The truth about PPC management costs: In-house vs. Outsourcing
Key insights:
- When comparing the costs between in-house and outsourced PPC management, in-house expenses extend beyond ad spend to include recruitment, training, and technology.
- Outsourcing offers expertise and specialization, allowing access to dedicated PPC teams with up-to-date industry knowledge, while saving on hiring and tech costs.
- Agencies come equipped with advanced tools, aiding campaign management and analysis, eliminating the need to purchase them separately.
- Scalability and time efficiency are advantages of outsourcing, as agencies can quickly adapt to increased demands without the challenges of rapid in-house expansion.
What goes into total PPC management cost and when is it smart to bring in a third party instead of running things yourself? Pay-per-click (PPC) ads can be a useful tool when strategizing how to help promote brands online and outshine the competition. But things like leveraging PPC trends and buying essential tools can make running these campaigns in-house more costly than expected.
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Before you kick off recruitment efforts or outsource your clients’ fates, it’s time to learn the truth about in-house PPC management costs vs. outsourcing benefits and fees.
Table of Contents
The main cost differences between in-house PPC management and outsourcing
When you’re trying to decide between keeping your PPC management in house or partnering with an agency, it’s important to understand what you stand to gain through outsourcing — and what you could theoretically lose.
Note that in general, some PPC agencies may charge a flat of anywhere from $350 to $5,000 each month. Others charge according to a sliding scale of around 12-30% of your monthly ad spend.
1. Labor costs
Keeping everything in house could cost you anywhere from $15,000-$20,000 to hundreds of thousands of dollars each year. That’s because you’re not just paying for the ads themselves. You’re also paying for everything surrounding your campaigns. True PPC management costs include:
- Recruiting and training talent
- Acquiring the technology necessary to succeed
- Paying for the labor needed to launch and run campaigns
- All the overhead required to run a larger team — think increased utilities, adding new hires to your incentive programs and benefits plans, etc.
When you outsource to an agency, the costs might look bigger on paper, but you’re paying for expertise and convenience. You don’t have to recruit, train, or account for PTO. Just the service you need, as you need it.
2. Expertise and experience
Outsourced PPC campaign management pricing includes niche skills like executing cost-effective marketing techniques and growing brands through local SEO. Outsourcing means you get to tap into that expertise — and the perks of continuing education — without making time to study or get certified yourself. Someone who dedicates their entire day to PPC is always going to be more up to date and having them on your side gives you an edge.
3. Tools and technology
Running successful PPC campaigns require a significant investment in relevant tools and tech, including:
- Analytics trackers
- Bid management software
- Ad-reporting software
- Keyword and competitor research utilities
- Ad editors
Buy all those tools a la carte to support your in-house team and you can easily be nickel and dimed until your budget busts. But agencies typically have these tools already, plus some you might not even know to look for. The price is just wrapped up into your overall PPC management fees.
4. Scalability
A booming business is a great thing to have. But trying to scale your in-house PPC team ASAP can be costly. The faster you need to scale, the more money you’ll pay out to accelerate recruitment and attract top talent that can start immediately.
Agencies scale quickly simply by tapping into the talent they already have. When you’re ready to increase your ad spend or triple the number of campaigns you’re running, you’ll pay PPC management costs related to those increases without worrying about onboarding anyone yourself.
5. Time and efficiency
Small- and medium-sized businesses don’t always have the luxury of hiring staff members who can dedicate 100% of their time to PPC ads. Often, you’ll find one person filling multiple roles — a marketing expert who takes care of content marketing, PPC, and social media channels, perhaps. Those people tend to find themselves spread too thin.
Agencies focused on selling paid advertising have the time to figure out the best way to approach clients’ PPC needs. They’ve run through the same research, strategy, and launch processes so many times that they’re usually remarkably efficient. This saves time, getting your PPC campaign up and running quickly, and can save money as a result.
6. Reporting and analysis
Generating reports and analyzing the data collected can be time-consuming. It also requires those costly tools and software applications referenced above. Many agencies dedicated to PPC management are so good at the analysis phase — and have the tools handy to automate reporting — that it takes them a fraction of that time it would take you to cross this task off the to-do list.
Also keep in mind that proper analysis is a learned skill. While tools do a lot of the legwork, you still need someone who can interpret and apply what the tool spits out. If you don’t have anyone in house with that ability, you’ll need to pay for freelance help, like a consultant or strategist.
7. Accountability and results
No PPC strategy is 100% foolproof. Sometimes reality falls short of expectations. If you’re taking care of your PPC needs in house, the buck stops with you — you’re the one who must deal with the consequences if you exhaust your budget without any real results. Even if you’re reselling PPC services, it’s up to you to explain why you promised something you couldn’t deliver.
An agency, though, may see accountability a bit differently. If you signed a contract that includes productivity-based fees, the money you’re invoiced may be dependent on getting the results you were promised. In other words, if clicks and conversions don’t manifest, neither will your full invoice. Even if you owe fees based on ad pay, you may have recourse or an option to extend the contract for cheaper if the original attempts haven’t produced the expected ROI.
Pros and cons of using an in-house PPC management team
Before you decide to forge ahead with in-house PPC management, review these lengthy lists of pros and cons.
Pros:
- Control and direct oversight. When your entire PPC team exists within the confines of your office, you automatically have more control and oversight over your campaigns. You can analyze data, make decisions, and pivot quickly. Additionally, you know for sure that all your decisions will align directly with your business’s values and goals.
- Dedicated team. Your team is all but guaranteed to be focused solely on your business’s PPC needs. They’re not distracted by calls from other clients or meetings about another organization’s well-being. That singular focus can help ensure strategies are aligned with your overall marketing efforts, fostering a deep understanding of your company’s unique requirements.
- Collaboration and integration. Your PPC team may be dedicated to a narrow to-do list, but they’ll probably need input from other experts in order to accomplish their digital marketing strategy efficiently and effectively. Relying on an in-house team means your pros can easily collaborate with other departments, looping in marketing, sales, product development, and customer service as needed.
- Quick response time. When time is of the essence, it can be helpful to know your in-house team is a 2-minute walk away. In marketing, agility is paramount, and in-house teams may be better primed to react quickly to things like market changes, emerging opportunities, and major moves made by competitors.
- Brand and company knowledge. Your team is part of your company, so they’ve been positioned since day one to have an intimate understanding of your brand, your shared values, and your target audience. This may make it easier for the team to tailor their strategy and craft PPC campaigns that truly resonate.
Cons:
- Higher costs. Running your campaigns in house could result in higher PPC management fees. That’s because it’s up to you to cover everything from salary and benefits to training and continuing education. You’re responsible for acquiring the right tech, too, even if that means multiple software subscriptions.
- Limited expertise. Does your team include experts in Google Ads management? How about content writers? Are they well-versed in emerging trends and specialized areas such as international campaigns and niche markets? Chances are that your core team will have limited skill sets and you’ll have to bring on costly freelance talent to make up for those gaps.
- Resource constraints. In-house teams tend to have limited bandwidth. There’s a cap on the time, tools, and technology you have on hand — especially if you’re a smaller agency or small- or medium-sized business with a strict budget.
- Risk of burnout or turnover. Asking your in-house PPC team to maximize productivity is one thing. But pushing them to hit rush goals and tweak PPC campaigns on a rolling basis could easily lead to burnout. And since burnout is a major factor in employee turnover, you could wind up having to recruit and train new staff members all over again.
- Reduced scalability. So, you’ve hit your stride — way to go! Now it’s time to scale up your PPC operations, but that requires additional recruitment, training, and infrastructure investments. Meeting the demands of a growing empire can be challenging and costly, especially if the growth is rapid and unexpected.
Pros and cons of outsourcing PPC management
Whether you’re looking to partner with an agency for your own PPC needs or offer white-label PPC services to your expansive client list, you need to consider these pros and cons before pressing forward.
Pros:
- Expertise and specialization. Any solid PPC agency will have a team of specialists on hand, with skill sets embracing all the most important aspects of contemporary PPC management. It’s literally their job to stay up to date on industry trends and best practices, too, so they’ll likely have information and ideas you simply don’t have time for.
- Cost savings. At first glance, outsourced PPC management services pricing may seem high. But those can be quite cost-effective, as they include the hiring, training, maintenance, and overhead you’d otherwise have to pay for in their entirety.
- Scalability and flexibility. Repackaging outsourced PPC services gives you major opportunities for easy scalability. Agencies are built to accommodate varying client needs, usually without the need for additional recruitment or resources. When you’re ready to grow, so is your agency.
- Access to advanced tools and technology. PPC agency pricing also includes access to an array of advanced tools and tech, all designed to help with enhanced campaign management, data analysis, and reporting capabilities. You save on individual memberships and/or downloads but still reap all benefits of these valuable platforms.
- Accountability and performance. Running your campaigns in-house puts you in the hot seat, but agencies are often contractually obligated to deliver measurable results. Customer satisfaction matters, and they’ll go the extra mile to achieve it.
Cons:
- Loss of direct control. When you outsource your PPC management, you’re relinquishing direct control over campaign strategy and execution. You must trust that the agency you’re partnered with will be transparent, take your goals into account, and make the right decisions on your behalf.
- Communication challenges. All agency partnerships should be built on a foundation of clear expectations paired with regular updates and plenty of purposeful collaboration. But it can be difficult to communicate effectively when teams are in different locations and working at different paces.
- Potential lack of company knowledge. Outsourcing means putting your company in the hands of people who may not understand the nuances of your brand. There is usually an info-gathering stage that helps make up for this deficit, but that requires additional effort on your part to explain your values and target audience.
- Dependency on third-party help. Once you’re dependent on a third-party agency for your PPC management needs, you’re also subject to their limitations. You could end up hamstrung by the agency’s availability, responsiveness, performance, and other client commitments.
- Potential data security concerns. Any time you transmit or share data outside your company boundaries, there’s a risk that sensitive information could fall into the wrong hands. Outsourcing PPC management requires proper contracts and safeguards for maximum protection.
Things to consider when weighing PPC management costs for executing your strategies
How much does PPC management cost? The truth is that the final numbers depend on a variety of factors. Here are a few of the most important things to consider when you’re putting together a budget and preparing to execute your PPC strategy.
1. Expertise and resources
PPC management fees should cover not only concrete expenses but also the value of experts involved. Assess potential partner’s internal expertise and resources and gauge whether the in-house team has the necessary skills, knowledge, and experience to produce the desired results. You may well discover that outsourcing serves up significant advantages simply not available if you stay in house.
2. PPC campaign management pricing and budget
Compare the real costs of maintaining an in-house team vs. the fees you’d pay if outsourcing your PPC management. Factors such as salaries, benefits, training, technology, and tools all come into play, but also think about the terms of a contract, like how long it lasts and what kind of ROI you can expect.
3. Scalability and flexibility
PPC agency pricing shifts based on your needs, and that’s a good thing, because it indicates you can scale up or down as your business evolves. If your company forecast includes agency growth plans, you may find that an in-house team isn’t as adaptable as an outside partner might be.
4. Time and focus
Weigh the ability of your in-house team to take on PPC management full time versus the service and dedication you’d get from an agency that focuses solely on pay-per-click marketing. You don’t want to distract your team from other duties and accidentally sabotage productivity.
5. Control and communication
How much control do you want over your PPC campaigns and how do you prefer communication to run? This can help you determine whether you require direct oversight to be comfortable or if you can effectively communicate and collaborate with a third party.
6. Risk and accountability
Look at each agency’s ability to deliver measurable results and meet, if not exceed, client expectations. Can an in-house team do the same?
7. Data security and confidentiality
Lastly, consider data security concerns, especially whether agencies have the proper safeguards in place to protect sensitive information — yours and the end clients’. Would an in-house team be better positioned to maintain high levels of security?
Frequently asked questions
What is the average cost of in-house PPC management?
In-house PPC management pricing can vary wildly depending on factors such as which keywords you’re bidding on, how many tools you need to buy, and how many campaigns you’re running. But generally speaking, you should expect to invest at least 10% of your total revenue in advertising in order to maintain your industry foothold. If you’re looking to scale, you may need to invest 15% or more of your total revenue.
How do I compare the costs of different PPC management service providers?
In order to properly compare different companies’ PPC management fees, you have to look at the PPC management packages they’re offering. First, ask whether potential partners are charging a flat fee rate, an hourly rate, or a rate based on a percentage of ad spend. Some agencies may pay based on performance (your ROI) or use a hybrid model. Also look at what services (copywriting, keyword research, etc.) are included in each package and which you’d have to pay extra for.