Do you wish to provide first-rate PPC management without sacrificing your most lucrative products or services? Recognize the PPC Dilemma and how to resolve it.
Why Your Agency’s Growth Is Limited and How to Fix It: The PPC Dilemma
If you meet the following requirements and are looking for chances for sustainable growth, you have come to the correct spot.
Your organization hasn’t yet crossed the multi-million dollar threshold.
The actual PPC execution is entirely your agency’s responsibility.
PPC is not your company’s most profitable service.
These are the main causes of The “Advertising Pay Per Click” Dilemma, which creates unrealized potential for digital marketing firms.
The PPC Dilemma is explained below, along with a solution, so you’ll know how to scale your business successfully.
The PPC Conundrum Presented
PPC services must be of a high caliber if digital marketing firms are to draw in and keep the proper customers. However, resources are scarce, and PPC is frequently not the main source of revenue.
It must be provided by agencies, which inevitably takes money away from more worthwhile endeavors.
The PPC Dilemma is that.
The Economics of the Conundrum
There is no reason to panic or attempt to skip class.
This isn’t an economics lecture.
Having stated that, you can adopt this approach with confidence because of the connection between The PPC Dilemma and this reputable social science.
Fortunately, the connection is rather simple, so this will only take a minute.
The benefits of scale
Understanding of economies of scale is the basis for the “multi-million dollar mark” qualifier mentioned above.
Will Kenton’s essay in Investopedia claims that
“Economies of scale” refers to the cost savings and competitive advantages larger organizations have over smaller ones. It is a crucial idea for any business in any industry.
The PPC (pay per click) Dilemma is discussed below, however multimillion dollar organizations that benefit from economies of scale are probably not affected and won’t be eligible for the associated growth opportunity.
Keep reading if you are not an Inc. 5000 company.
Decreasing Profits
To comprehend Understanding the PPC Dilemma is essential to comprehending the law of diminishing returns, which states that when production costs rise, output falls.
Defined & Personalized Key Terms:
These are your deliverables, which help your agency make money.
Any resource you employ to provide your services is referred to as a FOP (factor of production).
Your FOP contains all of the assets necessary to carry out each of your agency’s services, such as SEO, web design, PPC, etc.
What Am I Saying?
I assured you it would not hurt.
The bottom line (so far) is that if PPC is your most profitable item, your factors of production should incorporate PPC fulfillment; otherwise, it will impede your growth. Depending on when you reach your full potential that could refer to either current or future growth.
You will develop whether you can reduce the production factors that affect PPC fulfillment while maintaining a profit from the agency’s output and deliverables.
After illustrating the “what” of The PPC Dilemma, I’ll go on to the actual how-to of fixing it.
The Primary PPC Fulfillment Choices
So how do agencies supply high-quality PPC while maintaining its related production variables’ lean levels?
The best PPC fulfillment alternatives are listed here, along with advantages and disadvantages.
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Choose the one that allows you to keep profiting from its deliveries in your output while eliminating PPC fulfillment as a FOP.
Current Internal Talent
This fulfillment strategy assigns PPC account management to current employees (current employees with added responsibilities).
Pros:
Accountability – Due to their high level of liability toward their employers, employees are highly motivated to perform well.
Control – The capacity to choose the bandwidth, timetable, etc. of your PPC manager.
Internal staff often responds quickly to communications.
Internal teams seamlessly integrate with the current tools and procedures.
Commitment – Provided a positive workplace culture exists, employers benefit from employee loyalty.
Cons:
Employee turnover is historically high, according to a recent research by the U.S. Bureau of Labor Statistics. This “eggs in one basket” strategy will experience a lot of turbulence due to employee turnover.
Demand – You are in charge of creating and maintaining the infrastructure required for efficient PPC fulfillment.
Limited Results: In addition to PPC management, current employees also have other duties. Additionally, they have less experience than talented individuals who just work in PPC. As a result, performance is affected.
Burnout – Employees are more likely to experience burnout the more hats they are required to wear.
Devoted Internal Talent
This choice refers to the employment of full-time professionals who are dedicated to managing paid media.
Pros:
Every advantage mentioned under “existing in-house talent,” plus:
Performance – Because a committed specialist will have greater experience and be able to devote all of their time to that one area, you’ll get better outcomes when you hire their services.
Bandwidth – This model’s bandwidth outperforms both the company’s existing inside personnel and outside contractors.
Cons:
Except for burnout, the drawbacks outlined in the first model are also:
Recruitment – Headhunting is difficult, especially in the cutthroat market of today. Onboarding a new employee requires a lot of work and is fraught with uncertainty.
Obligation – Regardless of the employee’s workload, salary-based employees (as opposed to project-based personnel) obligate you to a high monthly operational expense. Similarly, regardless of how long their projects last, you are responsible for that expenditure permanently.
Limitations – You will have to settle for someone who manages both paid search and paid social unless you have $12,000 to $13,000 per month to spend on various specialists. Compared to channel-specific professionals who are totally committed to one channel, this leads in a decline in skills.
A contractor’s hiring
Independent individuals that do not exclusively work for one person or company are a part of this fulfillment technique.
Pros:
Economical – This is a cost-effective strategy because 2. Contractors often have low overhead expenses and 3. You simply pay for certain projects (accounts).
Control – Although this model’s level of control cannot match that of in-house models, it will nevertheless offer greater freedom than working with an organization.
Flexibility – Contractors do not have ongoing responsibilities.
Talent – Rather than hiring a generalist to handle sponsored search and paid social, you can hire channel-specific specialists with this cost-effective solution.
Cons:
Risk – Because of the independence of contractors’ positions, there is an inherent vulnerability when hiring them.
Lack of dedication: This is the flip side of flexibility, as in the case of someone serving many agencies.
Communication – When one person oversees numerous clients (agencies), each with their own accounts, communication breakdowns are unavoidable.
Accountability – The least accountable are independent contractors.
Mediocrity – Due to the inherent limitations of a single human, innovation is rare under this approach.
Disruption – When this person is stage left, it is disruptive, just like in either of the in-house instances. Keep in mind that there is no implicit expectation of a two-week notice for contract work.
Brand-Neutral PPC
Using this fulfillment strategy, your agency will buy services from a white label business and market them under your own brand to clients.
Pros:
Cost-effective — hiring an outsourcing partner eliminates payroll and lowers expenditures for infrastructure, workspaces, and resources as well as recruiting.
Performance: A trustworthy white label PPC Company will offer top-notch performance. This is due to two factors: 1. they will have a lot of data, automation, etc. because they manage millions of ad spend at scale. 2. Instead of generalists in paid media, they will have channel-specific specialists.
Stability – This model is the only one that offers quick, different expertise when there is churn. They have additional experienced specialists who can come in to lessen the impact at trying times.
Low commitment – Unlike contractors, you only pay for active services, so you never have to worry about paid personnel who are idle after a project is finished.
Accountability – White-label PPC firms have their own brand and senior management, so experts are held to high standards.
State-of-the-art – A white-label provider will have leadership committed to continuously enhancing their service in addition to the specialists maintaining your accounts.
Turnkey – I am aware of one vendor who enables agencies to effectively manage PPC campaigns under their own brands at scale throughout the whole client journey using a single dynamic interface. If you manage many accounts, having a powerful client portal that can perform more than just basic tasks like submitting a support ticket is important.
Cons:
Additional tools – Expecting a company specializing in white label PPC to integrate with your systems is unrealistic. You will need to become used to new tools.
White label vendors already have their service level agreements in place, minimizing oversight. As a result, you are unable to direct or change their procedures.
Communication – It is impossible to match an internal staff member’s responsiveness.
Note: Depending on the vendor you choose, the drawbacks could possibly last longer. The white label provider, in my estimation, possesses the following qualities: 1. full-time W2 employees who live in your nation; 2. does not claim ownership of your assets (ad accounts, landing pages, etc.); and 3. Channel-specific experts, such as paid search specialists and paid social specialists.
Four Success Tips
The most typical PPC fulfillment alternatives that are offered to agencies are these.
Whichever one offers your firm the greatest potential for scalability is the one you should choose.
I’ve offered four suggestions to assist you in choosing the best model to address The PPC Dilemma.
1. Weigh your FOPs correctly
The decision that is most profitable for your agency’s services will be the most sensible one.
In other words, your FOPs should ultimately be dominated by activity associated with your wheelhouse/flagship product.
Which strategy will reduce PPC fulfillment’s production costs while still enabling us to earn from its output/deliverables? Is a question you might want to consider asking?
2. Take Initiative
When opportunities like this present themselves, it is simple to succumb to the tyranny of the urgent.
Consider your potential 6–12 months from now instead of just what would help you right now.
3. Don’t discount PPC
Few areas of an agency are reviewed as thoroughly as PPC.Take into account the size of the Google advertising pay per click and Facebook user bases, the high level of PPC intent, and the unparalleled control over marketing budgets offered to marketers.
You shouldn’t take this aspect of digital marketing lightly.
4. Keep Opportunity Cost in mind
Remember to respect and consider opportunity costs when making strategic decisions rather than focusing only on direct costs.
We lose opportunities to focus on the factors that are most important to our success when we place too much emphasis on secondary goals.
This is comparable to declining returns working in reverse.
Decide With Confidence
Jim Collins wrote in his book “From Good to Great” that in order to make wise judgments, one must face the truth.
Fewer strategies are as effective in achieving this as basing judgments on accepted scientific principles.
You can unwind and place a call that is answered by economists.
If properly carried out, you will be able to reflect on this decision 12 months from now with a strong sense of satisfaction.
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