7 reasons to use an agency for paid search
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In most instances, I believe paid marketing initiatives should be managed by an external agency. When I talk to companies about their paid marketing initiatives, they are often biased toward hiring full-time employees to manage their efforts because they believe it is more efficient. This is mistaken, and having seen many companies on either side of this equation, agencies are usually the better option.
Here are the 7 reasons I frequently reference when I try to convince potential clients of the upside to an agency vs hiring in-house.
Flexibility
Very few organizations would ever sign up for the fixed and recurring costs of setting up a physical data center for technical needs; instead, they opt for the flexible and more efficient options of AWS, Microsoft Azure or Google Cloud. Performance marketing should be viewed the same way. Working with an agency allows a company to scale up and down or even pause paid marketing if needed. A full-time employee is a fixed cost with a salary that must be paid regardless of current needs.
Even worse, when there is a need to scale down, the employee either is retained and becomes bored with less work or the employee is let go. In both cases, ramping up spending as business needs change cannot be done very quickly.
Better talent
Anyone who has tried hiring in the last few years knows how difficult it is to find good marketing talent. The demand for a limited supply of expert marketers has never been higher, and even junior talent with little experience is commanding higher salaries. By choosing to work with an agency, a company can have access to talent they might not have otherwise been able to hire. While a junior employee might be the person who directly manages an account within the agency, they will be supervised and mentored by people with significantly more experience.
It’s cheaper
This may come as a surprise to many people who have evaluated agencies and then opted not to retain one because of price, but I think if you do the math here, you will see in nearly all cases, an agency is less expensive on several fronts.
Most agencies charge between 5-15% as a percentage of spend for their management fee. Using the more expensive price of 15% would mean a cost of $150,000 on $1 million of spend. (More than likely, this fee would even be capped far lower, but for the sake of argument, let’s keep it uncapped.) Comparing that to the all-in cost of a full-time employee, many companies might discover that they are paying more than 15% of spend. A second reason that agencies are actually are cheaper comes down to learning curves.
Learning curve at scale
In any performance marketing effort, there will always be a learning curve on the audience and platform, which inevitably will cause inefficient spending as a new paid marketing manager gets up to speed. In an agency, the team managing the account will be quicker to hit the ground running as someone on the team has already experienced your challenges on another project. Agencies are not immune to learning curves, but the actual curve is spread across all of their accounts and not just on your one project.
Agencies grow with you
I always believe it’s essential to work with an agency that has experience with extremely large accounts, as how to manage accounts can absolutely differ at varying spend levels. An internal employee might be fantastic at lower spend but may struggle once the spending starts to scale. An agency with experience at all spending levels will seamlessly be able to update strategies and tactics as spending grows.
Reliability
Agencies typically have SLA commitments, and they will be available at whatever times they commit to. That means if your account rep falls ill on the eve of Black Friday there will be a fallback to ensure you are getting the support you need; the same can’t be said of internal employees.
If an employee gets sick, it will be their manager stepping in to fill the gap. If you are the decision-maker in the agency vs employee decision, know that you are the fallback in most instances when you hire internally.
Broader capabilities
The one guarantee about marketing is that things will constantly be changing and it will be impossible to predict. While Google and Meta eat up large chunks of global digital spend they are far from the only platforms. Each of these platforms has its own nuances, so what works for Reddit might not work on Quora, or learnings from YouTube don’t necessarily work on TikTok. For a company with a broad appeal they might have to hire niche experts for each of these platforms, but with the right agency, you can have access to an expert in each platform.
If you are growing a paid acquisition effort don’t write off agencies just because you think having employees manage your paid marketing efforts is less expensive and more efficient. I have been fortunate to work with some fantastic agencies, and I am always up for making intros. Just reply if I can help.
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