Adam Smith’s book, The Wealth of Nations–published in the same year as the American Revolution, no less!–is the book that convinced the world to scrap mercantilism and adopt more “free market” approaches. Or so we’re taught. And of course, his pin factory metaphor is still remembered as the classic example of the division of labor. The metaphor goes as follows: everyone doing his one little part on a factory line would let the factory produce more pins than lots of individuals that complete the whole pin-creation process themselves individually. This feels like common sense to us today but only became common sense after Adam Smith made it so.
But all this leads us to wonder: how would Adam Smith PPC?
The famous example of the pin factory would be a great metaphor for his approach: find specialists for each aspect of the PPC process. Many other philosopher PPCs would do everything themselves. I can even imagine Nietzsche, the superhero übermensch, running every tiny little aspect of his campaigns himself. “Why do I even need a designer to design the display ads? I can create them myself!”
But Adam Smith would have the precise opposite approach: let’s find a graphic designer, copywriter, Google Analytics data analyzer, tracking implementer specialist, a great keyword researcher, and so forth. And then, just like the factory line, let’s create a smooth process so that everyone sits there and focuses on their one aspect. This can scale infinitely!
How does the divided-labor PPC firm compare to the superman PPC firm?
Each has its positives and its negatives. The divided-labor approach has two main upsides: it’s easier to have a specialist for each aspect of the PPC process, and also lets the agency or team scale much more affordably. Better quality and much better scalability? Sounds awesome!
But there are two downsides to it. First, while there are specialists for each part of the process, in PPC, having an overall view is deeply important. Project Managers often just organize the parts to make sure the process flows smoothly, but in PPC, you need much more than a project manager. You need someone with a bird’s eye view who also understands the details, someone who can come up with the creative campaign and understands and navigates each specific part.
And the second problem is that while the divided labor approach will allow the agency to scale much more (better for the agency), it is also substantially more expensive (worse for the client). You can find many three-person PPC agencies that do fine work; but hiring a keyword-only expert, an ad-designer, an analytics specialist–and the uber-competent project manager on top of all them–suddenly, the little firm is becoming expensive.
Thus, Adam Smith’s divided labor approach, I would argue, would work well for high-end PPC firms with high-volume campaigns. But not for the corner shops. Indeed, this is a bit like the story of capitalism itself: helps the big boys, and also helps the smaller-boys who have initiative and creativity. As for the rest… no comment.
But Smith’s ideas get a bit more complex. Remember that before the Wealth of Nations, he wrote his Theory of Moral Sentiments which was fundamentally not about making money but (to simplify it into our modern language) finding happiness on the societal level. We simplify Adam Smith a bit too much by focusing on his idea that capitalism is just about making money. He was asking about how lots of people (aka, “civilization”) can organize themselves so that the majority benefits the most. And of course, making money–capital–is one component of it. But there are others–such as, what he called “moral sentiments” but I would just say, “being happy and good.” And as anyone who has ever dealt with other people… that’s friggin’ hard.
One of Smith’s core arguments in Moral Sentiments is that even if people are fundamentally selfish, to survive and thrive, they have to figure out ways to work together. (It’s a bit like the ethical analogue to the Wealth of Nations argument.) And this insight leads me to suspect that indeed he would be a great PPC. Core to the role is you have to figure out how to get people to work together–and appealing to their self-interest is a very powerful way. And in a world where success and failure are usually judged by ever-changing numbers on the screen, self-interest comes front-and-center too often. But this isn’t about the PPC work itself–it’s more the role of the account manager (in a bigger firm) or agency owner or partner (in a smaller firm).
Taken together, this leads me to predict that Adam Smith would be great at running a large PPC agency. But a small one? Perhaps our superman Nietzsche might want to lend a hand there.