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The digital marketing agency is one of the most resources-heavy business models available.
When you win more business, you hire more staff. Once you have more employees on your books, you are then forced to replenish that sales pipeline time and time again to keep everyone at full capacity.
It’s a continuous cycle. Win. Hire. Prospect. Repeat.
Continually hunting for new business takes a physical and emotional toll on the agency owner because you are juggling 101 other priorities at the same time.
But if you de-prioritize business development, then your overheads could collapse your bottom line. It’s stressful and at times overwhelming.
This is the exact reason why white label AdWords outsourcing exists.
In this article I’ll discuss the state of white label PPC management in 2018 and why it is important for you as an agency owner to understand.
What Does White Label Mean?
Most agency owners are on the lookout for ways to reduce their costs while still facilitating steady growth in client accounts. Naturally, the first place they search is for outsourcing solutions that can handle certain parts of the hands-on client work.
The number one reason people outsource is to cut costs.
Agency owners outsource for several different reasons. The Global Outsourcing Survey conducted by Deloitte shows this below:
Image Source: Global Outsourcing Survey
With an array of outsourcing options available, it can be complicated to know exactly what the right direction is for your business. So it’s no surprise that many agency owners often ask the question; “What is white label PPC management?”
There is nothing complex about white label PPC. It’s the process of buying something from a third-party (in this case PPC management) and selling it as if it were your own.
Imagine for a moment that you could buy a can of beans in a white package with no obvious branding on it. Then you put your logo and branding on the can and resell the beans under your business name. That is what white labeling is, except in this case you are putting your logo and branding on pay-per-click services and not a can of beans!
How is White Label PPC Management Different to Hiring a Freelancer?
Research by UpWork estimates that over 57 million people are freelancing in the United States. That is a staggering 36% of the entire workforce.
Image Source: UpWork
Given these statistics, it is no surprise that white label services are often put in the same category as freelancing. But working with a white label solution provider is very different from hiring a freelancer or subcontractor.
When you hire a contractor, you are bringing someone in-house to work on your client’s accounts. They usually charge an hourly rate or on a project basis, and you are in charge of managing that relationship as if they were an internal employee.
A white label partner is an organization, or individual, who provides you an ongoing service from outside your organization but, they disguise themselves as your business. From a client’s point of view, everything will look, feel and smell like it is coming from you.
Of course, you can tell your clients that you use a white label service, but it’s not a common practice. As far as the client is concerned they are paying you for a service, you are delivering that service, and they are achieving the results you have agreed on.
How is White Label PPC Management Different to a Referral?
White labeling and referral programs are not the same things.
You may be familiar with a typical referral process where you give a lead to another business for something that you don’t perform yourself. In this scenario, you are passing on the relationship. The client will be working with this new party and will hold them accountable to different outcomes than those that you are involved with. You may or may not get a referral commission depending on your arrangement.
With white label services, the client relationship always stays with you. Your white label partner is in the background doing all the grunt work, but you maintain the client relationship. For the white label provider, you are their client. This means you handle billing and determine the pricing and margins you achieve with each client.
Say for example you have an agreement with one client for SEO services, social media management, and pay-per-click. You may have the team and resources in-house to deliver two of these services, and the third you would white label.
Can My Agency Be Profitable With White Label PPC?
When it comes to being profitable with white label PPC management, it all comes down to whether you price your service in the right way. If you are reasonably priced, then white labeling can be highly profitable.
Your white label partner will have a price list of services they offer. From this list, you can ensure that the path you choose is compatible with your business and its profitability. Just make sure that your revenue model is in sync with the pricing model of your white label provider, because making money is why you are in business in the first place
One of the great things about working with a white label partner is the predictability. You know the precise white label PPC costs you will incur to deliver a service to your clients. Even if there are issues or re-work that needs to be done, that additional cost is consumed by the white label agency. It’s their responsibility. As far as you are concerned your cost is fixed. This is a huge advantage for agency owners who are used to dealing with the ongoing stress of overheads and untapped employee capacity.
Below is a graphic that illustrates the fixed nature of white label PPC costs:
Why Would You Consider Using White Label PPC?
There are a number of reasons agencies choose to white label their PPC management, let’s take a look at a few of the most prominent ones:
- It enables you to scale. Unlike hiring someone in-house, white label agencies don’t have a resource limitation. They will be able to scale up or down depending on the growth trajectory of your business. Your growth is not restricted to headcount, recruitment headaches, or overworked employees. White label is a low-risk alternative for fast-growing digital agencies.
- It can round out a service offering. Most marketing agencies start by offering one type of service. Something the founders are very good at and can deliver value for. But as you grow and build a client base it becomes attractive to make your suite of services more complete. For example, if you are an SEO specialist you may want to add PPC to your service list. Or if you are a social media management agency you may want to pitch content marketing to clients. It’s enticing because you can make more money from each individual client, but it also prevents other agencies swooping in and stealing the client because they can offer everything as a bundle deal. White label allows you to expand your services without increasing staff numbers or incurring training costs.
- It helps you build new relationships and win more business. By offering other services in a white label arrangement, you may be able to win more business at a faster rate. You can then sell these new clients into your core value proposition. For example, let’s say you are in a market that is rather competitive or one that has a long sales cycle. If you can white label a service that typically sells faster than your primary offer, you can grow your client base and tap into new opportunities. The icing on the cake is that you are doing this while making money the whole time. It’s like a profitable form of lead generation.
Where is White Label PPC Going in 2018 and Beyond?
The world is moving towards big data sets, analysis, deep data mining, artificial intelligence and machine learning. As markets become more saturated the need to tap into this data-driven approach to business becomes essential.
The process of decision-making for an executive today is significantly different to what it was even 5 or 10 years ago. If you want to remain competitive in the next decade, you need to be less reliant on intuition, and instead drive change based on statistical analysis, proven data models, and continual testing. For a small marketing agency who is working independently or without external funding, that is a hard thing to come to terms with.
How do you accrue enough data to make relevant decisions if you are only working with a handful of clients?
As the agency business model becomes more reliant on big data, the small-to-medium sized agencies need to find experienced partners who can bridge the information gap. A white label partner could be the missing link that will help you stay competitive and continue to grow.
Well-established white label PPC agencies have access to a lot of historical data and experience to make valid decisions from. So even if currently, you handle PPC management and other digital services in-house, there is a limited amount of data you have at your disposal.
Strategic partnerships with white label providers who have access to far more data than you could ever acquire may be the difference between growth and the extinction of your agency.