The Great (And Completely Ridiculous) 'In-house vs. Outsourced SEM' Debate

There's an old legal maxim that anyone who chooses to represent himself in court "has a fool for a client," and this saying exactly describes the plight of companies who choose to represent themselves in search using in-house teams.

I frankly don't know why this silly debate goes on and on. I've been doing SEM for more than 10 years, and I've never, not once, seen a search campaign created by an in-house team outperform one crafted by a competent SEM agency. But because this issue, like some grotesque zombie from the Land of the Undead, refuses to go away quietly, and because last week SEMPO (the Search Engine Marketing Professional Organization) hosted a public debate on the issue, I'll use this column to put an end to this fruitless discussion.

Didn't Corporate America Settle This Debate A Long Time Ago?
Every major corporation in America figured out a long time ago that it often makes sense to call in outside expertise, especially when said corporation must face down a major challenge whose outcome will have a material effect on the future of its business. Do you think that CSX, Exxon Mobile, or Microsoft relies exclusively on its in-house legal team when facing down a major lawsuit or anti-trust challenge?  Of course not, and any CEO arguing that its in-house accounting, legal, or PR team is "good enough" to execute on such mission-critical tasks deserves to be drawn and quartered. And yet the "we're good enough" ideology persists when it comes to search, and one must wonder what keeps it going. Here are a few factors that come to mind:

Possibility 1: Maybe SEM agencies really don't have a clue. The most likely reason that so many companies continue to eschew outsourcing in favor of in-house teams is that their experiences with SEM agencies have been so lousy. Companies don't like to admit that they've been burned by a SEM agency because it makes them look foolish, but anecdotal evidence of SEM agency incompetence is strong. For example, many of the search campaigns that my firm has taken over from other agencies have shown serious flaws, including inappropriate keyword lists, poor ad group and/or campaign structure, bad ad creative, missing engines, and terrible landing pages. If these accounts are typical of the work done by SEM agencies today, it's no wonder why CEOs believe that their in-house teams - even if it's just a receptionist buying keywords while she isn't answering phones -- can't do much worse.

Possibility 2: Maybe search budgets are too small to care about. Because PPC media spend typically constitutes a small share of most companies' marketing budgets, it's often viewed an experimental marketing medium by senior managers. If search only represents 1% of overall spend, who cares if this 1% is totally screwed up? Why sweat "the small stuff"? Viewing search this way makes no sense at all, but this attitude clearly explains the not so benign neglect that search receives compared to other media channels comprising a larger share of overall marketing spend.

Possibility 3: Maybe everybody in the business has drunk too much Google Kool-Aid. One of the most oft-repeated elements in the search engines' business pitch is that using their self-serve ad consoles is easier than falling off a log. "Just give us your credit card," they say, "and we'll handle the rest." I continue to be amazed by the number of CEOs and CMOs who have told me - with a straight face -- that "Google is doing a great job running my campaign." Obviously, it never occurred to these people that Google's objectives are only partly aligned with their own, and that they're both overpaying for clicks and leaving major opportunities on the table. There's very little that can be done to persuade these people: they've drunk the Kool-Aid and nothing, least of all reality, is capable of rousing them from their delusional stupor.

Possibility 4: Maybe it's impossible to evaluate search performance. Perhaps companies choose in-house mediocrity over outsourced excellence because, unlike other more established professions such as law, accounting, or advertising, where it's almost immediately clear whether the practitioner is brilliant or clueless, SEM practitioners aren't certified in any meaningful way. Today, senior managers not only lack the objective criteria required to distinguish competent from incompetent search managers; most don't even know the right questions to ask job candidates. Nor do many conduct A/B tests wherein the in-house team's performance is compared to that provided by an external SEM agency. Who was it that  said "ignorance is bliss"?

I think I've explained why this ridiculous debate goes on. The real question is why people -- and I'm talking about CEOs, CMOs, and otherwise bright people who should know better -- still buy into its wrong-headed premise, which is that deep experience, specialized knowledge, and state-of-the-art technology don't matter at all when it comes to search. As I've said before, the only thing that an in-house search team should ever be doing is SEO, because it's a relatively trivial task that is hardly "rocket science." Anything beyond this requires a specialist firm to take your search objectives forward



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