- Summary: Key business factors to consider when deciding whether to develop in-house marketing teams or outsource your marketing function to third party marketing agencies.
Editor’s Note: This post is based on an article originally published on the WSI blog site in November 2020.
There’s an important business decision that all businesses have to make: “Should I hire an in-house marketing staff, or an outside digital marketing agency?”
Whether your business is just a 2-person start-up, or an organization with over 50 staff members–it’s still a tough call. There are benefits to working with a digital marketing agency, but there are disadvantages as well.
So the answer to this question is: “IT DEPENDS”. It depends on how many functions you need, and where you want your company to be in the future.
The way to figure this out is by creating a clear definition of your organization’s marketing goals, and making a very honest and objective assessment of your own team’s strengths and weaknesses. It’s a critical step you need to take to help you determine whether your marketing initiatives should stay in-house, or you need help from outside experts.
Consider that even our principals at WSI headquarters have looked outside and recruited outside agencies for help. Even though we have a talented team of in-house marketers there, we also supplement that with a network of external subject matter experts and agency teams to whom we outsource any time we need extra marketing help.
If you read the title of this blog article and thought we were going to give you a one-sided hard-sell on all the reasons you need to out source your marketing to this-local-WSI-agency, you were wrong!
What we are going to do in this article instead is present all the factors, pro and con, that you need to think about, with a focus on small- and medium-sized businesses. Hopefully this will help you make the right decision for your own business.
It’s natural for your company’s team members to prefer to work with marketers who share your company’s culture, vision and values, and who have a keen understanding of your industry. Most of the time, it’s easier to do this by working with an in-house team. A full-time internal employee is going to have much more of a stake in your company’s success than any external agency team would ever have. On the other hand, an outside marketing agency has to divide their attention across a number of different clients. Having to do that makes it more difficult for them to get as deep an understanding of any one particular client company’s culture and values. Your own in-house personnel are people chosen by you, so they are more likely to share the same values as you. They are also more likely to have a better understanding of your business products and services too.
When you hire a marketing agency to work for you, you need to spend time and energy to educate them about what your company is about. That can take time, and even then, they may not have a perfect understanding. In all likelihood, you will have to be cognizant of this and pull them back in every so often when they veer off in the wrong direction.
Depending on your company’s marketing strategies, your team might need access to several different skill sets, like web development, social selling expertise, email marketing, pay-per-click advertising, and so forth. Trying to build an in-house team packed with all of these talents is not easy! On the other hand, third party agencies are usually already equipped with knowledgeable professionals who specialize in all areas of digital marketing. They can be your “go-to” source for finding all the marketing talent you need.
On the other hand, if you decide instead to recruit, screen and hire a full-service in-house marketing team, you will first need to know what kind of talent you need, and second, be ready and able to dedicate a lot of time and effort to put that together. Consider that the average time it takes to hire someone is 50 days–this is close to two months!
You would also need to figure out the right balance between headcount and workload. If you hire too many people, the problem will be having enough work to keep them busy all the time. If you don’t hire enough heads, they may not be able to handle the workload needed to hit your company’s marketing goals by your target timeline.
Of course, even if you decide to work with an agency, you’ll still need to spend some time researching, screening, and pitching to multiple agency candidates to find one that works best for your timeline and the goals you have set. You may even find yourself having to work with more than one agency if a single one is unable to cover everything you need to get done.
Workplace politics are hard to avoid it when you have a group of talented people working closely with each other, day after day—conflicts will arise, and with it, struggles and maneuvering to build influence that can distract from the work at hand.
When your marketing is managed by an outside agency, you won’t have as many problems with this. That’s because as third-party marketers, an agency team are able to focus on just one thing: your company’s marketing strategy.
Digital marketing is constantly changing. Tactics and tools that once worked yesterday won’t necessarily work tomorrow. Competition is tough, technologies change at a lightning pace, and if you don’t keep up, your business will eventually get left behind. Luckily, a marketing agency has every incentive to stay on top of the latest and greatest digital marketing best practices. They have to do this in order to stay competitive.
This is particularly true with search engine optimization (SEO). Google’s search algorithms are updated multiple times each year, and keeping up with them is extremely important. Not keeping up can severely impact your online visibility. You will see this in the form of declines in your search result rankings.
Marketing agency teams also often get first crack at the latest, ground-breaking technologies and educational marketing conferences – most of which are just out of reach for in-house marketing teams.
Say you need to jump on your marketing right now. For example, you discover you’re losing sales because your closest competitor just launched a super user-friendly eCommerce website and yours isn’t even equipped to support online purchases. Obviously, your website needs to be overhauled quickly to stay competitive.
The quickest way to do this is NOT by posting a job, reviewing resumes, conducting three rounds of interviews, calling references… and so on. A good marketing agency can jump in and work quickly and efficiently to help your team adapt your marketing strategies sooner rather than later. Ultimately, emergencies that affect your bottom line are better handled by agency teams. Remember –TIME is MONEY.
This is similar to #2 above, but it goes far beyond the specialized skill sets of your marketing team: in-house marketers generally won’t have quite the same breadth of expertise as a full-service agency will. If you are ever in need of certain more specialized marketing services, like customer service script writing, video production, or traditional PR services – your best bet would be to use an agency. Because of their specialized focus on marketing, an agency is more likely to be a “one-stop-shop” for a broader range of services and also have the structure and experience that goes along with it.
Because agencies work with a broad range of different clients and industries, they come into contact with newer technologies and inventive tactics. Whenever your internal team lacks the skills, an agency can help fill in the gaps. For instance, they can optimize your webpages for target keywords, manage your paid advertising campaigns, and design creative material, like brochures, videos, and ads.
Agencies also bring an outsider’s perspective that can help in-house marketing teams identify opportunities to innovate. Because they work with many clients in different industries, they will have a broader viewpoint and visibility of what is going on. This gives them a better sense of what has is already “old hat”, and what is actually new and exciting. This makes it much less likely that your marketing strategy will become less creative over time.
Open and efficient communication is vital to keeping any business’ marketing plan running smoothly. This is relatively easy with any in-house team because they can schedule brainstorming sessions, content approvals and meetings on-the-fly, whenever they need to. Agencies, on the other hand, cannot be accessed so easily; day-to-day communication will be sparse by comparison because of the number of clients they have and their competing client needs. Typically, marketing agencies will stick to email or phone communication as needed while also conducting weekly or monthly meetings to discuss status updates, projections, quarterly plans, and so forth. Additional meetings can also be held to discuss more urgent issues
Both communication methods can work – but success depends entirely on your personal preference, balanced against how quickly you need resolution for any issues that may come up.
A decent marketing agency will already have access to the industry’s latest “must-have” technologies. Many will also test and invest thousands of dollars in annual subscription fees in order to equip clients with the best tools. Spending time researching new technologies is a time-consuming and expensive process. It’s a time investment that you don’t even have to think about if you work with an agency. Sure, the price of using these tools is baked into what they will charge you, but the headache and the agony associated with deciding on which tools to use are not.
With an in-house marketing staff, you’ll need to pay for training, office space, equipment, and benefits on top of their salaries. Very likely, if you are a small- or medium sized business, you may be constrained by your budgets to hire everyone you need in-house. If you hire a marketing agency, you are more likely to get all your required skillsets, and it will also most likely be more cost effective. Consider that for the cost of employing one social media manager, you can retain a multi-service professional marketing agency and gain access to an entire cadre of digital marketing experts.
A good way to estimate the cost of an in-house team is to figure out which roles you need, and the average salary for those roles.
Let’s take a look at the following roles and average salary for each in San Jose, CA:
|Position||Avg Salary (San Jose, CA)||Real Cost = 1.5 * (Avg Salary)
(San Jose, CA)
|Digital Marketing Manager||$108,375||$162,562.50|
|Digital Marketing Specialist||$72,465||$108,697.50|
|Social Media Marketing Specialist||$58,527||$87,790.50|
|Email Marketing Manager||$86,098||$129,147.00|
|Content Marketing Manager||$93,956||$140,934.00|
Add the cost associated with supporting a full time position with benefits — medical and dental insurance, 401K, bonuses, equipment, software, technical support, office space, furniture, and so forth. Note that these costs can range from 40-100% of an employee’s salary. Total this up and compare this to what it would cost to hire an agency to perform the same tasks for $1,000 –$20,000 per month.
Combinations of In-House and Digital Marketing Agency
Numerous companies opt to outsource all of their marketing activities to digital marketing agencies. These agencies are fully set up with the proper staff, expertise, and resources to provide outsourced full-service digital marketing services, including social media management. If you do not have the budget to hire a fully-staffed marketing team, hiring a digital marketing agency can be a cost-effective option, especially for small-to-midsize businesses (SMBs).
Many businesses find that a hybrid approach works best. They will typically have at least a core team of in-house marketing professionals; however, they may have gaps in expertise or resources. It can be much more cost-effective to supplement this in-house team by outsourcing key services to agency specialists such as professional marketing firms. Even Fortune 500 companies with their own in-house marketing staff may choose to outsource portions or all of their creative work to agencies.
What basic functions are essential to have in-house? It’s usually good to at least have some very basic ones. This may include aspects of project management and hiring. It can include internal staff to control the vision and pull different functions and teams together, and maybe drive deadlines. For example, the internal personnel you hire could consist of a graphic designer, a project manager, and a direct marketing manager, because that’s all you can afford. To cover skills like brand strategy and positioning and writing, video and animation, SEO, and web development, to name just a few, you can either train those same staff members, or find contract resources.
An agency can offer you access to all of those skills, even those you only need for a few hours per week or month. Their work will be more coordinated than if you were to just contract the work to freelancers, because an agency could also handle much of the project management and communication for you.
How to go Hybrid
When deciding how to structure your in-house marketing team, take a look at your strengths. Typically, in-house staff live and breathe the company brand and tend to have a far more in-depth understanding of the unique selling propositions, product set, industry, and buyer personas. In-house teams are often better suited to create content, write messages, and develop communication strategies. However, in-house teams might find it difficult to implement new software, manage social media feeds, or keep up with SEO best practices and paid search trends.
Also, consider what some Fortune 500 companies do—outsource their creative tasks:
Fortune 500 companies usually have marketing creatives in-house; however, they may also choose to outsource some or all of their creative requirements to external partners such as ad agencies, design firms, and outsourcing companies when needed. Apple’s longstanding engagement with the advertising agency, TBWA/Media Arts Lab is a great example of this. (Remember that iconic “1984” commercial?) Whenever they outsource this work, the in-house marketing creative teams can just focus on directing the creatives from the client-side and making sure that the company’s internal stakeholders’ requirements have been met.
In addition to handling strategic creative direction, the internal team will also typically handle internal account management and project management. Often, these teams will also manage the workflow from one external partner to another.
- Follow Best Practices
Agencies are fluent in the best practices of nearly every marketing tactic. They are professionals who have worked on an infinite number of different accounts.
- Operate at Higher Efficiency.
Ad agencies can work far more efficiently than an assembled in-house marketing team. Because outsourced marketing agencies handle so much of the same type of work, they will have state-of-the-art tools, workflows and processes that are built for quality, volume, and efficiency.
- Quickly Identify Sources of Expertise.
Agencies also usually know the best talent around. If you want to find the perfect person to create illustrations for a marketing campaign, they will be able to quickly pull the ideal person’s number off their phone “rolodex”, whereas your in-house marketing team may take days to find someone who is competent or good enough.
- Deliver Fresh Approaches
Outsourced agencies will have an easier time delivering fresh ideas, both for creative and marketing tactics, than an in-house team.
- Access to the Best Tools and Software
They may also have access to tools and software that smaller in-house teams can’t afford.
Because of its “laser focus” on digital marketing, an agency often comes with skills that in-house teams can’t match, especially internal marketing teams in smaller businesses. These capabilities can range from accessing beta features in Google Ads to the latest data on the effective tactics or strategies.
So, what if you can only afford to hire a small number of employees for your internal creative group? You’ll have to think about what minimum set of skills you will need internally.
What are the benefits of hiring a digital agency vs. hiring in-house personnel to manage social media?
- More extensive knowledge and experience
This is probably the greatest advantage that professional digital marketing agencies bring to the table. Agency employees eat, sleep, and breathe digital marketing and have a wide range of experience across numerous industries. When it comes to social media, they will have a thorough understanding of which social networks your company would benefit from, and they know the ideal approach for executing your campaign.
For instance, most B2C businesses will typically use Twitter, Facebook and YouTube. Depending on your industry, products, or services, an agency might also recommend using Instagram, and Pinterest. For B2B service businesses, on the other hand, it might make more sense to try to focus more on more professionally oriented platforms like LinkedIn.
- They can “jump right in” and immediately steer you in the right direction.
Due to the learning curve associated with digital marketing, partnering with an external agency for social media can help prevent typical “newbie” mistakes. Rather than spending time and effort experimenting with different possibilities, you’ll be able to put a concrete plan into action right away and get a faster return on investment.
- Monitoring and Analytics
As your marketing campaign progresses, an agency can also use analytics and other tools to optimize various aspects of that campaign. For instance, they may use software like Google Analytics, Buffer, Sprout Social to monitor each social media channel. Knowing which software to use and how to use it takes time to master. An agency’s skill set will help unearth a wealth of information over time that can help you continuously adjust and optimize your approach. This will translate into more shares, more followers, and ultimately, increased sales.
- In-house Overhead – Hiring, Training and General Expenses
You will first have to find, interview, hire, and onboard these new employees. Then you will have to manage the overhead of their salaries, benefits, time off, and maybe office furniture and computer equipment,.
- Deeper skill set and broader expertise
In-house marketers may not have a skill set as deep or broad as agency employees.
- Longer lag before seeing results
If you need to scale up your marketing program rapidly, you may be slowed down by the process of finding and hiring more employees with the right skills.
- More likely to get stale
It’s highly likely and very common for in-house marketing teams to get stuck in a rut with creative styles and marketing strategies.
- Greater impact of staffing departures
If a vital member of your marketing team quits, your entire marketing program may freeze until you can find a suitable replacement.
In the end, the answer to the question of whether you should outsource your marketing or keep it in-house is depends entirely on your particular situation. After going over our 9 key business factors of the in-house marketing vs. marketing agency debate, if you find yourself, or your team, leaning one way or the other, that could be your answer.
If the list of pros and cons is equal on both sides, then you could be like the many businesses that do both. It never hurts to ask for help, especially in areas where you don’t have an expert on the team, or with new and trending tactics you’re trying to gain a competitive edge with.
Outsourcing and going it alone can both be the correct, cost-effective decision that generates the best results for your business. If you’re having trouble deciding which way to go, we’d love to discuss your marketing situation with you!
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