Why you still need a SEM agency
I have recently been asked a question a few times by prospects intending to start their own ventures and evaluating their start-up marketing strategies: is it really necessary to engage a SEM agency to manage our Google Adwords campaign, considering that the self-serve platform is supposedly so easy to use. Such a question obviously points to an existential threat to SEO/SEM agencies like us; however, I am glad to have been asked this question with a surprising frequency as it forced us to re-evaluate our value proposition to our customers.
My answer to the questioning folks was forthright. Yes, Google Adwords (or for that matter, the Bing search marketing platform) is extremely easy to set up and use and anyone can get started with their SEM campaign in a few hours. An agency is not an indispensable requirement. However, before you decide that managing the campaign in-house is the way to go, there are a few factors to consider.
- How important or critical is SEM to your overall online marketing strategy?
- How big is the advertising budget?
- How much resource are you willing to deploy to manage the campaign?
Understanding the SEM agency pricing model
SEM agencies, including us, typically charge clients in one of three ways: a flat monthly retainer fee; a percentage of the monthly ad spend, which is usually in the 10-15% range; and a cost per lead or cost per sale.
The nature of the website/ business and the ad spend often determines which of the above models is used for a particular client. If your advertising budget is very small, say Rs.10,000 per month (many SMEs start with budgets like that), an agency is likely to use the fixed retainer model and it is likely that you will find the service fees to be much higher than the advertising spend.
Similarly, if the ad spend is significant, say, over Rs.500,000/- per month, then you may be able to afford a small team of multi-skilled resources comprising of a SEM specialist, a creative person and somebody good with excellent quantitative and analytical skills to manage the campaign for you. However, between these two extremes, it makes business sense to let an agency plan and execute the campaign.
How an agency delivers value
Having gotten an understanding of the pricing model and the costs you are likely to incur as agency fees, here are three more reasons why hiring a SEM agency will be a better option than in-sourcing search marketing.
Multiple skills: Despite the ease/ user friendliness of Google Adwords platform, it is important to remember that running an effective SEM campaign involves multiple skillsets. More often than not, it is difficult to get all of those requisite skills in one individual. For example, somebody might be very good at coming up with structuring the campaign and identifying the sites where they want the ads targeted, but that individual’s copywriting/ creative skills might not be up to scratch. An agency gets together these multiple skills under one roof such that the total cost you bear is less than the sum of the parts.
Updated knowledge: Features and functionality offered by programs like Google Adwords keep changing at an astonishing pace. From new targeting options to more creative options or better tracking and reporting, these advertising platforms evolve almost on a daily basis. Keeping track of these changes is resource-intensive and this is an area where the SEM agency plays an important role. It is our job to keep on top of these changes and have resources trained to make the most of all the features and functionality.
Insights from experience: By virtue of working with different clients in varied industries, a SEM agency accumulates a wealth of experience and priceless insights that can be re-used or applied to your project. Lessons from what worked can give your campaign a big boost while lessons from what did not will help save money.
So, to summarise, there may be a case for running SEM campaigns yourself, but there is a considerable amount of value that an agency can deliver. The service fees you pay the agency may well be worth the earnings and savings you make from leveraging the resources, skills, knowledge and experience that a SEM agency accumulates.
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