In-house vs outsourced marketing – which is a better fit for your company?

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If you’re reading this article, chances are you have contemplated between beefing up your in-house marketing team or outsourcing it to an agency.

A common dilemma for many Chief Marketing Officers, we hope this article can shed some light on the key factors to consider before you make a decision.

A 2017 report by eMarketer demonstrated that 52 percent of respondents use a mix of outsourced and in-house marketing resources, 43 percent outsource their strategies and only five percent rely strictly on in-house resources to manage their data.

Defining in-house and outsourced marketing

Before we dive in, let’s first understand the difference between in-house and outsourced marketing.

The former is comprised of employees who work exclusively for your company. You will bear the responsibility of hiring and building your own team, usually made up of a marketing manager, social media manager, SEO and analytics expert. You will also scale the team as and when the need arises according to the organization’s capacity.

On the other hand, a marketing agency is made up of experts with specialized knowledge in various areas spanning across digital, content, social media, PR and design. They are usually commissioned to an organization on a retainer basis and will be juggling multiple clients at any given time.

Whether you choose the spéciale du jour, order a la carte or opt for the combo platter, today’s marketing menu has something for everyone. One essential thing to note – there is no one-size-fits-all strategy when it comes to this!

Photo Credit: Pexels

Some considerations to take into account:

1. Time

It’s been said that an idea or inspiration is like a wave. When it swells, you must ride. This translates into being able to brainstorm, bounce ideas and arrange meetings with your internal marketing team at short notice.

Having an in-house team would mean you can call for an urgent meeting from just across the hallway at any time and check in on the process regularly, especially when you’re running multiple projects or on a tight deadline.

However, one of the biggest challenges is finding the right candidates for the role. The onboarding and training process can be a time-consuming process, a luxury which some organizations may not be able to afford.

Besides that, beware the consequences of a bad hire, as it could be detrimental to your organization. According to CareerBuilder’s survey, the average cost of one bad hire is nearly US$15,000.

With an agency, it will be challenging to expect 100 percent full dedication and devotion to your organization’s needs as you will be one of the several clients they have to split their time with.

2. Fresh perspectives

In-house teams will find it easy to suffer from tunnel-vision after working with the organization for a period of time. Difficulty in thinking out of the box and conceiving new ideas are commonplace – as such, most marketing campaigns end up singing the same tune.

More often than not, agencies are seasoned experts who have the breadth and depth of knowledge serving multiple clients across varied industries. They are able to bring their marketing prowess to the table by blending their expertise and offering unique perspectives to the client.

With exposure to different clients, agencies are also more likely to replicate past successes to achieve your marketing KPIs.

3. Cost

When considering the costs for marketing in-house vs outsourcing, it should not simply be weighed in terms of dollars and cents, but also intangible costs such as time and effort.

According to PayScale, the national average base salary for a marketing manager in Singapore is US$50,708 per annum. In addition, companies would need to consider ongoing miscellaneous costs such as recruitment, training, benefits, and compensation.

By choosing the in-house route, you either tend to hire more members, each with a specific skill set, or a team of generalists with a breadth of skills. Either way, the cost of hiring a team of full-timers is likely to exceed that of outsourcing to an agency, where you get a team of experienced experts at a fraction of the cost.

If you pick the agency route, it is also important to consider the challenges which come with deciding which firm to engage, based on the services you may need and your budget.

Photo Credit: Pexels

4. Access to the latest technology

The digital marketing landscape is fast-moving and most in-house teams tend to lose out on being at the pulse of the next technology advancement or algorithm update. They typically take a longer time to catch up compared to their agency peers, as a significant amount of time and resources have to be devoted to upskilling the team.

On the other hand, agencies are constantly kept on their toes, having to be abreast with the latest marketing practices and software to acquire and retain clients.

5. Understanding of company

One of the biggest plus of having an in-house marketing team is the familiarity and alignment with the company’s product offerings, culture, vision and mission.

The depth of an employee’s understanding of the organization, competitors, as well as internal processes gives in-house marketing teams an edge over outsourced manpower.

While agencies may possess better technical skills in executing marketing campaigns, it is a myth to believe that they would have sufficient contextual knowledge of the particular business your organization is involved in compared to an in-house marketing team.

This gives rise to a higher potential for friction since more time is spent on aligning the agency with your company or campaign needs.

Let’s recap: In-house vs Agency

A quick overview of the factors to consider when you’re deciding between hiring an in-house marketing team and outsourcing to an agency:

Besides in-house or agency, is there a third alternative available?

Fortunately for CMOs, the good news is that a blend of both in-house and outsourced marketing is entirely possible.

What are we talking about?

Co-sourcing marketing, which is the sweet spot between both worlds. This is when a company hires in-house marketers and a marketing firm, and both entities work together collaboratively to maximize performance and flexibility.

Typically, this hybrid strategy involves retaining the brains (strategy by the in-house marketing manager) and outsourcing the hands and feet (content and execution by the agency). Especially for startups and SMEs with limited resources, this hybrid approach is usually characterized as being the most cost-effective option.

The primary advantage of co-sourcing is that your organization retains control over the marketing assets and there is a greater capacity to adapt to the business’s ever-evolving marketing needs.

A challenge to consider is that there might be more coordination efforts required, as the marketing manager would have to manage two separate teams.

Over to you: in-house, outsource or co-source?

While there are pros and cons for each option, ultimately, your decision will depend on your priorities.

With these key considerations to mull over, we hope you are able to make a more informed decision between choosing in-house, agency, or using a hybrid strategy to co-source your marketing strategies.

Converted from Singapore dollars. Rate: US$1 = S$1.37

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