SEM Strategy...In House or Agency

[Jay Nelson]

If agency, who would you say are the Top 3.

If In House, who handles it?

Thanks for the feedback.

 

[Ryan Everson]

If agency, who would you say are the Top 3.

If In House, who handles it?

Thanks for the feedback.

I would say it's difficult / expensive for a single point store or smaller group to do their SEM in-house and find the right candidate that can handle all the different aspects solo. If you don't find the right person it can cost you a ton in mistakes that exceed any agency markup fee.

Plus it's generally easier to hold a company to producing results vs an employee, especially one who is doing a job you don't understand. There's always exceptions though and it all comes down to finding that rare one man show SEM unicorn.

That being said, we handle all of our SEM in-house. We have a 3 person paid ads team that is following the proven framework I initially built and we're saving ~$1.25 million annually in management fees and performance improvement. The one battle you will face is less and less OEM's are allowing co-op reimbursement of non-approved vendors (aka an internal team).

 

[Alexander Lau]

I would agree with Ryan.

Like anything, it depends on the quality of your resources. A dealership's (to answer your question, it could be a GM, Marketing Manager / Director, Sales Director or even Principal, etc.) ability to find and retain them. Are there a ton of seasoned, professional Automotive SEM resources at most dealerships? No f*cking way.

If you can hire, train and maintain (retention is important, dealers need to learn to pay what's fair), then you can do it internally. I was that digital marketing guy at a dealership a while back. The dealer slighted me on pay, I walked away and their set-up got crushed. They had assumed it was a set it and forget it scenario.

Dealers that operate in larger cities are going to have an advantage, in that the talent pool is close. Dealers operating in the middle of nowhere have a tougher search on that talent. Groups like Ryan's are smart, yet an anomaly.

That said, if you cannot afford to pay for internal resources, dealers had better keep a keen eye on the waste and fraud (dedicate someone that understands what the agency is spending). Most agencies don't give a shit. We've been through this a ton of times.

You can just call me too Jay, LOL!

 

[John.H]

Coming from an Agency perspective, we've helped countless dealerships maximize their marketing budgets. In some cases decreasing them by up to 50%.

I'm biased, therefor I cannot offer any good opinion other than my own personal take on Agency vs In-House.

I've seen a LOT of dealerships have terrible staff, who are lazy and most definitely incompetent. In some instances, these staff members are what make or break a campaign. Usually this is on the BDC side, for larger dealerships. And for those that have no BDC, but an universal internet department, you're even more dependent on your staff converting internet leads into sales.

My biggest word of advice: If you have the budget to outsource, definitely outsource. If you lack the budget, do your best to incentivize your internet sales guys & BDC guys to test, and work hard. Because you're counting on them to produce leads & get them in the door.

 

[Marc Lavoie]

The decision you have to make is ultimately about control. But having more control doesn't mean it's better.

You should consider both if you have the resources in house, but like anything, having a top player will cost you. This cost will have to be absorbed in your marketing budget, raising the overall spend. Said cost will (should?) be lower the more dealers you have (duh).

I see it breaks where the marketing manager is handling too many different tasks ex.: PPC, website promos, inventory pictures, ordering a tent for the next even, managing the caterers, pulling stats from 3rd parties.

It's all a matter of size & volume. I've seen in-house folks doing great where I wouldn't even offer our car dealership PPC services because it wouldn't be worth it. Other times the change multiplied the ROI 3-10X... Like anything, you have to compare & evaluate.

Expertise & transparency is what you're after here. I suggest you rely on an agency that's 100% automotive. It's important your partner understands the challenges, conversion, metrics & market.

Just please don't hire someone to do ads if they're "always on facebook"

 

[Dan Sayer]

I would say it's difficult / expensive for a single point store or smaller group to do their SEM in-house and find the right candidate that can handle all the different aspects solo. If you don't find the right person it can cost you a ton in mistakes that exceed any agency markup fee.

Plus it's generally easier to hold a company to producing results vs an employee, especially one who is doing a job you don't understand. There's always exceptions though and it all comes down to finding that rare one man show SEM unicorn.

That being said, we handle all of our SEM in-house. We have a 3 person paid ads team that is following the proven framework I initially built and we're saving ~$1.25 million annually in management fees and performance improvement. The one battle you will face is less and less OEM's are allowing co-op reimbursement of non-approved vendors (aka an internal team).

Like what Ryan said, I would say it comes down to your talent resources as well. 99% of the time, an agency is the best choice and there a lot of great ones out there. I'm biased to Dealer Inspire after having worked there and just know their heads and hearts. I have a unicorn, though, that was truly my in-house resource for years but is now an agency this year after I moved him out of the group and into his own company (he had started that company on the side prior). So I still call him "in-house" but he operates with us a true agency now so it is easier for us to invoice for OEM programs (we are Ford, Lincoln, Kia, Mazda) etc. With that said, I would say go with an agency because the likelihood of finding a unicorn is well, like finding a unicorn. Pay attention to spend, make sure you have access to Adwords, and look for an agency fee of 20% or less with a cap on fees past a $5,000 spend. Invest in an audit every now and then from a 3rd party just to assure that you are making the right decision.

 

[Dave Lemmon]

Tricky stuff. So, you have your big players who do enough SEM they get the kickbacks...which allows them to likely charge you less. They also are, by definition, going to have less "eyes" on what you are doing. It is likely pretty much a repeatable, non-unique process for your store that they are doing with hundreds of others.

Personally, I like smaller companies with really smart people. For that, I really like Reunion Marketing. They are giant data nerds with actual retail experience. They benchmark their dealerships vs. each other to determine things that work. Most importantly, they dig deep into what is going on at every store to learn and improve.

 

[Dane Saville]

There has been so much said here that it's hard to come up with anything unique.

I guess the only piece of advice that I would offer -- and that many of you here on DealerRefresh know, but that I don't think many dealerships outside of here might be cognizant of -- is that if your circumstances make an agency more fitting than an internal team, work with a flat-fee and not a commission-based agency. Their decision-making won't be influenced by the potential to present a flawed, but smartly veiled, justification for increasing budget (e.g. enriching themselves).

 

[NickCybela]

The most important thing for dealers is to ensure they own their properties. Vendor changes will inevitably happen and learning that all the data/campaigns are gone can be incredibly frustrating.

For a group of 20 or more, you should absolutely consider doing it in house. Less than that you'll need an owner (not just GM) culturally invested in creating a sustained competitive advantage and creating a culture that can keep highly technical people engaged in a typically sales-driven environment.

You should also immediately implement a data policy that's a standard and required doc for all vendors.

We used to exclusively help dealer groups take their digital in-house (and then reduce or eliminate ourselves entirely). We don't anymore, but would be happy to share a few best practices / checklists if you're interested.