Ben Childs
By Ben Childs | Uncategorized | April 22, 2014

Is PPC Management a Perfect Market?

As an agency, one of our biggest issues is that many prospective clients don’t see any differences between the various PPC Management firms that compete for their business. Some of this is just a facet of the industry, as we often fill a need (“someone to handle paid search”) that can be “checked off”, just like picking up the milk on a grocery list. However, even large advertisers with intelligent views about their own performance become completely price-sensitive when it comes down to decision time, like they’re comparing two stores that sell the same book.  It’s an argument that I’ve been dealing with for years, and an experience I had last month finally put it into the spotlight for me. I was speaking with someone who handles agency partnerships at a firm that specializes in inbound marketing software, and he laid the same argument on me: isn’t all PPC Management just the same? Doesn’t everybody do that? Granted, it was a sales pitch, but that statement blew me away for two reasons: first, here I was, talking to a colleague in the internet marketing industry, and they were repeating a myth I’d heard over and over again as if it were gospel. Second, wait, is he right? I understand that content marketing is the new black, and PPC is for nerds without twitter followers, but are PPC firms (and their services) actually indistinguishable from one another? Are we in a commoditized market where we’re just competing on ancillary services (how pretty our reporting is)? Here’s how Wikipedia defines commoditization:

the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers. It is the movement of a market from differentiated to undifferentiated price competition and from monopolistic to perfect competition.

So I was up at night thinking about it (congrats, sales guy), and I came up with 3 reasons why PPC management isn’t a market with perfect competition:  1. Managing PPC accounts is a multi-disciplinary affair. Let’s table product knowledge for a minute and focus on attributes. Counting the total number of skills needed to run a well-rounded PPC campaign is probably impossible, but here’s four off the top of my head:

  • Psychology: Ad writing, keyword research, competitor research
  • Design: Display ad creation, landing page design
  • Coding: Query parameters, code tweaks, goal set-ups
  • Analytical: Interpreting numbers, bidding, statistical tests

The first two in my (arbitrary) list are largely creative in their execution, and the last two are completely left-brain. Certainly nobody has mastered even this short-list of skills involved. If they have, they’re certainly getting paid the big bucks. We all strive to be the “optimized optimizer,” but account strengths and weaknesses will often reflect skills with which the manager excels. Consider an account I saw being run by an IT manager: beautiful query parameters in place, multiple dynamic goal values, and 1000 keywords stuffed into an ad group labeled “General.” Or its counterpart, run by a creative: compelling Calls-To-Action, edgy display ads, and no idea what happened after a visitor hit the page. Are those examples cliche? Of course. Like most cliches, they’re based in truth: most AdWords accounts are an extension of their manager. That means strengths and weaknesses. 2. PPC has a vast knowledge base, and it’s only getting vast-er I learn something new every day in PPC and I run a company where it’s our primary focus. Gone are the days when you could shove long-tail keywords into a campaign for a nickel. Google’s constant tweaking, along with rising competition, make the term “optimized” a more complex state of affairs now than ever before. If history is any indicator, this trend will continue. Also, just because Google publicly announces it’s updates doesn’t mean the entire public catches up. Sometimes, the exact year in which an advertiser stops learning PPC can be revealed in a single account audit. There’s a lot to learn out there, and some people keep themselves better-educated than others. Those that don’t stay on top of it, and fail to integrate Google’s newest offerings, will find themselves bringing a knife to a gun fight. 3. Some people are better at PPC management than others Perhaps this is a deus ex machina, but it turns out you can actually be bad at this stuff! Think of it like poker: all the knowledge is there. Everybody knows what skills are important. How come people still sit down and play each other? Because, in the end, the best person is going to take the chips. The average poker player is actually pretty bad, and AdWords is unfortunately no different. I’ve seen accounts across a broad spectrum of quality, and almost all of them are a direct reflection of the rarest commodity of all: the talent of the person working on it. Most people, despite their best efforts, just aren’t very good at PPC. That goes for firms too. There’s a diversity within firms as well. Businesses might get lucky and score an agency’s top technician, or they might get unlucky and get the guy who’s still learning on the job. They know (probably from experience) that some techs are simply better than others. Get the wizard who dreams up the perfect structure and strategy and you’re printing money. Get the new guy who’s just clicking buttons, and throwing away money on the wrong firm will be the least of your problems. To anyone who spends their life in an AdWords account, the idea of their capabilities being “just like everybody else’s” is crazy talk, but I suppose I’d never really thought critically about it. There’s a reason why PPC managers are constantly working to improve their tangentially-related skills. Plus, there’s all the knowledge in the world available out there if they want to seek it out (at least, that’s how I learned). Unfortunately, few do. Fewer still apply what they find. Most importantly, good talent is hard to find.

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