In-House SEM: 5 Factors to Consider

  |  September 15, 2011   |  Comments   |  

A comprehensive evaluation if you should stop outsourcing and bring your paid search efforts in-house.

Many companies, businesses and/or websites started their online marketing campaigns and/or search engine marketing (SEM) campaigns initially without experience. Businesses and websites often go through these five stages in paid search marketing:

1. Outsource SEM to ad agencies 2. Build an SEM team 3. Use a third-party SEM system 4. Build an SEM system 5. Create an SEM knowledge base

Outsource SEM to Ad Agencies


  • Instead of running SEM in-house, companies outsource search engine marketing operations to one of the local online/ad/search agencies. You are not required to build an internal (in-house) search marketing team.
  • You set a marketing budget and/or an objective, the search agency will have to do it according to your requirements.
  • The service abilities of ad/online/search agencies can vary considerably. Agencies can set up your search marketing strategies and execute according to the strategies, but whether your search campaigns succeed or fail also depending greatly on the ability of the agency to deliver.
  • You have little control over what you have requested the search agency versus what the search agency actually does for you.
  • You rely totally on the search agency you have chosen and may also run into trouble switching agencies if things do not work out.
Build an SEM Team


  • You have much more control over your entire search marketing strategies, budget, spending, and execution. You get to hire whoever you believe is the right candidate and put him/her to work in-house for you.
  • Over time, having an in-house SEM team is the route to build up SEM knowledge and experience.
  • Growing an SEM team is a long time investment. It always takes time to allow your SEM team, even the team leader to develop and grow, before they have acquired adequate search marketing experience.
  • The search human resource market is very dynamic. Keeping your top-notch SEM team leader/expert will sometimes be difficult as their skill sets are compatible across many different industries as long as they stay within the search marketing field.
Use a Third-Party SEM System Pros:
  • There're at least four to five key search marketing systems built by different vendors across the world. Choose from one of these vendors and you are already half way into SEM semi-auto management and optimisation.
  • Using a third-party system will save you a large amount of time than building the entire search marketing system from scratch.
  • Even if time isn't a constraint, initially you may still not have the knowledge and experience to build the right SEM system.
  • None of the best systems are for free, so you always have to set aside at least a small portion of your total marketing budget and pay the system vendor. Sometimes the cost for using any top-notch paid search system will be very high. The system fee gets even higher every year if you keep doubling your search marketing budgets year over year.
  • Learning how to use the best SEM systems can take time. It requires spending some marketing budgets on testing and getting services out of the third-party vendors, before your in-house SEM team will be able to smoothly control the systems and produce the best ROI.
  • Using a third-party system means relying much on the service quality of your vendor.
  • Most features in the top-notch SEM systems are built towards the general requirements for most of the vendors' largest clients. Being flexible in meeting some of your SEM team's specific/customised requirements can sometimes be very difficult.
Build an SEM System Pros:
  • As your team has grown adequate SEM optimisation/management experience and been using the key SEM systems from one of the four to five top vendors for years, you should consider whether it is time to build your own in-house SEM system. Customisation is one of the main reasons behind building your own system.
  • Cost can be reduced in the long run as you are no longer required to pay your third-party vendor.
  • Having your lead SEM expert to guide your software engineers and business analysts is a must. Your lead expert will have to be extremely knowledgeable in his/her field, as he/she will be the main reason whether your in-house SEM system turns out to be a great success.
  • Making a big switch from using one of the best third-party SEM systems to using your self-built system will cause a lot of pain for both management and SEM experts.
  • Lacking a very knowledgeable lead SEM expert in your team will definitely have a big negative on the quality of the in-house system that you are trying to build.
  • Designing portfolio bidding algorithms that work for your SEM campaigns can be extremely complicated for many in-house SEM teams and can take a long time to research.
Create an SEM Knowledge Base


  • Once you have an experienced search team and reliable system in-house, the next objective is to create an SEM knowledge base. Depending on how you structure your search marketing teams, you should always have a core search marketing team that is experienced and responsible to set up the knowledge base. Sharing the knowledge, setting overall company SEM strategies, and working in hybrid SEM team structures will help every business units to grow stronger.
  • It takes a lot of time, experience and marketing budget to eventually be able to create an SEM knowledge base that can be shared across all business units of your entire company.


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Gordon  Choi

Gordon Choi is the co-founder of, a Shanghai-based firm specializing in data analytics and data integration solutions. Gordon also volunteers at Web Analytics Wednesday China, assisting in the conference and content operations, and volunteer recruitment. Gordon's previous experience includes leading in-house teams at and Alibaba. His areas of expertise include strategy, solutions and workshops for multi-screen data integration and mobile SEO for the local Chinese market.  

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