I was reading the blog post by Tim Ash on Search Engine Watch where he talks about the handbook produced by the Marketing Sherpa’s called “Landing Page Handbook”.

Tim’s post draws on the results from the handbook exploring the average conversion rates for different marketing tactics. The survey data was drawn from over 5000 active online marketers in a variety of settings.

In-house managed PPC Search - 3.84%
Outsourced managed PPC Search - 5.40%
Difference: 40%

In-house Natural Search Optimization - 2.62%
Outsourced Natural Search Optimization - 4.76%
Difference: 80%

What this suggests is when outsourcing SEO/SEM to a specialist agency, the conversion rates are much higher. Please note that statistics are always simply a gauge, the statistics did not breakdown the results by industry or company sizes, or other critical information. However, at a high level the data makes perfect sense, since agencies must perform better to justify their fees and keep their client’s loyalty and business.

Agencies that are specialists in a particular area see a wide cross-section of accounts and industries among their clients and should be able to do a better job. This post is not intended to criticize  in-house SEO/SEM teams but make the point that the Search marketing industry is moving very fast, and unless you have a whole organization focused on keeping up with the changes, it is very difficult to stay up on the latest developments.

Marketing activities are the engine of growth for a company. They are not administrative cost centers. Many companies mistakenly try to save a little money by running their programs in-house. They do not realize the real cost is in the lost opportunities that they can not capitalize on. If your in-house program is profitable, that is not enough - you must consider the scale of your program and always question how much money you might be leaving on the table. Giant conversion rate differences such as the above can be turned into strategic weapons that let you soundly trounce your competition.

So next time you consider the in-source / outsource decision, consider the opportunity costs as well as direct costs.