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The 5 Secrets PPC Agencies Don't Want You To Know

Posted by Mark Ellis on: 2007-07-02 23:20:48

Self SEO > Pay Per Click Articles


Nearly three-fourths of companies that outsource their pay-per-click search marketing to agencies are dissatisfied with their results, and only 21 percent are completely satisfied, according to a Jupiter Research published late last year.

What causes this dissatisfaction, especially for B2B marketers? There are five factors at work:

• Most agencies specialize in consumer search marketing and their services are inappropriate for your unique needs as a B2B company.

• The agency business model skews in favor of the largest spenders and under-serves the majority of B2B advertisers.

• Agencies will never understand your customers and your business as well as you, especially B2B firms that sell more complicated products and services.

• The need to coordinate with outsiders implies latency and information loss, meaning you lose the flexibility and agility to react quickly.

• Outsourcing means losing control over a critical portion of your demand generation strategy to outsiders who may have different incentives than you.

The main value provided by agencies is expertise with SEM, and as I'll explain, you can bring much of that expertise in-house by using the right kind of pay per click management software. A technology solution can create the best of both worlds: the control and business knowledge of doing it yourself, combined with the SEM best practices and techniques of an expert.

Before diving into this "inconvenient truth", it helps to understand the common arguments used by agencies to convince B2B marketers to outsource their PPC campaigns.

Why Companies Outsource PPC Campaigns
The first argument falls into the broad category of FUD (fear, uncertainty, and doubt). It takes on various forms, but comes down to this basic point:

"Search is really, really hard – you should leave it to the experts."

Tactics like this are meant to instill fear that if you don't outsource, you will fail miserably with search. The head of one agency likes to say that "There are only two kinds of marketers at the top of the auction based search results: Brilliant Marketers and Total Lunatics." Since most people don't think of themselves as brilliant search experts, the implication is that if you don't hire his services then you must be a total lunatic.

A more subtle form of this argument says that the world of PPC is changing so fast that you could never keep up yourself. No matter what form it takes, this argument is self-serving to the agencies. Although it might have been true a few years ago, today the in-house B2B search marketer has access to easy-to-use PPC management software. These tools help to level the playing field by automating the techniques and best practices used by the agencies.

While the first reason B2B companies outsource their PPC marketing has to do with knowledge and expertise, the second reason has to do with time. The core of this argument is:
"I'm too busy to manage search. It's easier to pay an agency to take care of it for me."

I have no doubt that most B2B marketers feel beleaguered for time, and that dealing with PPC can feel like yet another burden. The allure of being able to pay an agency to have one less thing your plate is appealing. This can be a valid reason to hire an agency, although the appeal fades once you realize you should be highly involved on an ongoing basis to get the best results from an agency. The agency doesn't understand your business like you do, so they can't react to competitive changes or deal with new business initiatives as well as you can. The only things they can do without you are tweak bids, use tools to suggest new keywords, and generate reports – all tasks that automated software can do better and cheaper than a consultant can.

Why Companies Shouldn't Outsource PPC Campaigns

1. Most agencies don't specialize in B2B search marketing. B2B search is different from B2C search, meaning it requires different techniques and optimization methods. B2B keywords tend to be lower-volume than B2C keywords, but the value of a B2B lead is much higher. Also, B2B transactions have a more complex sales cycle, involving multiple decision makers – each using search in different ways, with different motivations, and at different times during the sales cycle.

An agency that works mostly with consumer companies may not have the proper expertise to deal with the specialized needs of B2B.

2. Agency business models are focused on the largest spenders. Agencies are, by their nature, service businesses that are only profitable if companies spend $10,000 per month or more on search. (These minimums keep going up every year.) That leaves the majority of B2B companies out in the cold. Be wary of agencies that promise to provide reasonable service at levels below $10,000, since at those levels an agency can profitably give you only a few hours a month. It is much more profitable to focus on the largest accounts, leaving the smaller accounts to run mostly as-is. (Of course they still earn their fees every month, regardless of how much time they spend on your campaigns.)

3. You know your business better than the agency. One of the most important skills for PPC success is picking the right keywords that your prospects actually use when they search – something you know best. Also, when determining rankings, Google and now Yahoo! care as much about the relevance of your content as they do about your bid (aka "what you say is as important as what you pay"). This means a good understanding of your business and your industry is at least as important as being a search "expert". Over time, the balance of power between business knowledge and SEM knowledge will shift even further towards business as Google continues to find ways to reward relevant content and discount search agency tricks.

4. In-house improves flexibility and the agility to react quickly. I recently met with one B2B marketer who was paying his agency a whopping 40% of his overall PPC budget, yet they were still bidding on words that were not converting to leads. All the back-and-forth emails and phone calls required to coordinate changes created latency and information loss. This meant it took weeks to get a new campaign launched. In contrast, his competitor who kept search in-house could launch new campaigns in under one day. It's no wonder the competitor had better PPC results.

5. Agency incentives are not aligned with your goals. When you outsource PPC, you give up control over how your money gets spent. Whatever your agency promises, their first incentive is to grow their own business – meaning they will usually tell you that search is performing great. This is the fox guarding the henhouse! It is up to you to put their information in the context of your overall demand generation strategy and to make the critical decisions about whether your marginal dollar is best spent on search or another demand generation activity.

When to Bring Search In-House With Technology

There are a few basic skills required to succeed with SEM: pick the right keywords, optimize bids to achieve desired business outcomes, create great landing pages that drive conversions, and use testing and measurement to continuously improve your process. Each of these requires business expertise and SEM expertise. Only you can provide the business expertise. SEM expertise can be found in an agency, and for some companies that will always be the right choice. For example, I have no problem with outsourcing your SEO campaign. Also, if you don't use search today and outsourcing gets you started, or if don't have enough time to spend on search, then using an agency is certainly better than doing nothing. (This is especially true if your agency takes advantage of technology to automate the tasks that software does best!)

However, I believe that your best results will come from having your PPC campaigns managed by the true experts – you. The same techniques and best practices used by agencies can and should be automated with technology. Choosing B2B search marketing software allows you to optimize your PPC campaigns like an expert, without the loss of control, latency, and overhead associated with an outside agency. And that's an inconvenient truth for the agencies.

Jon Miller is VP of Marketing for Marketo, a provider of affordable, easy-to use-marketing automation software that helps B2B marketing professionals drive revenue and improve accountability. Jon's blog, Modern B2B Marketing, explores best practices in business marketing, ranging from pay-per-click management to lead nurturing to marketing accountability. The Strictly Business column appears Wednesdays at Search Engine Land.




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