Since the heyday of MadMen, the age-old question is should you hire an outside agency or bring marketing in-house?
On the face of it, outside agencies offer expertise and they may seem expensive. But are they really? And how easy is it to translate your business objectives into marketing performance with the help of an outside agency?
As with most business decisions, it depends on the unique situation of your business. Factors to consider are your company’s life cycle and how fast you want to your digital marketing to scale.
Companies evaluate the investment of time, cost and resources for hiring an in-house marketing team, then they weigh intangibles like the headaches of onboarding and training a team.
Let’s weigh some of the advantages of bringing digital marketing in-house versus hiring an outside agency and what might be the right fit for your company.
The Pros of Bringing Digital Marketing In-house
1. Changes the Company Culture
Digital marketers are a change agent. For any digital marketing program to succeed from inside an organization, the CMO needs to have a seat at the table. A voice in the decision-making process is important as you need contribution from various stakeholders across departments in an organization.
Essentially, different teams start contributing to a common cause when they understand the importance of digital marketing. This requires a kind of a culture change where digital marketing is inserted into the existing processes of the company.
An in-house marketer needs to put this agenda forward to act as a change agent. This change is brought about by being transparent with your marketing process, expected deliverables, revenue forecast, and how you plan to grow the business. Combine these with continuous education and you can sow the seeds of change as an in-house digital marketer.
2. Fosters a Sense of Ownership and Build Internal Capability
While the ramp up time might be a little slower with hiring an in-house team, the sense of ownership toward your business is greater.
No offense to my agency friends here, but an in-house marketing team scores higher when it comes to ownership of work. This sense of ownership stems from working toward a common cause, aligning with top-level business goals, and an overall feeling of esprit de corps.
These are the intangibles of an in-house marketing model but definitely one of the pros for bringing digital marketing in-house. When your internal team is close to the business and overall direction of the company, you’ll discover many new hidden digital marketing opportunities.
3. Retains Employees as They Learn New Skills
Hiring good marketers is tough, no matter what size your organization. That makes employee retention all the more critical.
Marketers, in general, look for challenging assignments. Bringing this function in-house provides an opportunity for employees to develop new skills.
The skills you develop when managing a Digital Marketing program in-house are vastly different as opposed to managing a “project” when working with an outside agency. Employees love a challenge that keeps them engaged with your company. It’s also a great way to recruit and promote employees internally.
4. Encourages Collaboration Across Groups
Collaboration is often used as a cliché, which to some means simply not taking ownership. Real collaboration means getting everyone involved in a cause and excited about pitching in with ideas to solve business problems.
Digital Marketing collaboration means training different groups on digital marketing strategies and tactics and communicating with people from across departments to move your initiatives forward. Even though I’ve listed collaboration as the last point of this section, it’s often the most critical piece that determines the success of your in-house digital marketing program.
The Advantages of Hiring a Digital Marketing Agency
1. Unparalleled Outside Expertise
Time and again you will encounter some major challenges and may need outside expertise. Those times when you feel alone or need support are when an outside consultant or a project-based agency partner can help. An outside expert can help you solve or approach a problem differently. Just because you are in-house does not mean you don’t need outside help.
The other reason (a bit political) is sometimes management will easily accept an outside consultant’s recommendation just because of the authority that comes with being a consultant. After all, you’re paying them to make recommendations so you’re better off listening to them. And for an in-house team sometimes that could be a good political win as well.
2. Get More Done for Less
HIring a Digital Marketing agency offers economies of scale, as small, nimble creative teams can produce a lot of work quickly at a low cost. All kinds of different personnel are required to fill out an in-house team, so a small team may rely on outside help. Companies can’t always justify full head counts so leaning on the talents of an agency can help round out the team.
In a downturn, hiring outside is more beneficial with less cost than hiring internal employees.
Creating content and other digital marketing strategies like social media and email campaigns are time and resource intensive and are often not the most preferred part of an in-house marketing team. Plus, it’s tough to justify the additional headcount just to build and create.
This is where an in-house team may need to look for outside help. Many companies find using an agency that they can trust to outsource some work is a smart part of their digital marketing strategy.
3. Avoid Knowledge Decay
The problem of knowledge decay is very real and all in-housers can experience this when working inside the sanctums of a “walled garden.” The effects of knowledge decay can happen over time, especially when working with the same website and business challenges.
Agencies typically work with multiple clients who are often spread in different industries. This helps agencies stay fresh with new ideas. They also keep up with industry trends and many of them are at the forefront of knowledge and are sought-after speakers, authors and experts. That level of talent is almost impossible to hire if you are building in-house team.
The workaround is sending your team to conferences, attending online training, webinars, and local meetup events. Sometimes, bringing an outside expert for training or to work on projects with your team also can help alleviate this problem. As mentioned earlier, have a plan for continuous digital marketing learning and development and turn to an expert when you need fresh ideas.
4. Less Trial & Error and More Results
Many in-house teams sometimes end up throwing darts in the air with the hopes that one or two will end up working. What this does is create a lot of waste in terms of both marketing dollars and time lost which is an opportunity cost.
Agencies more or less know what has worked in the past for their other clients and so they can hit the ground running and work on launching only those campaigns that they know will work. This way the question ends up not which digital marketing tactic might work, but how can we better optimize tactics for a higher ROI on digital campaigns.
5. A Ready-made Digital Marketing Best Practices Playbook
With agencies, you do not have reinvent the wheel as they have a set of best practices for digital marketing that they know has worked elsewhere. This goes across the board including which are the best technology platforms to choose, the best practices for search, branding and design, and so on. Think about it – as clients you get the benefit of the agencies year’s worth of best practices and experience that can be compressed in a few month’s time. This in itself is worth its weight in gold.
6. Hiring an Agency Cost Less
On the face of it, monthly agency retainer fees might seem like a lot, but when you dissect the monthly fees, most companies find out that hiring outside for digital marketing is more cost effective than hiring an army for an in-house team. Plus, your agency is not on your payroll so there are the added cost savings of no payroll taxes, benefits and others.
Additionally, if for some reason the agency is not driving results, then you can easily switch without any severance pay of sorts. Plus, your agency will bring lots of experts to work on your account, depending on your size, so they are the ones that have to deal with hiring, payroll taxes, etc.
Many companies opt to hire an in-house CMO or a small marketing team who works in-house and then supplements it with an outside team. This way internal costs are kept down while some employees are engaged with company leaders on a daily basis.
Hopefully, the above points can help you evaluate whether to hire an agency, bring digital marketing in-house or formulate a hybrid of the two. These are just some points from my experience, but I’d love to hear from you about your preferences with working with in-house teams or agencies. Call me at 415-949-2406 and let’s talk.