“Should I build an internal marketing department or hire an agency?” A fundamental question that challenges many marketing communications leaders. And, like most things in marketing, the answer can vary and depend on many factors. I’ll discuss some of the high-level advantages and disadvantages of each approach, and what to consider when debating this decision.
The Argument for an In-House Marketing Department
In-depth knowledge. A major advantage of building an in-house department is that your employees will be solely dedicated to your business. As they are immersed in the day-to-day operations of the company, they’ll quickly learn your products, who your customers are, and what industries the company operates in. This is especially important if the company’s products are highly technical or operate in a very niche space. With an agency, the “ramp-up” period can take much longer, and you’ll always be competing for their time and resources amongst their other clients, whom may or may not be related to your company or technology.
Immediate collaboration. Internal marketing staff can work alongside sales, engineering or other key departments in real time. Whereas an agency might be in a different city or even a different state, there’s value in being able to walk down to a colleague’s office and discuss a pressing topic.
Cost over time. This is a big sticking point for most decision makers. There’s no getting around that adding salaries and benefits adds to the company’s overhead costs. However, it can actually be more cost effective in the long term, especially if your marketing needs are consistent. It may make more sense to hire an agency for a one-time campaign, promotion or event, but if your company is consistently producing new marketing materials, agency costs can quickly add up and surpass the cost of several salaried employees.
The Argument for Hiring an Agency
Fresh Perspectives. Have you ever proofread a document several times and still managed to miss a typo? That can happen if you’re fully submersed in an environment for a long period of time.
Agencies are typically unfamiliar with your business. And while educating them may be a process, they’re typically made up entirely of marketing professionals that work with several companies at one time. They can often offer innovative and creative ideas that your employees may not have thought of. The value of an outside perspective should never be underestimated.
Access to Tools. Marketing tools and software can be expensive. Paying for graphic design, video editing, email marketing platforms and more can quickly add up. Whereas a company may need to shoulder the costs themselves, agencies can spread the costs of the tools over many client accounts, potentially making it more cost-effective to use through them.
Scalability. If your business is sensitive to changes in the economy or has fluctuating levels of activity, agency involvement can be fluidly scaled as required. Many agencies work on a per-project basis, so you can more accurately plan for big increases in activity and scale their efforts (and your costs) back when needed.
Why Not Both?
Like many things in marketing, this is not a black and white decision! It is quite common for companies to have a small internal marketing department and outsource specific needs to agencies to handle. For example, a core internal marketing team may set strategies, specify initiatives and provide direction to an agency to pursue on their behalf. Having an internal marketing expert at the agency’s disposal is a great way to ensure agency deliverables are closely aligned with the business’s needs, increasing efficiency and controlling costs. This can also positively impact the internal marketing employees’ job satisfaction, as they can determine what projects they would like to handle themselves or pass to an agency to handle.
There is not a one-size-fits-all approach to determining if hiring an agency is a better decision compared to building an internal marketing department. It’s entirely dependent on your business needs, objectives and cycles.
If you have a highly technical or niche product and want to closely control how the product is promoted or have consistent marketing needs, it may make more sense to have a complete internal marketing department.
If you value innovative ideas, short-term monetary savings and scalability, hiring an agency may make more sense. Carefully consider the multitude of variables before making a decision.
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Meet the Author
Mitch is the Manager of Global Marketing Communications at Eriez, a global manufacturing company headquartered in Erie, Pa. Mitch has nearly 10 years’ experience and is nearing the completion of his M.S. in Integrated Marketing Communications (IMC) with an area of emphasis (AOE) in Management at WVU. He enjoys hiking, riding motorcycles and finding new adventures whenever possible.
Marketing Communications Today is a collection of resources for marketing communications professionals filled with industry research, marketing trends, and career information about integrated marketing and data-driven communications. Learn industry insights through the Marketing Communications Today blog, podcast, as well as Integrate Online.Subscribe to get the Latest Trends in Your Inbox