"Having a second, walled off team allows organizations to do things that would be impossible under a single roof. For example, the major search engines make it very difficult to lock up multiple paid positions within a single search campaign. But a secondary search team makes this an easy-to-achieve goal. An organization's primary SEM team can concentrate on gaining top placement for primary keywords while a secondary team can focus on lower positions."
On the face of it, this is a direct violation of Google double ad serving policy. Google will link the two accounts that are trying to do this. If you think you can simply create a second site, Google will catch that too and link the URLs. If people spend the time trying to do the right thing, rather than finding ways to mess with the rules, they would get better, longer-term results. "Testing is another advantage. Any time an organization can see its primary SEM efforts (the control) compared against an entirely separate campaign (the test), great insight can be gained."
My experience is that good testing structure needs good coordination. You can not tell your core SEM team to do nothing while the other team makes changes. You're playing two different positions (assuming you can keep Google in the dark), you are going to get different results. If you are isolating a variable, you do not need two teams to do this. The whole concept ignores some fundamentals of search. Consider that Google has a sliding (though secret) scale for using CTR in the quality score; it is based on ad position. The vary idea is that ads in different positions will get different results. This is not a reflection on the team that holds either spot on the listings. If you want to run a true test, focus on the copy utilized within a position, or the message connected to the landing page, or the point within the funnel to which you deliver the
prospect, or a host of any other variables. But to give one team positions 1-3 and another 3-6 or 6-9 and then compare the results is not a test.
If you want to compare the prowess of two agencies, fine. Give them separate assignment, normalize the results and see who comes out on top... then select ONE.
"And, of course, having multiple suppliers for any business process is the best way of keeping vendors honest."
I have never liked this motivation for a business practice. If you believe your vendors, or employees are going to screw you as soon as they get a chance, dump them, now. Don't create a situation that de-motivates honest partners and employees. Structured correctly, a good relationship rewards employees or agencies in proportion to their contribution to your success, thus minimizing the potential for getting complacent. I have always believed in looking for ways to motivate good partners rather than treat everyone like a potentially bad partner. You can not make someone honest. Either they are or they are not. Choose honest partners and accept the risk that sometimes we choose poorly, then move on.Larry Organ has long and successful career as an entrepreneur and perhaps he has used, or does use this strategy currently. But, for most organizations, this path is not as straight forward as it would appear. Focus on good SEM / SEO. Gaming the system, which is what this strategy is, will only be short lived at best.