To Build or Buy? In-House Marketing Vs Agency Partnerships
By Ryan Parlee
You’re reading an agency blog so you may assume that I’m going to say that agencies are keys to success and you can’t manage to have in-house marketing agency. Well, the honest truth is that you can do it yourself. There are pros and cons to both approaches. I’ll start off by saying that I’ve been part of both solutions and I think, over time, the lines have blurred. In today’s digital landscape, however, the evolving relationship between clients and agencies is becoming more defined.
In this article, I will discuss the strengths and weaknesses to both approaches so you can better determine how to reach your business goals.
Advantages In-House Marketing Agencies
Scale Advantage
Larger organizations that I have been part of may have a large website to manage/develop as well as many internal projects happening at one time. Having in-house marketing team to tackle all of these projects can be a cost-efficient way to get all of your projects done without paying for tons of agency hours. If you are a smaller business however, it is likely you don’t have the same cost advantage. It really comes down to the size of your marketing team and the amount of work that needs to be done — it’s a delicate balancing act.
Industry Awareness
An in-house marketing team is likely to know your industry better. As an agency, we work hard to understand the industries that our clients operate inside of, but we can’t know everything that someone who is entirely focused on that industry knows. For example, if you work in the fashion industry, you may have a better grasp on what happens day to day and a richer understanding of the industry insiders.
Internal Processes
In-house marketing managers also understand the internal processes and organizational structure within the company and therefore should be able to use that knowledge to get things done in an efficient way.
In-House Weaknesses
The Island Effect
One of the weaknesses of an in-house marketing team is they can sometimes be out of touch with the latest changes in the digital marketing landscape. The isolation of working within one company — or even within just one industry — makes it difficult to always have a finger on the larger landscape as it evolves.
Another manifestation of what I am calling the “island effect” is a lack of outside perspective. One of the biggest advantages of working with an agency is simply having more people involved in a project — more thoughts, more perspectives, and more ideas.
The Talent Gap
Most companies hire marketing staff for their specialized skill sets. It’s nearly impossible to find one or two employees who can tackle all of the projects in the ever-complex marketing landscape. Your staff needs to be masters of content development, design, brand development, media buying, SEO, PPC, research… I think you get the point.
Agencies offer a team of specialized staff who all have unique skills that can be combined into a comprehensive strategy and solution. To create a comparable in-house team, you’d need to hire as many as 10 or 12 staff members with various specialized skill sets. This isn’t feasible for many small- and medium-sized businesses.
Agency Advantages
Efficiency
When hiring a digital agency, the biggest advantage is efficiency. Agencies have applied similar strategies many times (practice, practice, practice) and know the most efficient way from point A to point B. A good agency partner will have a process figured out that works well for your business and be able to produce consistent results.
Experience
With an agency solution, you are able to take advantage of the experience and knowledge of a staff that lives and breathes marketing — remember that these people are 100% dedicated to providing the best marketing solutions. They’re in the trenches, so to speak, day in and day out. This means they not only have succeeded on similar projects in the past but they know the pulse of the industry and are constantly adapting to the changing environment.
Collaboration
Two minds are better than one. And, 10 minds are better than two. Agencies have many people with experience and expertise in specialized digital marketing disciplines who can work together as a team, collaborate, iterate, and brainstorm new ideas and strategies.
Agency Weaknesses
Lack of Industry Knowledge
The primary weakness of an agency is that they simply can’t know everything about every industry. In most cases, this doesn’t present a huge problem. Usually, understanding the landscape is enough to develop effective strategies based on customer profiles — especially for consumer-focused brands. But, some industries are more complex than others. In the case of the most-complex industries, it may be more advantageous to hire a specialized, in-house staff to focus all of their attention on navigating the business.
Hourly Costs
From a strictly dollars and cents perspective, companies benefit financially from working with an agency when they have enough work to hire a partner to handle marketing, but not enough work to warrant a staff of 2 or 3 team members to do it in-house.
In order for this math to work out, the amount of work that’s done at the agency’s hourly rate needs to be less than or equal to the total costs associated with hiring an in-house staff to complete the work. (We certainly don’t advise a “cost only” approach — it’s important to consider the other points from above, and things like quality of work, creativity, and administrative hurdles with doing things in-house.)
The big question is: At what point does it make sense to go one way or the other?
Unfortunately, there is no easy answer because it’s going to depend on your specific situation, budget, and needs.
If you’re a small- or medium-sized business it may not make sense to hire in-house. It simply won’t be cost-effective to hire an entire team to do work that could be handled by an agency.
For larger organizations, it’s going to depend on the quality of the talent you are able to hire vs the quality processes and people that the agency has developed. Even for bigger companies, it may make sense to work with a small, internal marketing team that handles day-to-day operations and outsource creative, production, or strategy to an agency if it makes the best use of the skills you have on staff.
No solution is right for every business. Hopefully the above points are able help guide you towards a solution that fits your business goals and objectives.
Top image by Flickr user koolb.
