Outsourcing PPC Campaigns? Pros & Cons?

Hi Marcin,

I do not want to discourage you from the "pay per results" payment model, however you need to be aware that it can be a tricky business model to make work successfully for both parties.

If your arrangement with the outsource agency is based upon a per lead payment it creates an incentive to generate the greatest number of low quality leads as they are cheaper to obtain and generate more profit for the lead generator. While this seems to makes the alternate model of "payment per successful conversion" appear more attractive, it too can have a potential downside as well.

When paying an outsourced agency based on successful lead conversions they will often focus on just the most profitable leads which tends to leave a great deal of potentially profitable leads to your competitors. They are likely to be very cautious about increasing lead generation as they bear all of the expense if you get too busy to handle the extra leads on a timely basis, so they will usually drip feed the leads at a relatively slow pace to maintain their own profitability.

The primary disadvantage to "pay per results" lead generation is you have absolutely no control over the aggressiveness of your campaigns, you are not in a position to maximize profits, you lose all potential branding benefits, it makes advanced marketing strategies nearly impossible, and you have no real control of your marketing plan. So picking the right partner is imperative to success, and keeping incentives in balance will still be a challenge.

No matter which path you take there will be pros and cons to consider. Just making the decision to outsource to the right partner can give you a huge advantage if they have the experience and marketing savvy to take your campaigns to the next level. Good luck in what ever path you choose and keep us posted to how it works out.