In-house vs Outsourced Pros & Cons: Digital Marketing

Your business has been around for a while and you are thinking of scaling things up now. You have found the right product-market fit. Alternatively, maybe you’ve already seen success with marketing and want to accelerate your efforts. A study by Contently and Adweek shows that 76% of marketers believe they could increase ROI or marketing reach by two to five times with an expert team delivering high-quality marketing strategies.

It's clear that you need many hands on deck to accomplish your goals. However, should you hire a marketing agency or build an in-house team?

To help you take an informed call, I have compared the costs and ups and downs of building an in-house marketing team versus hiring a marketing agency.

In-House Team Benefits

Brand Connection

An in-house team will always have a more thorough understand of your brand's vision, goals and history and will be better positioned to give a voice to your marketing outreaches that are true to your brand's core mission.

Having an engaged team is one of the biggest advantages you can have against your competitors. If you cultivate a culture of open communication where innovation and ideation flow seamlessly through the hierarchy, an in-house team will always have a tactical edge over an agency where you have to take time explaining your brand's positioning.

Customised Expertise

By building your own team, you have the chance to hire people with the right mix of talent. For example, if you run a content-heavy product, you can hire a large number of subject matter experts, thought leaders and social media experts who can make it easier to create and distribute authoritative content on a regular basis. If you are a SaaS business, you might want a more evenly distributed setup between content marketers and customer acquisition specialists.

However, there is a flip-side to this, as I have discussed in more details below; it is hard to find the candidates with the right mix of existing knowledge and experience in your industry. It becomes especially difficult if you are in a niche vertical.

Faster Processes

Being physically close or having direct contact with each of your team members can speed up the research, strategy, and execution processes. Agencies are not going to be familiar with the business structure of your organisation. If any process needs input or help from the non-marketing departments like tech, product or business, an in-house team is going to be in a much better position to resolve dependencies.

However, if your's is a very large business with hundreds of employees spread over multiple departments, this benefit can quickly wilt away due to almost unavoidable hierarchical and communication challenges.

In-House Team Drawbacks

Difficulty Finding Talent

In a study by Moz, they found that there is a massive spike in marketing talent since 2012 and the trend is not going to slow down till at least 2020. It's anyone's guess this upward curve it is not going to change even after that. As the demand for marketing skills grows, it’s becoming increasingly difficult to source and recruit talents with the right mix of creative and analytical skills that are required in today’s marketing universe. The below graph shows the rise in demand for the role of Digital Marketer:

Many hiring managers are spotting large skill gaps because of the speed at which marketing technologies and strategies are evolution. If you build your own team, you will face the same challenge and compete with others to attract and hire the best talents out there. This can quickly become an expensive and time-consuming effort.

Furthermore, as the marketing itself continues to evolve with emerging technology and new platforms, your employees will need to be continually trained in the new tricks of the trade, making it difficult to ensure that your team has the right technical, creative, and marketing proficiencies needed to beat your competitors. In a research done by Bullhorn, 64% of hiring managers reported a shortage of skilled talent for marketing positins, with only two potential candidates for every job opening.

Complexity of Skills Needed

Marketing in today's world is a very complex universe. There are a number of different fields in which expertise is required to succeed. Not only is marketing itself diverse, there are many support verticals as well - copy writing, design, marketing tech and more.

An in-house team will have set bandwidth and muddling other teams to partake in the marketing efforts is a terrible idea. The needs of every campaign that you run are going to vary from one another needing you to delegate tasks to the same set of team members or continually add new hires to your existing setup.

Inability to Objectively Look at the Brand

Why do we keep finding brands producing content that lack depth or personality display, see ads that are uninviting or unvarying? It is because in-house internal teams often struggle to think objectively about the brand. It is the same reason why a good customer discovery expert never interviews in-house staff even if they fit a target audience persona. It is challenging for an employee to change the mindset and create strategies that are customer-centric and not brand-focused.

Advantages of a Marketing Agency

Right Mix of Experience & Talent

Using an agency gives you access to its collective knowledge. An agency faces a different variety of goals and challenges and they, in most cases, have experimented and explored a variety of solutions and channels. Marketing needs a number of different skilled professionals - writers, strategists, designers, marketing tech, PR specialists, data scientists, and more. You’ll need to have a large team to acquire such an extensive range of skills.

Fresh Perspective

An agency is going to provide you with a fresh look at your brand and products without any internal biases that may influence the type of strategies employed to reach your target customer. A good agency will be able to identify areas for improvement as well as conduct deep-level audits. This can be difficult for an internal team who live closer to the product and are emotionally vested in the brand.

Access to the Latest Tools

Having access to great tools can increase the efficiency, productivity, and performance of your marketing strategies. However, these tools usually are expensive. Given the number of different platforms and channels your marketing efforts will utilise, the sum total of the cost can be very high. Not to mention the skills need to use them. Marketing agencies usually already have these tools because they are irreplaceable to them in their day to day business.

Consider the cost of just some of the top marketing tools that are commonly used:

• Bright Local (local SEO) – £45.16/month

• Raven Tools (social media, SEO, PPC) – £173/month

• Hootsuite (social media) – £69/month

• AWeber (email marketing)- £104/month

• Sprout Social (social media, SEO) – £348/month

• Manage Flitter (Twitter management and marketing) – £34/month per account

• ReleaseWire (press release distribution) – £49/release

All included, an agency can save you over £30,000 a year on marketing tools alone.

Marketing Agency Drawbacks

Less Control

Many internal teams are hesitant to give up some control to an agency, but handing over control is the trade-off for offloading work that you don’t have enough time or resources to handle internally. Finding an agency that strikes a balance between taking ownership of projects while also keeping you in the loop is key. For instance, the client should be asked for feedback and approval at crucial stages, such as signing off on ideas and strategy before production begins.

Many Pies

Make no mistake, working with an agency means you’re not their only client. Some will let this affect their availability and maybe even the standard to which they complete work. It’s about managing expectations and how important you are in their eyes. Often this comes down to their passion for your business, and the available budget.

Wrong Fit

As there are countless agencies out there, finding the right fit can be difficult. Depending on their background, experience and other current clients, it may simply be a case that the agency don’t work well with you or within your industry. Know what you’re getting into before making the choice.

Communication

Despite being connected to some kind of tech 24/7, your digital agency may be surprisingly hard to get hold of at times. Client meetings, and other work may impact their availability. Don’t let these factors affect your campaign. If your agency is not responsive, consider moving on.

Cost comparison:

One important consideration in deciding in-house vs marketing agency is the cost. Which is going to be cheaper or give better ROI in the long run? Let's look at what the costs might be in creating an in-house team:

The first step is recruitment. Your costs will include the time spent on filtering through resumes, interviewing the candidates, and onboarding or training your new employees. Also, do not forget the cost of job advertisements. A study by Berskin by Deloitte found that it costs an average of £3,000 to fill a position.

Let's take a look at salaries. For ease of calculation, let's you are looking to hire a mid-career marketing professional. Here are the industry standards:

• Digital Marketing Manager: £50,000

• Web Designer: £42,000

• Social Media Manager: £40,000

• Content Writer: £34,000

• Graphic Designer: £32,000

These figures do not include employee benefits and the individual marketing tools and licences you will need to buy. Building an in-house marketing team could cost you upwards of £250,000 a year!

For an agency, the costs will vary according to what your needs are and what is the track record of the agency. More experienced agencies who have been around for a long time will cost you more than newer ones who are looking to take on clients to build their reputation. Remember that new does not mean bad.

As you can see, working with an agency may have a better value once you factor in the cost, the expertise you are going to get and the flexibility of not having a team to manage in-house. However, the long-term benefits of having an in-house team are also great if you are willing to put in a robust training, communications and administration structure.

What should you choose? The good news is you do not have to make an all-or-nothing choice. Many companies outsource certain specific needs that require high-level expertise. A hybrid approach works for many while the others prefer to take either of the two paths. For example, you might want the agency to handle strategy, ideation, and promotion while your in-house team looks at the long-term execution of these strategies.