two Digital Media | 7:20 am on June 24, 2010.

Sure clients can do it, but will they do it properly, and will their results be maximized..doubtful..
SEO like anything is something the average person can do, but should they?
I recently took on a proposal to build a couple of walls in my basement. Building a few walls is not out of my scope of carpentry skills, but would my time be better spent else where? Yes, with out a doubt.
The same goes for SEO.

Posted by Adam | 12:07 pm on June 25, 2010.

Leave a Comment

Add a comment

Tags: , , , and
Article Sponsor

More Features