Should you in-house your PPC?

This is a question that’s being asked a lot at the moment, but is it right for your business? From our experience, ‘in-housing” always fails to deliver when competing with an agency.

So what does in-housing actually mean?

According to Investopedia:

In-house refers to conducting an activity or operation within a company, instead of relying on outsourcing. This occurs when a firm uses its own employees and time to keep a division or business activity, such as financing or brokering, in-house.

But do you try to in-house the lot, or do you pick and choose and leave certain bits to the professionals? Here are the pros and cons of in-housing:

The Pros

1) “Greater transparency?”
This is often cited as a reason for in-housing but quite frankly it’s ridiculous that it can even be used as a reason. It’s a real shame that a small handful of agencies who don’t allow their clients to access their media accounts have given the industry a bad name. If you don’t own your entire ad accounts and payment relationships with publishers like Google or Facebook then you need to find a new agency. Right now. Seriously.
If you’re working in partnership with a decent agency, transparency has never and never will be a concern for you; you’ll own your own data, your accounts and your relationships with publishers.

2) “It’s cheaper than using an agency?”
This is the most common reason I hear and couldn’t be further from the truth. Yes, if you compare “total agency fee” vs “salaries for an in-house team” then salaries will obviously come out lower, but salaries are only the tip of the iceberg when it comes to the costs involved in running a best-in-class biddable team. More on this later.

3) “More control”
Really? See above about finding a new agency, pronto.
But seriously, it’s tempting to think that if your agency is in-house IE sitting within the 4 walls of your business, then you exercise greater control but this simply comes down to the agency you work with. There should be full visibility all the time. No question.

The Cons

1) Cost of building an in-house team

a) Recruitment
Before you can run your in-house team you’ve got to find it which takes both time and money. To build even a very small team of 3-4 people you’re looking at at least 6-12 months (most experienced biddable talent are on 3 or even 6 month notice periods). Once they’ve joined your company you will need to allow another 3 months at least for them to acclimatise, learn your business and get up to speed with all things PPC related.

b) Lost opportunity cost
Can you really afford not to be running best-in-class campaigns whilst you’re busy trying to get your (in)house in order. Inevitably you’ll turn to an agency in the interim (doubling up on costs) – and probably paying a premium for a short-term contract.

c) Office costs
It may be obvious but your team will need desks, computers, office space, training etc. etc. – this doesn’t come out of their salary, it comes out of your bottom line.

2) Cost of running an in-house team
Once you’ve built the team, you then have to actually run it, and at least match the performance you were getting from your agency – otherwise what was the point of the last bullet point?

a) Technology
I can only think of one or two in-house teams that have built their own biddable technology without external help and they have actually admitted that it was bloody hard and certainly not as cost effective as using an agency. They are also both huge businesses with in-house teams now in the 30+ people region. So if you’re not building your own, you’ll be using an agency’s to stay ahead of the game.

b) People
People are fantastic. The team we have at Katté & Co are the single reason for our success, but the right people in the right jobs don’t just turn up ready to perform at maximum capacity overnight. It takes time, a LOT of time, and money building a brand and a culture that attracts the very best talent. Once you’ve got it, you need to retain it and you can no longer just throw money at that problem – tech-savvy millennials are after a lot more than just a big paycheck.

c) Training
Once you’ve found and retained your first class talent, you’ll need to be training them, constantly. Our industry, in such a fast paced digital space, changes more often than any other and you’ll need a world class training scheme and structure in place if you’re going to keep your first class talent, well, first class. More resource and money.

d) HR, & Administrative costs…
Salaries aren’t the only financial costs, you’ve got national insurance, pensions, HR and admin resource to consider too.

3) Lack of Market Visibility / Context
Agencies by their very nature have larger teams, greater depth of knowledge and greater expertise than in-house teams. That’s a fact. We work across multiple clients, sectors and markets and chances are have already stumbled across and solved most of the challenges you’re facing. That’s experience you can’t re-create or then develop in-house. If your CPCs have taken a sharp rise – you’ll want to know if it’s just you, or if it’s industry wide. You can’t do that in-house.

Agencies are here to stay

Of course you might say I’m biased here, but in-housing isn’t cost effective and control and transparency from your agency partner should be a given. In summary, with an Agency you’ll get

  • Better ROI
  • Market context and visibility
  • Scalability
  • Future-proofing for your business

And very importantly (something never to be taken lightly):

  • The very best talent.

Agencies will always attract the very best talent – the job on offer at agencies is much more exciting and varied than the equivalent in-house role. Due to the very transient industry the onus is on Agencies to create the very best cultures and career development opportunities that will enable them to retain the very best talent – if they didn’t they simply wouldn’t still exist today.