Should your business build an in-house marketing team or hire an agency? To help make this decision a little easier we compare the pros and cons of forming your own in-house team to outsourcing your marketing efforts.
Early success can be misleading.
If you have a great product and have found the legendary product-market fit, marketing might not even seem necessary. You get a core group of users who love your product and spread the word through their network.
Maybe you’re even lucky enough to get picked up by Product Hunt or TechCrunch. But as the novelty of your product wears off and your growth starts plateauing, you start scrambling together some marketing efforts.
Paul Graham sums up this period of time as the “Trough of Sorrow” in his all-too-accurate Startup Curve depiction:
Most people find themselves in that trough because they start thinking about marketing too late.
Their growth happened naturally at first, and because they didn’t pinpoint the underlying reasons for that growth, their marketing falls short when it matters most.
Defining your marketing needs
Don’t wait until your company stops growing to try to pull together a marketing team. Watch for these red flags so you can take action before you have serious problems.
- You don’t know who your target audience is. If your marketing isn’t targeting a specific market, it’s targeting no one. Before you create any kind of long-term marketing strategy, you need experienced professionals to help you gather customer information, test campaigns, and pinpoint your buyer personas.
- You have low social media engagement. This is a sign that your customers need to feel more connected to your product and how it impacts their lives.
- Your blog traffic is low or isn’t increasing conversions. This means that you’re either not getting enough eyes on the blog or your material isn’t engaging your target audience–or even worse, it’s hitting the wrong audience. An expert in content marketing or an SEO specialist can help you find the right topics and phrasing that will turn readers into paying customers.
- You don’t have enough ideas lined up for marketing campaigns. This means that you and your current employees don’t have the time or the experience to come up with several variations of the copy and design that they can A/B test and optimize.
- Your ads have a low click-through rate. Your ads–whether they’re Google AdWords or Facebook ads–might not be reaching the right audience, or they might be poorly designed. Either way, you’re wasting your money on ineffective ads.
When you’re just starting out, it’s common that your team members will have to wear different hats to cover every aspect of the business. This becomes a problem when every person becomes a jack of all trades, but loses their ability to specialize.
At a certain point, marketing becomes so vital that it requires full-time attention that can’t be divided up among team members with other responsibilities. You need a specialist.
And often, one person isn’t enough to handle the complexities of a successful marketing plan. You need a team of experts who can dedicate time to all of your inbound and outbound marketing efforts: email marketing, web design, ad placement and optimization, SEO and blog management, and social media management.
So, the next obvious question is: do you go with an in-house team or do you outsource?
For most, the decision comes down to cost or convenience. Companies set an arbitrary marketing budget and, if an in-house team seems too expensive or too complicated to manage, they outsource as a temporary solution. This conventional wisdom may seem logical, but it operates under the assumption that having an in-house team is automatically better.
Deciding on an in-house team vs. an agency isn’t just a matter of cost–it’s a matter of fit.
You can decide which is right for you by carefully considering both options and then choosing the best fit for your specific situation.
What to Consider Before Choosing an In-House Marketing Team
If you decide to assemble an in-house team, it’s best to start lean. Choose a few talented, dedicated people and fill in your team’s flat sides later, rather than hire too many people and eventually have to let them go.
There are four crucial roles that every in-house marketing team needs:
- Marketing Manager who’s responsible for the overall marketing strategy. They put together a tactical plan for achieving the long-term visions for the brand, deciding on acquisition channels to prioritize, lead generation strategies, and ways to maximize monetization.
- Content Writer who writes copy for your website, your email campaigns, and, most importantly, your company blog. Only 30% of B2B marketers feel like they’re successful on this front, so hiring an excellent writer will give you a competitive advantage.
- SEO and Analytics Expert who can make sure that you’re getting the most out of your inbound marketing efforts. If you don’t have someone who’s an expert on search, you’ll have killer marketing campaigns and a blog that gets zero traffic.
- Social Media Manager who is responsible for growing your online presence and building a community around your brand.
Because you have to pay each person’s salary, your manpower will inevitably be constrained by your budget.
But even a small in-house team can accomplish a significant amount because they have access to important context: the daily discussions about the company’s strengths, accomplishments and preferences that an outside agency doesn’t hear.
Each marketer can learn from documentation, team members, and other departments so that they’re equipped with as much information as possible about your product.
The Benefits of an In-House Marketing Team
An in-house marketing team has a distinct advantage over any agency: they know your company inside and out.
Here are the ways that having that unique perspective can make an in-house marketing highly effective.
1. Product Expertise
Interfacing with departments builds up an in-house marketer to be an expert on your product and helps them work cohesively with the rest of the team.
Marketers can learn about the history and current trajectory of the roadmap from your support team so they can build a long-term marketing strategy in line with your vision for the company.
They can learn about the nitty-gritty details of how the product works from the development team so that they can market it in a concrete way.
And they can get a sense of the most common frustrations and the most popular features from the customer success team.
They spend 9 hours a day focusing on just the product, and if anything seems off, you can give them feedback and re-align at any time.
If you have a technical product, it can prove difficult to find an agency that really understands what you do. In this case, an in-house team that’s fully immersed in the day-to-day operations is much more likely to create the most effective marketing strategy.
2. Access to the Company’s Culture
We find that sharing what goes on behind the scenes helps us build better relationships with our readers–and we’re not alone. As evidenced by Buffer’s insanely transparent blog, Front’s disclosure of how they raised their Series A, and Wistia’s dancing marketing videos, the best form of marketing is an outward projection of the company culture–something that in-house teams fully understand because they’re immersed in it each day.
Consumers are immune to the marketing gimmicks of the past and look for authenticity in the brands they invest in. Agencies, limited by their outside perspective, often take a long time to really get to know your company culture, and might never really capture the right tone.
An in-house team, on the other hand, doesn’t have to learn about your company’s brand and culture–they live it.
3. Alignment Across All Marketing Efforts
To increase brand awareness and create a genuine connection with your target market, you need alignment across all your marketing efforts. You need your email marketing, web design, and ads to all fit together to work towards one holistic, long-term strategy.
Everything from design assets, to the language surrounding your product, to the messaging on all channels has to be consistent.
An in-house marketing team can communicate and align at any time because every team member is just a shoulder tap away. Daily interactions like weekly meetings and messages in Teamwork Chat help reinforce the underpinnings of your marketing strategy.
If you decide to choose an agency rather than an in-house team, it will be much harder to master this unless you have someone in-house coordinating efforts to make sure that the web design agency, the ad agency, and the content marketing agency you hire are all aligned.
Without some form of coordination, you’ll waste time having to redo campaigns that aren’t reaching your target audience.
What to Consider Before Choosing an Agency
A common misconception about hiring an agency is that it’s all or nothing–you either hire an external marketing team or you don’t.
But most agencies have a particular expertise, whether it’s web design or content marketing.
To get the most out of agency work, you need to decide which marketing efforts you’re going to hire an agency for and which you have the capacity to handle yourself.
Here are the different types of agencies you can choose from:
- Digital marketing agency which specializes in outbound marketing. They handle results-driven, measurable marketing and focus on lead generation, conversions, and maximizing ROI. They’ll work with you to determine your buyer personas and the best avenues to target that persona.
- Content marketing agency which specializes in inbound marketing. While this is an area sometimes covered by digital marketing agencies, it’s better to find an agency who has an expertise here. In a time when “content is king,” and, according to Seth Godin, “content marketing is the only marketing left,” a strong content team is critical.
- Advertising agency which works on exposure for your brand. They find placements on websites, social media, billboards, print, radio, and even TV. They measure ROI on each of their campaigns, then adjust and improve over time.
- PR agency which deals with spreading the word about your brand. They typically have a lot of connections and get your story placed in various media outlets. If you’re still in the early stages of your startup, this type of promotion is not recommended since you don’t have a story to tell yet or the stability to handle too much publicity.
- Design agency which focuses mainly on web design but often includes additional services, such as content management systems and building basic mobile apps.
If you’re an early stage startup and don’t have anyone on your team with marketing experience, a digital marketing agency is a great place to start. They can help you pin down your buyer personas and learn about the most effective marketing channels.
If your team already has some marketing experience, you can outsource a more narrow expertise, such as web design or content marketing, to build on top of what your team has already created.
The Benefits of Using a Marketing Agency
Now that you know how agencies specialize, here are the distinct advantages that come along with outsourcing some or all of your marketing efforts.
1. Marketing Expertise
Marketing agencies work with clients across many different verticals, so they bring a high level of marketing expertise to the table. Because of their exposure to a variety of campaigns, they’re able to suggest experiments that an in-house team might not have been exposed to.
Hiring a marketer for your in-house team can be tricky, so don’t assume that you can recruit top talent and have them stick around for years–jobs in tech have the highest turnover across all industries.
Going with an agency, by contrast, will give you access to several experienced marketers who’ve worked with top-tier companies in your industry, and as long as you pay them, they’re not going anywhere.
If you don’t have experience training and growing in-house staff, hiring an agency can give you a great opportunity to learn about what to expect from a highly-qualified marketing team.
2. External Perspective
Chuck Mascola, growth strategist and president of Mascola Group, strongly advises against keeping all marketing efforts in-house. The core benefit of an external team, he argues, is an outside perspective.
In-house marketers who work on the same product every day often find it difficult to take a step back and objectively evaluate the best and worst aspects of their company and products. They are so entrenched in the day-to-day that they run the risk of losing the ability to see the product from the customer’s perspective and may have trouble generating messaging that properly appeals to them.
A marketing agency can also provide the professional insight your team needs to improve your marketing strategy. Since marketing agencies want to maintain an excellent reputation, they keep a careful eye on the marketplace so they know which strategies are highly successful.
This ongoing interaction with the market gives them more intel on other marketing programs and can help you develop a better-informed and more competitive strategy.
3. Low Cost
Agencies will cost you significantly less than hiring an in-house team. You can expect to either be billed hourly or be put on a retainer, which is basically a pre-paid plan in which you agree to a certain number of deliverables.
Hourly rates, on average, will cost you somewhere between $100 to $200, and a monthly retainer will be anywhere between $1,000 and $3,000. For an in-house team, here’s the minimum cost of hiring just the critical members:
And that doesn’t take into account recruitment, onboarding, and training which can be anywhere from 1.5 to 3 times their annual salary, according to Eric Koester the former venture partner at NextGen Ventures. Looking at the numbers above, an in-house team can be almost 10x the cost of an agency.
Making Your Decision
Acquisition and retention are the lifeblood of your business, so when it comes to choosing whether to outsource your marketing efforts or build an in-house team don’t make your decision based on cost alone.
Investing in marketing is investing in growth–it’s the engine that will ensure that the right people connect with your brand, sign up for your product, and then develop the loyalty that makes them stick around for the long haul.
Carefully compare the pros and cons of each decision to what your team is looking to achieve:
A Goldilocks Team: Have the Best of Both Worlds
If you want to test the waters, you can start with a combination of in-house knowledge and industry expertise.
Hire a marketing director who can get to know your company and your vision for the product, and then outsource most of the execution.
This will allow you to have the best of both worlds.
Your director can interface with the rest of your team to come up with your high-level marketing strategy, and then an agency can bring that outside perspective but also take over the more time-consuming tactical stuff, such as putting together email campaigns, running and managing a blog, and creating ads.
As a result, you can slowly grow your in-house marketing team over time without compromising your marketing strategy.
Still feeling indecisive? Take our short quiz below.