It depends on your budget. If you're looking at more than $25,000 per month in spend then I would argue the in house route with a professional advertiser. From $6000 to $25,000 you can hire a bright intern to teach the ropes and keep them part to full time, depending on how much work your campaign(s) need. Less than $6000 I think you would be able to manage it effectively yourself.
My own experience is that I had done some minor ppc work prior to my current job. When I started my job we were using a third party company and had been using them for several months. The company that we were using is one of the VERY large names in the business and apparently they have some super-duper software that they use for managing campaigns and a huge staff of people itching to get to work on our advertising. Whatever. Their fee was about ten percent of our ad spend and it was actually MORE than my starting salary.
I looked at what they were doing, and in my horror of the royal mess they had made I decided I could do better. I studied up for a month during down moments from my other work and started to work.
Overall I increased our CTR ~25% and, with some landing page redesign, increased our conversion rate 160%. So our advertising became nearly 3x as efficient as before in a little under a week once I launched my changes. Even if you chalk the conversion rate increase to just new landing pages, that's still a huge increase in CTR for a one man show vs a company that claims to handle tens of millions of ad spend per year.
The moral of the story is to be VERY cautious of using 3rd party companies. Keep tabs on them and run your own testing on the side. Make sure that you've very clear what your advertising goals are (cost per conversion, etc) and fire them promptly if they don't hit their goals. I support hiring an staff person just because you can make sure they're going in the right direction and keep an eye on them. And of course, depending on your local laws, you can be just as stringent with them as with a third party company.
