The BlackHatters were chatting the other day and we thought it was time to get a bit of perspective on the comedy that is selling PPC services. Why? We’ll the majority of people are looking for getting better performance from the PPC campaigns to get the best return for their advertising spend (unless you are doing a branding campaign.) But still PPC services are sold on a % of advertising spend, which is a total contrast in the actual objective you are trying to achieve.
What do we mean? You tell people you are PPC professional and we can do kind of whizz bang amazing stuff to improve the performance of your PPC campaigns, meaning that you will have to spend less money on PPC to earn the same/more than you were before….BUT….if you are saving more on your PPC spend, then you (the PPC professional) are going to earn less as a result based on a % of advertising spend fee.
This is a total contradiction in how PPC services should be sold!!!
Why would a PPC professional really work hard on improving an advertisers PPC campaign if they are going to earn less money as a result???!??!
Sure, they are different pricing models that PPC work on…A fixed fee, % of PPC revenue, or bonus system. But all of these models are flawed as well.
Now we have blogged about this before, and its not exactly ground breaking stuff to people in the industry, but we thought we’d blog about it again, just because when we get some perspective on it all, it is absolutely ridiculous!
Fixed fee – as a PPC professional all you are trying to do is do the least amount of work possible in order to keep your client happy so you don’t lose their business.
% of PPC revenue – this doesn’t work because PPC doesn’t work in a silo. It is affected by all kinds of numerous other factors – investment in above the line media, investment in other digital marketing channels, seasonality, promotions, competitor activity…the list goes on and on! So as a result, as a PPC professional, you have no control over these factors so have no incentive to do any work on a clients PPC campaign, because you have no real influence on how it performs overall.
Now – you can do benchmarking but we have tried this and whilst in theory it works, nothing stays the same and benchmarking year on year needs to be thrown out of the window, because PPC and digital marketing is advancing as such a rapid rate that year on year comparisons just cant be made.
Bonus System – this a a weird hybrid between either a fixed fee or % of advertiser spend and % of PPC revenue, and as such it is flawed by both of what we have just highlighted. In practice, advertisers will give you a tiered system on which the bonus system will work and if as a PPC professional you can think you can hit the next bonus tier, then you will put in the extra effort and try to maximize the potential of the PPC campaigns because you may hit the next bonus tier…however, if you know you have hit the bonus tier and no matter what happens you cant hit the next level, again there is no incentive for a PPC professional to optimise campaigns.
So what?
We see this as leading to a decline in the quality of PPC professionals. Because really…its a bit of a joke. You don’t have to be any good at what you do, because you have no incentive to do anything to become any better and learn how to really deliver the best performance of PPC campaigns. All you have to do is ‘shmooz’ your clients to ensure you have a continued revenue stream. We see this as leading to a real decline in the quality of PPC professionals in the future.
But fear not!
The Blackhatters have the answer (similar to smarties!)
If you are an advertiser, just give all your advertising spend to the PPC professional and tell them they will get a % of the profits. This way they will actually ensure they work hard to ensure they are actually driving the best return for you spend.
But…what about the % of PPC revenue model and all the factors beyond your control.
Answer: Do the same deal with all the other advertising channel agencies. Give then all the money and you’ll see the all the above the line and digital guys will work in unison, because their profits are tied to one another, they’ll work in unison to really maximize their return.
The Drawbacks…this ‘ideal’ happens very selodomly because the digital guys dont know the above the line guys and they dont work in harmony (honestly, the difference between the data guys and the branding guys is like men are from mars and women are from venus!)
But hold on…what about the full service agencies that provide both?
Yes, in theory this should work. However, in practice this doesn’t really happen because they are separate departments with their own individual targets and as such don’t work in unison together. Even if the guys at the top do decide that they work together, they’ll still have different fee structures for the different disciplines and will end up spend an advertiser money in the channel that maximises the profit for the full service agency.
Its a real catch 22 when it comes to selling PPC services, but our advice is to get lots of specialists and then tie them all together under one profit sharing agreement and whilst their may be some teething troubles, its probably the best way of maximising your advertising spend as the different professionals will urge each other on to maximize the profits for everybody.
Brought to you by Black Hat PPC.
