The buy vs. build argument for SEM

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There was a time when search execution had to be in house; there simply were no firms specialized in the service. Over the past ten years, search engine marketing agencies carved a niche to fulfill on this need, just in time for the explosion in pay-per-click advertising. Of course, there were a few firms that scoffed at yet another agency's fees and went it alone. At the time, there was limited education on search engine marketing, and most efforts were less than brilliant. Ultimately, experts would be brought in and the search agency of record relationship was born.

Until today, that is. Over the past six months, an increasing number of firms are asking themselves "Should we buy or build search engine marketing?" In this scenario, buying search refers to partnering with an agency. Likewise, building the competency refers hiring or educating in house staff. There is, of course, a hybrid model where a search-savvy in house employee is responsible for partnering with an agency.

For those that scoff at the idea of building an in house competency, let's get the biggest misconceptions out of the way:

1. In house search will never be as good as outsourcing. The truth is that with the proper investment, just about any competency can be built in house.

2. It is impossible to replicate the years of experience within an agency. Given the extremely high turnover of SEM staff, the years of experience tend to be within managerial staff, and not the day-to-day account managers. It is also entirely possible for a marketer to simply hire away SEM talent.

3. There is no way a marketer can stay on top of all of the changes to the search landscape. With no less than three major SEM training programs, over 20 search-related conferences and hundreds of search blogs, this is perhaps this claim is simply is hard to support. Once again, if a firm is willing to invest in education, it is entirely possible to support search in house.

4. Agencies have access to the best technology. While this was once true, bid management and tracking technologies have come a long way. For firms with a small budget, there are plenty of free or inexpensive options that will do the trick. For larger firms, enterprise level applications have become extremely sophisticated. In the middle sit firms such as Clickable, whose goal is to reduce complexity in online advertising.

To be fair, agencies do offer value, and I do believe that there will always be firms that prefer to outsource. Yet over the past few years, examples of successful in house search marketing have surfaced. In many cases, the hybrid model appears to be the most successful, such as Marshall Simmond's ongoing exercise with the New York Times. Names such as IBM and Target also come to mind when I think of firms who choose invest in building at least one component of search. If further proof is needed, in house search marketers are rapidly join the ranks of SEMPO, to the extent that the organization has recently launched a salary survey for this set (disclosure: I sit on the board of SEMPO).

So which model is right for your firm? After running through the dry task of calculating fixed and variable costs over time, three questions must be asked:

1. Culturally, does the firm value building long-term knowledge?

2. Is the organization is capable of a successful build?

3. If yes to both of the above, what is the financial and temporal investment that management is willing to commit?

For the SEMs who have read this far, fear not. Continue to deliver value (in your customers' eyes, not yours) and there will always be a place for your services. In the meantime, make the most of your new client-side expert.

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