Should you manage your own AdWords account?

Over the years I've been asked this question so many times I feel it deserves a blog post.

I know Google allows anyone with a credit card to set up an AdWords campaign, and of course they have a strong incentive to make it look easy as possible.

But would you ask your doctor why you can't diagnose your own illness? Or your roofing company why you can't install your own roof? Or your dentist why you can't perform oral surgery on yourself?

I can go buy my own scalpel, I'm sitting in a chair as I write this, and I can numb myself with the bottle of Chivas in my cupboard - that doesn't make it a good idea to give myself a root canal.

Likewise, for the sake of your wallet you probably shouldn't be running your own AdWords campaign.

A few exceptions

Before I get into why you shouldn't be running your own AdWords campaign, let me explain the few exceptions to this rule.

1. You have in-house expert(s)

Expert being the operative term here. If your sister's cousin once setup an AdWords account at his last job, he is not an expert.

Anything less than a full-time, dedicated staff-member is not an expert and will cost you a % of spend wasted.

Of course, if your budget is small enough that % of spend wasted may not be terribly huge. In other words the value of an experienced account manager may not outweigh the wasted spend at really low budgets. Which leads me to the second exception.

2. You have a really, really small budget

And I mean really small, like less than $300-400 per month. When the budget is that small, hiring a competent account manager is going to cost more than you're spending on clicks.

That's not to say it won't be valuable, it's just much riskier. Whatever firm you hire won't be able to do much testing or have much time to get to know your business like they need to.

Exceptions aside, why you shouldn't manage your own AdWords account

Since AdWords account management is a service we provide I fully realize there's the potential for this post to become a sales pitch with little useful, objective information.

That's not what this blog is about and in order to prevent that I'm going to stay away from rhetoric and use hard numbers from past projects to illustrate my point.

A low budget example

Prior to Jan of 2013, we were contracted to do a one-time optimization of a client's AdWords account. The client was managing in-house (without a dedicated expert) and didn't have much of a budget to work with.

We set up lead tracking on the site so we could identify which leads came from AdWords.

A short time later the client shut down AdWords. The reason? It wasn't generating enough business.

Roughly 8 months later we were brought in to re-evaluate AdWords as an option.

After reviewing the account we discovered, the same month it was shut down, AdWords drove 11 leads at an average cost per lead of $28.71. This is for a product that costs $100,000+ with a profit per sale of roughly $20,000!

The client shut it down because they didn't understand how to interpret the tracking data and just assumed it wasn't generating anything. In fact, it was generating leads at just a fraction of target CPA.

Once this was discovered the client asked if we could just unpause the campaign and let it run unmanaged. We objected pretty strongly to that and the client agreed to let us manage it.

Turns out that was a good idea. After enabling the old campaign, it was clear that in less than a year the competitive landscape had changed dramatically.

The same campaign that was once generating leads at $28.71 a pop was now costing $500 per lead!

So on a $500 budget they could expect about 1 lead per month. Not much.

After reviewing the data and the new competitive landscape, we decided to revamp the campaign entirely.

The result was a 66% reduction in cost per lead from $488 to $167 in a single month. Still no $28 but definitely within CPA targets and much cheaper than it started out.

We also set up call tracking and discovered AdWords was driving roughly twice as many phone calls as form submissions. So we could now tie about 10 total leads back to AdWords on a $500 spend ($50 / lead).

Suddenly, AdWords looked really appealing for this client, even on such a small budget.

So how much did not paying us to manage the campaign cost? Let's assume the following:

• 90 total leads not collected between Feb 2013 and Nov 2013 (because the campaign was paused)
• $100,000 average sale price
• $20,000 average profit per sale
• 10% close rate

So pausing the campaigns for 9 months cost the client **drumroll please**: $900,000 in lost revenue and $180,000 in lost profit.

To be fair, there's some room for error here. This example doesn't account for lead quality or really low close rates. So what if we figure a measly 1% close rate? In that case you're looking at $90,000 in lost revenue and $18,000 in lost profit.

66% reduction in cost per sale

Here's a chart showing the average cost per sale for a client who had been managing their account in-house for over a year. The red line shows when we took over.

Note: The actual numbers aren't on this screenshot - the chart represents a drop in cost per sale from about $33 to $11

What's amazing about this chart is that we didn't even touch the website / landing pages during this period. This was only the result of account settings and bid / keyword optimization.

Real-life examples

Here's another client. This is another period in which we did not even touch the landing pages.

This is just snapshot of the last year and CPA is still dropping - so far from $49 to $10. This is all account settings and keyword / bid optimizations.

And here's another campaign for the same client. Over the last year, CPA has dropped from $7 to $3.

Here's another campaign - this time display - for the same client. CPA has dropped from $192 to $35.

These examples are typical of how performance improvements happen; that is, either slow and steady over time or we stumble across a great idea 6 months into a campaign like we did in the following example.

CPC dropped by 44%, total clicks increased 355% with only a slight increase in total cost.

Note: This client doesn't have an online conversion so I've used a chart showing clicks and CPC here.

Finally, here's a test campaign we ran for a client to see if their business concept might be marketable on AdWords.

A 90% drop in CPA! You know what caused that? We used ClickTale to monitor visitor sessions and discovered a single form field was confusing the heck out of our visitors.

Nothing magic here: removing that single form field was the sole cause of the performance improvement. Of course the account was setup right and well-optimized to begin with ;-) .

Argument from time

Wait, there's more!!

Even if those examples haven't convinced you, why would you even want to spend time on something that is not directly related to what you do for a living? Sure, I could probably learn to roof my house, but my job is to run amazing SEO/PPC campaigns so why on Earth would I want to spend any time not perfecting that?

Hell, I don't even clean my own house anymore. My time is far better spent doing what I'm good at.

Likewise, why would you want to spend time doing something you're not good at when you could be doing something you're awesome at?

AdWords (and marketing) is about slow, steady improvement, and occasional big wins

What's interesting about AdWords, and marketing in general, is that insights tend to come out of blue and over time.

In the example above with the single form field that made all the difference. Had we not spent the time to set that campaign up correctly and optimize it based on real data, we probably never would have thought to try ClickTale.

That was a last resort - after all, it was an incredibly simple form. But we thought to ourselves, "Well, everything else is running well, but people just aren't converting. What else can we try?"

If you're not taking the time to observe, measure, and analyze your prospects' behavior, you just can't make improvements.

And the big wins in marketing, AdWords included, come from knowing your prospects, knowing how they interact with your business and your website, how they search the web, and what their needs, desires, and objections are. Finally, you can't know any of that without knowing how to analyze the data and test to gain those insights.

And that's where the value comes in having a competent firm manage your AdWords campaigns.