In-housing is a growing industry trend at the moment with big brands like P&G and Vodafone cutting their agency rosters and taking more of their media buying in-house.
It’s not just Vodafone and P&G, the IAB published a report showing 18% of marketers have taken programmatic buying in-house and 47% have “partially begun the process of internalising the function, with plans to continue further down the path”.
But when does it make sense to in-house your paid search, and should you follow suit?
This article will look at the three key areas that need to be considered when in-housing:
- Ad buying platform (Google Ads, Bing, Yandex, Baidu)
- Paid search strategy
- Adtech (third party and bespoke technology)
1) Ad buying platform
When asked why advertisers are in-housing the IAB report showed that one of the key reasons was to seize control of their marketing.
At Clicteq we still run into a good number of brands that don’t own their own paid search accounts all the way up to FTSE 100 companies.
Whether you’re planning to in-house your paid search or you’re still going to buy media via an agency it’s crucial that you own your ad accounts on the different platforms.
Legally owning the data within these accounts is also important, to ensure that agencies can’t hold you to ransom.
Furthermore, brands should also own the commercial relationship with the platforms, negotiating their own credit terms allowing for full financial transparency.
2) Paid search strategy and execution
Things get a bit more complicated around PPC strategy and execution. There are three main ways that you can handle this, each of which generally depend on how much you’re spending on Google Ads.
The fully in-house model is most suited to very high spend accounts.
This starts to make sense when the cost of hiring an experienced head of paid search from an agency, who will be responsible for running strategy and a small team of paid search executives to work underneath them to implement the strategy is less than the agency fees that you were previously paying.
Based on the fact that most agencies charge between 12-15% of media spend this would start to make sense around the £250k / month media spend point.
The biggest downside to this approach would be that you’re likely to miss out on insights that a PPC manager working on different accounts at an agency would be able to bring.
It will also bring challenges in terms of keeping up with best practices. It will be fundamental that in-house practitioners continue to attend external conferences and training to ensure they keep on top of best practices in a rapidly changing landscape.
In-house agency and consulting model hybrid
For mid to high spend accounts in the region of £100k – £250k per month using a hybrid model should work well.
At this point it may not yet make financial sense to hire a head of paid search to lead strategy but you may want to add in-house resource to manage paid search execution to reduce cost and to give you additional control.
Here working with an agency that can lead strategy and help you choose the right technology stack is likely to be the best approach. A good agency should also be able to provide ongoing training to ensure best practices are used within your account and auditing to benchmark you against best practice techniques.
Outsourced agency model
For smaller spend accounts a fully outsourced approach is still likely to deliver the best value for money and results.
However If your going to fully outsource media buying it’s important that you retain full ownership of your own data and the commercial relationship with the platforms that you are buying ads on.
3) Ad tech
Ad tech is one area that should generally always be outsourced, due to the costs associated with building your own technology.
Don’t spend millions on building your own portfolio based bidding tool when you could rent one from a third party that will be far more sophisticated for a fraction of the cost.
Custom technology is also generally best to be outsourced. A good developer will be expensive and difficult to find, at last count there were around 40 developers in London that also had experience with Google Ads.
An agency partner with a technology department should be able to help you with one off technology builds on Google or Bings API and provide ongoing maintenance at a significantly lower cost that an in-house resource.
There is a lot to consider when thinking about in-housing your paid search.
When it comes to ad platforms ensure that you always retain both the ownership of your data and the commercial arrangements with the platform to ensure total transparency.
When it comes to choosing a model, it’s key to consider the financial implications and the pros and cons of each method to determine which one would best suit your requirements.
Ad tech is an area that in most cases should be outsourced. Building your own technology can be very cost intensive and with there being dozens of paid search tools out there.
In most cases you will be able to find a tool that does what you want and rent it for a fraction of the cost of creating your own tools.