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It will probably cost you a bit more to hire a company to manage vs the in-house option, but they will probably have more experience (assuming you carefully select the company).
A few other reasons why I prefer in-house are:
1. You always know who is managing your account vs a PPC company your account could be shared or passed around to several account managers. I had bead experiences with multiple people working on a single account before. One person makes a change then someone else makes a change, soon you don't know who is making changes and why they were made in the first place. I think it is better to let a single person manage the account assuming the task is not too large for a single person to handle. An experienced PPC manager should not have any problems.
2. You probably know your business and customers better than anybody else, including buying habits, when they prefer to shop, etc. Why depend on someone who knows nothing about your target market handle your advertising?
3. Combined efforts between SEO and SEM (PPC) teams can have it's benefits too. Coordinate which keywords you rank well for in the organic space and then test which paid positions work well to enhance visability, but still keep costs down.
I'm sure there are other benefits to paying a company to do it for you, but I'm not aware
however, there are good ppc companies out there and using one depends on other factors also... such as:
- how profitable are the accounts being managed by your current staff?
- if your current staff requires a lot of training, are you willing to waste a bunch of money in PPC while they "learn on the job"?
- if you used an outside firm, would it free up time for the involved staff to work on more important projects?
If you hire a smart, numerate, intelligent agency to work with you as a partner, you could do quite well out of it. One way to ensure that the agency works for you is to incentivise them if possible to achieve better results i.e. structure a rev share deal, or something along those lines. If improved results for you mean more money for them, it could be a win/win situation. Whilst you may be handing over your conversion data to your third party, if you ensure it's in their interests to protect it & grow your business, the risk is probably quite minimal.
If you run it in house, you may protect your data etc, but if smart people aren't using it & learning from it, then it's not all that useful.
I think alot of people have been burnt by agencies in the past that have failed to live up to expectations. Before you engage with them make sure that you know what you will get for your fees - transparency, reporting, advice etc.
On the flip side, the relationship will only work when both client & agency works together - often things can fall apart when the client fails to take responsibility for their end of the deal also.
Anyway - that's my 2 cents!