Agency vs. In-House Marketing Department
Should you be using an agency or creating and expanding your internal marketing team?
The easy answer is, ‘it depends’. There are compelling reasons for both, and it depends on your current situation and your business goals.
There are several considerations to examine prior to heading down one path or the other. Looking into the pros and cons of each can help you make a well-informed decision.
The first step is to establish a budget for your marketing efforts. This budget can be applied to your in-house team or used if you engage with an agency.
If you’ve never established a marketing budget, you may want to use these percentages of gross revenue from a recent Gartner survey.
In terms of overall marketing spend, digital continues to dominate. In that same Gartner survey, “CMOs surveyed are dedicating 72.2% in pure digital marketing channels, realizing that even traditional channels include digital elements creating an integrated hybrid mix. “
Percentage of Revenue Allocated to Marketing
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You can determine your budget based on the above percentages and keep in mind if you are a new business, you might want to be a bit more aggressive and commit to a higher percentage. The same holds true if you are in a very competitive space.
In-house vs Agency Comparison
Think through the following pros and cons ad you think through your decision.
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Let’s take a little closer look at budgets. As mentioned above, the first step is to determine your overall budget.
Agency cost formula:
- Time spent recruiting and vetting process
- Agency fees
- Ad and media spending commission
- Communication and project management
In-House cost formula:
- Time spent in the recruiting process
- Time spent training and managing the team
- In-House overhead including office space and equipment
- Marketing tools and subscriptions
- Full time salaries
How much will it cost you to build out your internal team?
Use the following tools to help you establish a budget for an in-house team versus allocating your budget to an agency. Use the following tools to help you establish a budget for an in-house team versus allocating your budget to an agency. We used GlassDoor to determine the salaries by role.
In House Agency
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This comparison of in-house vs marketing agencies illustrates some of the main considerations. Hopefully this information puts you closer to making a decision. You might also want consider a couple more options.
There are two more options.
Get the best of both worlds and build your in-house team while working with and agency. Build up and train your team while using an agency where you have skills gaps and lack expertise. This hybrid model also offers scalability as you can use agency resources while you recruit and hire additional team members.
You can work with a marketing consultant that can step in and help you get the most out of your agency and/or in-house teams. The consultant can help you highlight skills gaps, help you recruit the right talent for your in-house team. On the agency side your consultant can vet their scope of work, their deliverables and help guide you through communications and interactions with your agency.
If you do work with an agency these are some of their responsibilities they should:
- Present you with a detailed scope of work so you can fully understand their deliverables and deadlines.
- Help you understand the ‘why’ behind all of their activities.
- ‘Teach’ you as you collaborate with them.
- Communicate with you on a regular and frequent basis
- Do the right thing.
You have some responsibilities as a client as well You should:
- Inspect what you expect. Keep asking questions until you totally understand tactics and deliverables.
- Hold the agency accountable for all the work detailed in their scope of work.
- Communicate on a frequent basis and let them know what you like and what needs to be improved.