As Geddy Lee of Rush sang, “If you choose not to decide, you still have made a choice.”
It’s a pearl of wisdom that applies to business in general. And it strongly applies to the decision to do your marketing in-house versus hiring a marketing agency.
Countless small to mid-size businesses have added marketing to their already numerous obligations. To get to the heart of the matter, hiring a reputable outside company could be the superior path for their business, but giving current employees another hat to wear is perceived as cost-effective.
On the other side of the spectrum, you have established companies that have always had an agency handle their marketing. They lack the experience, the ability, and the desire to assemble a marketing team and launch effective campaigns.
Since you’re researching this topic, you’re clearly not in the two camps of leaders that have opted out of the decision. Thus, I’ll equip you with the information you need to make a conscious choice that’s best for your organization.
Pros and Cons of Doing Your Marketing In-House vs. Hiring an Agency
To get started, let’s look at the benefits and drawbacks of doing your marketing in-house. After that, we’ll do the same with hiring an agency.
Pros of Doing Your Marketing In-House
- You have greater control of the process. Companies with leaders who have a strong background in marketing can gain from the ability to control all processes. You play a role in forming the strategy, the message, the artwork, media buying, or any other aspect you excel at. There are more opportunities to see the work as it progresses and ensure it’s on target.
- You assemble the team. Do you have talented marketers within your company? If you can assemble a full team without starting from scratch going in-house becomes an attractive option. It gives you control over who is assigned to each task.
- You have full access to the processes and assets. You own not only the finished work but also everything that went into it. For example, for a short video project, you gain all the raw footage, outtakes, graphic elements, video editing files, etc. That becomes useful when you find ways to repurpose some of the elements. There tends to be greater transparency about processes and tactics because it’s another operation within your company, not a supplier with their own interests to protect.
Cons of Doing Your Marketing In-House
- There’s a big learning curve, and it will cost you time and money. Installing an in-house team requires training at the very least and in many cases hiring as well. There are opportunity costs associated with developing your own marketing talent. And since you need to create awareness and generate results sooner rather than later, it creates uncertainty in a critically important part of your business.
- It diverts attention away from your core business. Leaders often greatly underestimate how much time and resources are needed to create effective marketing. If it’s another box to check for team members it could result in diminished performance at what you originally hired them to do. It could also make consistent marketing efforts challenging or near impossible when primary operations demand their full attention.
- Your team may struggle to make an impact. It’s often said that everyone thinks they know about marketing but it’s a rare breed that consistently brings results. Your team could have the writing, design, and technical chops to produce work that looks professional. But when tested it could prove to be largely ineffective.
Pros of Hiring a Marketing Agency
- The team of experienced experts is ready for primetime. Marketing agencies have proven teams that have boosted companies like yours to greater heights. The experience they’ve gained by working with other brands becomes an invaluable resource you can tap into.
- You get access to fresh perspectives and ideas. Potential customers look at your business and offerings with fresh eyes. And sometimes decision-makers lose clarity of their customer’s perspective because they view it from the opposite side each working day. Marketing agencies bring new solutions and fresh insights that weren’t considered internally. They build the bridge between how you see your brand and how your customer sees it. Building a strong connection with your audience becomes a larger target that’s easier to hit.
- You benefit from their efficient and effective processes. Nobody knows your business like you do. That’s also true of marketing agencies. They have the processes in place to ensure your marketing is produced with efficiency. They have the skills and tools to analyze your marketing data and improve the effectiveness of their campaigns over time.
- You get results. Although marketing is a long game, agencies know that clients who see measurable results are happy clients. A good agency will demonstrate its value month after month.
Cons of Hiring a Marketing Agency
- Good talent has the price to match. If you hire an agency it’s certain you’re serious about your business and your marketing. A relationship is required to make meaningful progress and that means making an ongoing investment in your marketing every month.
- You need to trust their judgment and abilities. Agencies are accustomed to pitching their ideas and explaining the rationale behind their decisions. While accepting or rejecting their ideas is part of your role, if you question many of their choices they might not perform as well as they’re capable.
- You need to give them control and focus on key decisions. Maintaining control over the details negates one of the greatest benefits an agency grants you. Thus, if you want to play a big part in how the work is executed it probably isn’t the right time to work with an agency.
- You have to find the right agency. Good agencies have a style. They view creativity, data, media buying, and every other aspect of what they do a little or a lot differently than other agencies. Their approach needs to be compatible with your approach. Otherwise, you may find a middle ground that isn’t ideal for you or them.
Agency vs. In-House Marketing: Which One’s the Best?
For many leaders considering this decision, it’s not an easy one to make. There are so many variables to look at: leadership style, the team, budget, the size of your company, etc.
Digital channels are crowded, and it’s harder than ever for businesses to stand out. Customers need to trust your brand to make a purchase. And gaining their trust is no easy feat as trust in businesses overall has seen better days.
So, let’s view this from the perspective of your potential customers. What’s important to them?
It’s far more important that your marketing is good than how it’s produced!
Your audience wants to consume content that educates them, that entertains them, and that enriches their lives. Only the highest quality content is deemed as worth their time. They don’t care if it’s marketing but it better be good marketing.
Now ask yourself this:
Considering the pros and cons and the characteristics, strengths, and weaknesses of my company, will an agency or in-house team be more likely to deliver the most effective marketing?
Everyone and every team will have their biases when answering that question. But data doesn’t lie.
Early on in your company’s development, you have to make the final call with your gut. Companies that have done some of their marketing internally and also have hired suppliers have a unique advantage. They can look at past results and make an educated choice about whether it’s better to lean into in-house marketing or to have an agency handle the bulk of it.
Looking at Costs Realistically
Many leaders assume doing their own marketing is the least expensive option.
It might seem like it if you get your current employees to devote some of their time toward marketing. But at the end of the day, it’s not uncommon to get lacklustre results and pull them away from what they’re best at.
To do in-house marketing right you need an in-house team. And assembling a team devoted to marketing is actually more costly and less scalable than hiring an agency.
Let’s consider a scenario in which you build a small in-house team. You hire a marketing manager ($100k/year), a copywriter ($75k/year), a designer ($75k/year), and a media buyer ($75k/year). Your operating costs are $325k per year. It’s a hefty sum, but they’re hours and focus are fully devoted to your brand.
When you hire an agency, you’re fractionally leveraging their talent. Let’s say you hire an agency on a retainer that’s $4k per month. After a few months, you’re satisfied with the work and you opt to double the hours they devote to your account, putting it at $8k per month. Your operating costs are now $96k per year. From a budgeting perspective, that’s a lot of flexibility. And you get access to people with specialized skills that go way beyond the capabilities of a small in-house team.
Either way, top talent costs roughly the same. It’s a matter of buying people’s time in two different ways. The key difference in terms of cost is you can hire an agency with a modest budget or a large budget. To build an in-house team you need a healthy budget of $250k and up.
Capabilities of Agencies vs. In-House Marketing Teams
When it comes to agencies, there are small boutique firms, mid-sized firms, and large full-service agencies (usually owned by global holding companies).
Boutique firms tend to focus on a few key offerings such as email marketing, website design, and social media marketing. As agencies grow, they tend to expand their capabilities and offer their clients anything from app development to highly specialized services like metaverse marketing.
Thus, in terms of the width of their capabilities, big agencies win. And in terms of the depth of their capabilities, smaller agencies tend to have an edge.
Naturally, in-house marketing teams have the core capabilities their company needs the most. The ability to customize and shift the marketing department’s capabilities based on the changing needs of your business is a must. However, in-house teams lack people with highly specialized skills that aren’t part of the ongoing marketing strategy. And projects that break the pattern of common tactics make a huge impact. Some examples of this are pop-up shop marketing, in-game advertising, and OTT advertising (streaming).
Consistent, standout marketing is critical to your business’s success. And having an agency or in-house marketing team in place makes it a reality.
Although choosing between in-house marketing and an agency can be a challenging decision, it’s not a final decision. Numerous factors such as economic conditions, industry trends, or shifts in leadership can move companies towards one or the other. Remember, it’s better to take action and adjust than to postpone the step forward you need to take.
I hope you leave this article with takeaways that give you confidence in your path to attain the marketing your business deserves.