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4 Secrets About Paid Search Agencies

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secretTo get the most out of hiring a paid search agency, you need to understand agencies. They’re like any other business: they need to make money, sometimes they’re the right solution, not everyone is great and they won’t magically solve all of your business problems.

There is no way to find the perfect agency, but there are some secrets you should know.

Every Fee Equates to Hours

When you pay a paid search agency you are buying time. The vast majority of agencies charges a percentage of your media spend, a flat fee, or some hybrid. The agency’s costs are mostly talent. The amount you pay equates to some number of hours they can work on your account.

Every agency has to make money, but few talk about the number of hours they’ll be able to dedicate to your account. Some months, particularly early on in the account, you’ll get more than you pay for and some months it may be lighter. Account Managers are always under pressure to get the best possible results for as many clients as possible as efficiently as possible.

What matters most are results, not hours spent working on the account. The trick is to realize that working successfully with an agency is all about prioritization.

Everything you ask for draws from that total bucket of hours. Want a report? Need a deck for a meeting? Want weekly meetings instead of monthly ones? These requests have to come from a bucket of hours that you’re paying for. There is an opportunity cost of every project.

An Agency Isn’t Always the Answer

One of the common questions I get at search conference is "Can you recommend a good search agency?" The first thing I always want to know is: How much do you spend every month?

Most agencies will have a minimum that starts in the $1,000 to $5,000 per month range. If you’re not spending a reasonable sum on paid search per month, it can be hard to amortize that cost accordingly. Here’s what I recommend by budget level:

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At lower spend levels, you can often get the advice you need with occasional help from a freelancer in terms of an account review. If you really don’t know anything about paid search or don’t have the time to manage it, a freelancer can be half the cost of an agency.

An agency provides expertise, a breadth of talent to support your account, and a layer of strategy and account management. That level of service and experience usually means a higher per hour cost and monthly minimum. If you’re spending at least $10,000 a month, that makes more sense than if you’re spending $2,000 a month.

Agencies Can’t Fix a Broken Business or Website

The best way to kill a bad product is great advertising. That famous Ogilvy axiom is just as true with paid search as print. No campaign, no matter how well structured, bid or described in a text can make people want something they really don’t want.

Chances are that if you’re struggling to sell your product in other channels, then paid search isn’t going to be a magic bullet.

That is true of conversion rate as well. It’s rare for an agency to have control over your website or, in some cases, even a way to change your landing pages. Yet, conversion rate plays a dramatic role in determining the profitability of your paid search spend.

A good agency-client relationship needs to include a candid assessment of what you’re trying to sell and how you’re trying to sell it. Improving conversion rate is often a joint project between paid search agencies and their clients. You’ll get further if you have that conversation early and work it into the project plan.

Not Everyone is an Expert

There are many brilliant people in paid search agencies. There are also many average and less experienced people, just like every other company.

Less experienced personnel cost less, which leads to more profit for the agency. Newer paid search managers can be great for more tactical work, but it’s important that your team includes the right blend of tactical and strategic guidance.

If you’re going to pay a premium to outsource your paid search management, make sure you clearly understand the account team. You don’t always need a team of experts or have the budget for them, but a balance of perspectives will lead to the best results.

It’s All About Trust

An agency-client relationship is a two way street and results: growth for your business and a profitable, long-term client for the agency. The more realistic and candid you are about what each of you needs and can accomplish within the time, budget, product and personnel constraints, the more productive it will be.

What are your agency secrets and tips?


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