27 Aug IN HOUSE VS MARKETING AGENCY: WHAT YOU NEED TO CONSIDER

It’s the age-old debate for many growing businesses. Do you hire internally or use a marketing agency? To clarify the distinction: Inhouse marketing involves employees on your company’s payroll, whilst agencies provide specialists for hire. Note that there’s no right or wrong answer here, your direction depends on who can best deliver against a variety of factors relating to your business, including current trends and pitfalls. It’s also entirely possible to get the best of both worlds!

Here are the critical factors you should be considering, and how the two solutions compare:

1. SKILLS: THE ABILITY TO GET THE JOB DONE RIGHT

Inhouse

• Inhouse employees have been carefully vetted and chosen by your business, and they are paid to live and breathe your brand.
• Finding an inhouse marketer who is proficient in all aspects of digital marketing is rare. And even if you do, the work might be too much for one person or a small group of people to manage.
• It takes time to interview multiple rounds of candidates, add to that induction, basic training and the time it takes to become accustomed to your tools and processes. Then add the fact that they could leave at any given moment.

Agency

• You have a bigger diversity of skill sets to choose from. This doesn’t mean the skills are more developed, just that there’s lots more skilled individuals on hand.
• Even if you choose an agency with whom your industry has a good track record, you will still need to bring them up to speed with your brand and business objectives.
• Research and pitching need to be done on your end to find an agency that works best for your timeline and set goals. In order to get the results you want, you may end up having to work with multiple boutique agencies rather than one all-encompassing one.

Verdict

If you can afford to hire a multitude of people with different skill sets – and you can keep them all busy – then the inhouse route will make the most sense. The same goes if you only need one aspect managed that can easily be handled by a single employee. If, however, you are looking to develop a complete, top-to-bottom marketing strategy, an agency would be the best choice. It really depends entirely on your business.

2. CREATIVITY: DEVELOPING ORIGINAL IDEAS

Inhouse

• Inhouse marketers have a deep understanding of your competition.
• Given that marketers are naturally creative and drawn to diversity, being solely devoted to one project could lead to stagnation.

Agency

• Because agency marketers typically work on several unique client accounts on a daily basis, it exposes them to a variety of different industries and keeps their minds fresh and sharp.
• You run the risk of a conflict of interest in the event where an agency has similar clients that are in direct competition to your business.

Verdict

An agency would be the way to go if you notice your inhouse team is in a rut, or if the campaign you are looking to develop is not aligned to their skill set.

3. ADAPTABILITY & GROWTH: KEEPING UP WITH CHANGING TRENDS AND DISCIPLINES

Inhouse

• Inhouse staff can be reached instantly for quick communication.
• Your team can drop anything else they’re working on, to give high priority tasks urgent attention.
• Internal teams can become overburdened if given too many urgent tasks at once.

Agency

• You comparatively get 3-5 knowledgeable heads for the price of 1 when hiring an agency.
• As mentioned, due to their outside perspective, agency staff tend to be on the cutting edge of digital marketing and thrive off getting results.
• Agencies can’t always get back to you as quickly as you’d like – you have to wait your turn on their roster.
• No direct contact can also slow things down, as task coordination usually happens between representatives of each party to ensure effective communication and flow.

Verdict

Define which is more important to your project/campaign. If its nature is ever-shifting, requiring quick and constant feedback, then consider going with a team that you pay to have on-hand. If budget is the driving factor, then it makes sense to invest it in such a way that you have access to the best minds who can adapt to industry change while keeping you informed of the latest events.

4. COST & ROI: HOW MUCH CAN BE SAVED/GAINED

Inhouse

• Your marketing needs will dictate the cost of each campaign. So, crunch your numbers before deciding. For example, a highly competent in-house team could run up the following costs:
• Marketing Manager R78 000.00 p/m
• Senior Graphic Designer R24 000.00 p/m
• Senior Copywriter R50 000.00 p/m
• Video Animator R55 000.00 p/m
• Website Manager R30 000.00 p/m

TOTAL COST:  R237 000.00 p/m

So, take these numbers into consideration when hiring one manager, or multiple marketing specialists full time. Click here for a full 2018 salary survey completed by Ad Talent.

• It may seem more cost-effective to hire a single, on-hand employee for your marketing strategy, but bank on the long hiring and training process required to guarantee that the person fits in long-term (plus the lack of guarantee that they’ll stay!).
• Aside from salary, you will also need to budget for added benefits and things like office space and tools required for the job (computer, software etc.).
• Inhouse staff can become comfortable or lack necessary skills, especially in larger teams where it’s not always feasible to pin accountability on one person per project, resulting in reduced ROI. 

Agency

• When you hire an agency, you can say goodbye to all the costs involved with hiring multiple full-time professionals, and hello to a pre-packaged team who work on straight-forward, pre-negotiated payment terms, and are on call as-and-when you need them.
• You don’t have to deal with the absence of talent due to people taking sick days… or moving on to other jobs!
• An agency pays for its own software, tools, tech, and training, which cuts any extra costs on your end.
• Choosing this method means you only pay for the time and/or the project in hand, whereas full-time employees still need to get paid even when there’s not much for them to do, or when they underperform.
• (Good) agency teams are naturally driven to perform in a given timeframe – their reputation and longevity in the industry depends on it, and they therefore have a vested interest in it.

Verdict

While hiring an agency may seem more expensive, we’ve illustrated that “hidden” employee costs can escalate quickly – you can safely bet on adding approximately 50% cost allowance to salaries! As always, it boils down to your goals and the skills you require, but worst-case scenario – cutting an agency due to the inability to complete the project – is far easier than having to fire an employee because you can no longer afford his or her salary.

The rule of thumb is that whatever you invest, should pay for itself (at least twice). You can use this formula to quickly calculate marketing ROI as a percentage:

Gross Profit – Marketing Investment Marketing Investment.

To translate this into numbers, let’s say for example:

You produce R500 000.00 worth of sales as a direct result of a marketing campaign

You spent R250 000.00 for an agency to produce these results

Your ROI = (R500 000.00 – R250 000.00) / R250 000.00 = R1.00

I.E. for every R1.00 spent you gained R1.00

1 X 100 = 100% (POSITIVE) ROI

Whatever you decide, always make attributable, bottom line ROI the basis of every move!

5. COMMUNICATION, WORKFLOW & CULTURE

The need for solid communication applies to the agency and the in-house marketing team, and sadly both show staggering shortcomings – although when hiring an agency there is greater room for error due to lack of mutual effort, understanding and correspondence.

We therefore recommend you ask your staff the following questions before considering any hire:

• How much does your company value honest communication?
• Does every member in your employ have a sense of purpose?
• Is the leadership in your company inspiring, and is it absorbed?
• Is there / will there always be a shared amount of essential marketing work to complete, or is it/will it be fleeting, sporadic and/or rushed due to deadlines? Are there clear processes in place?
• How effective/efficient are your current channels of internal communication across all team members and projects?
• Do your staff know what’s coming?

If communication isn’t an issue in your business, and marketing tasks are rushed, fleeting and sporadic – then hiring a digital marketing agency ‘when you need them’ is absolutely the right way to go.

Culture on the other hand is one of the most powerful arguments to go in-house. If your organisation has a strong sense of culture, it’s going to be hard to find an agency that matches the exact same passion, empathy and values. And even if you do, agency staff aren’t yours – they haven’t been nurtured to become devoted brand ambassadors that will go the extra mile for you.

Verdict

Agencies are the perfect choice for relieving time-sensitive marketing pressures – when they are on the same page as your brand. In the opposite corner, nothing shines brighter than a 100% focused, dedicated, communicative and motivated inhouse team.

Conclusion

All things considered, the argument definitely leans stronger in favour of the marketing agency – just be sure to take your time to find the right one for the job. And as we stated in the opening of this piece – there is no reason why you can’t have a combination of both.

Break down your goals, assess your needs and communicate with your existing team. Establish their skill set and outsource when you need fresher ideas. One such “hybrid” approach could involve permanently employing a Digital Marketing Strategist, while hiring a digital agency to support, deploy and maintain his or her projects.

Then, outsource tasks such as blog writing to freelancers, to keep costs down. The old “full-service” agency model is rapidly being phased out anyway, so there’s nothing to stop you from hiring specialist, multiple agencies for project-based work.

More information

For an obligation-free consultation to determine which combination of resources will deliver your business’ marketing, advertising and communication objectives most optimally and cost-effectively, feel free to call BWD Advertising on (011) 321 0193 or email bongani@bwdadvertising.co.za.