IN-HOUSE VS. OUTSOURCING MARKETING. A COMPARISON
Running a small business can be a rewarding journey, but it also comes with a set of unique challenges. As your business grows you need to take a more proactive approach when it comes to marketing. As a business leader, that often comes down to one question. In-house vs. outsourcing marketing. Which is best for my business?
Well, we’ve got the answer to that very question. In this blog, we'll explore the pros and cons of each approach, what are the key considerations you need to make around, cost, resources, and flexibility to help you make an informed decision.
WHY DO SMALL BUSINESSES NEED TO INVEST IN MARKETING?
Before we dive into the in-house vs. outsourcing marketing debate, let's first address why small businesses need to invest in marketing. Marketing is the engine that drives your business forward. It's how you connect with potential customers, build brand awareness, and ultimately generate revenue.
Imagine having a fantastic product or service, but no one knows it exists because you haven't marketed it properly. You may as well have a billboard in the desert.
Although many businesses grow their business through word-of-mouth, there comes a time when you need to grow your business beyond referrals.
Effective marketing helps you stand out in a crowded marketplace, tell your brand's story, and attract the right customers. Without it, your business may remain hidden, no matter how excellent your offerings are.
WHAT CHALLENGES DOES MARKETING SOLVE FOR YOUR SMALL BUSINESS?
Like most businesses, you’ve started yours from the ground up. You’ve defined your offering, why you’re better than the competition, and who would benefit from using your product or service.
However, marketing has always taken a backseat. That can be for a number of reasons such as a lack of time, or limited knowledge or expertise.
As a result, you’ve probably encountered a variety of marketing challenges that has led you to decide you need to invest in your marketing. And, inevitably it has come down to a choice of in-house vs. outsourcing marketing. So let’s explore both of these options.
WHAT IS IN-HOUSE MARKETING?
In-house marketing is the practice of managing your marketing efforts completely within your own organisation. This means that you employ one, or a team, of marketing professionals to take care of all your marketing needs.
This could cover managing your website, managing PPC campaigns, running your social media channel and more. As a result, this team becomes an integral part of your business, working alongside other departments to develop, execute, and drive success you’re your marketing strategies. They are the team that links your products and services to your ideal customers.
WHAT IS OUTSOURCED MARKETING?
Outsourced marketing, on the other hand, involves partnering with external marketing experts or marketing agencies to handle your marketing activities. Instead of having an in-house marketing team, you outsource tasks like social media management, content creation, advertising, and SEO to professionals outside your company.
In some cases, you may leave your entire marketing strategy up to an outsourced provider such as a small business marketing consultant who will develop a bespoke marketing strategy in line with your desired goals and objectives.
COMPARING IN-HOUSE VS. OUTSOURCED MARKETING SIDE BY SIDE
Now that we've defined these terms, let's compare in-house vs. outsourcing marketing side by side to help you determine which is the best fit for your small business.
Cost is a critical factor for small businesses and that’s why it’s number one on the list. Let’s be honest, it’s probably your biggest deciding factor too. When you opt for in-house marketing, you'll need to consider the salaries, benefits, and training costs of hiring a dedicated marketing team. It can be a significant financial commitment, especially when you're just starting out or have a limited marketing budget.
In comparison, outsourced marketing offers a more cost-effective approach. You pay for specific services when you need them without the overhead of maintaining a full-time marketing team. This can free up your budget for other essential aspects of your business.
THE COST OF HIRING AN INTERNAL MARKETING TEAM
Salary is only one consideration when it comes to working out a budget for an in-house marketing team. The reality is, that the true cost can be between 1.5 to 1.75 times more than the salary alone as you have additional costs to factor in including:
National Insurance contributions
Bonuses and other benefits
And that’s not factoring in the cost of recruitment itself. You can use an external provider such as a Recruitment Agency which often charges 20-30% of the final salary or you can do it yourself. Although not as expensive as the outright cost of a recruitment agency, you have to factor in the time to create the adverts, pay to place them, and then review applications and interview candidates. It can all add up.
Let’s have a look at a real-world example.
According to Glassdoor, the average salary for a Marketing Manager in the UK is £44,411 per annum.
ASFB has created a handy calculator to help you work out the true cost for an employee.
In our example, we used a typical 35-hour working week, standard NI class, employer pension contributions of 3%, and a minimum annual holiday allowance of 28 days.
The total cost for our Marketing Manager on an average annual salary of £44,411 was £78,278.20.
This didn’t factor in additional information such as office overheads, equipment, training, or other bonuses and benefits.
And that’s just one employee. Imagine you have an excellent Marketing Manager with years of experience. Even in this case, it’s likely they will need support from other specialist marketers such as a Copywriter, Designer, Web Developer, and/or Marketing Executive to deliver the work.
As you can see, the costs to deliver your basic marketing needs with an in-house marketing team quickly ramps up.
As your business grows, your marketing needs will evolve with it. Whether that’s dealing with one-off, time-sensitive projects, or adapting to the growing needs of the business, in-house marketing teams can be inflexible when it comes to scaling up or down. You may find it challenging to adjust your team's size or expertise quickly.
This is a good challenge to have when times are good – but still one you could deal without – but can be very stressful when times are tough, meaning you may need to consider the dreaded R word…
Outsourced marketing on the other hand provides the flexibility to adapt to your business's changing needs and can help grow your business. You can easily scale up or down your marketing efforts by adding or reducing services with an external agency, ensuring you're always aligned with your business goals.
In-house marketing teams may struggle to keep up with the ever-changing marketing landscape. Staying updated with the latest marketing trends, tools, and technologies can be time-consuming and expensive for small businesses.
Outsourced marketing agencies specialise in staying at the forefront of marketing trends and innovations. They're equipped with the latest knowledge and tools, allowing your business to benefit from their expertise without the need for continuous training and investment internally.
Imagine you are an eComm retailer that needs to prepare for a new product launch or end-of-season sale. Having the necessary team available in-house to cope with these changes in demand can be very challenging for an in-house marketing team to manage.
Running an in-house marketing team demands a significant allocation of your company's resources, including time, office space, and equipment. For small businesses, this can be a strain on your already limited resources.
Whereas outsourced marketing doesn't require you to allocate additional resources within your company. You can focus on your core business operations while experts manage your marketing off-site.
All you need is to request additional support from your outsourced partner and they manage this headache for you, deploying the necessary skilled resource where and when it’s needed.
Alongside this, most marketing teams require a variety of marketing tools to build, manage, and report on their marketing activities.
Although many tools are now SaaS-based and offer flexible pricing structures, these are an additional cost and time constraint to manage. When you outsource your marketing, the agency already has these in place and they come as part and parcel of their marketing services.
Marketing requires a diverse skill set, from content creation and design to data analysis and digital advertising. In-house teams may not always have all the required expertise, which can lead to poor marketing results.
We already discussed the cost implications of full-time employees, but it’s the skillset within your team that can hamper your progress even further.
It’s very rare to find a senior marketer who possesses all the skills necessary to complete all the tasks of a marketing department – let alone having the time to do it all.
Outsourced marketing agencies bring a team of specialists to the table. They've honed their skills in various marketing areas, ensuring that your business benefits from a broad spectrum of expertise. Whether that’s content creation and web development, or SEO and PPC management, marketing agencies have skilled experts who you can utilise as and when needed.
With in-house marketing, you have full control over your marketing efforts. You can direct your team, set priorities, and closely monitor the progress of your marketing campaigns.
You can also manage and build your own processes and work the way you like.
However, outsourced marketing often offers less direct control but can provide valuable insights and third-party perspectives.
Marketing agencies usually have their own SOPs (Standard Operating Procedures) and SLAs (Service-Level Agreements) that they work too. Although there might be a degree of flexibility, they would expect their clients to work with them in this way, giving you less control over how a project or campaign is managed.
THE HYBRID APPROACH
So we’ve explored in-house vs. outsourcing marketing, but there is another concept worth exploring: the hybrid approach.
This approach combines both in-house and outsourced marketing solutions. It's like having the best of both worlds. You can retain control over certain marketing aspects while outsourcing others.
For instance, you might handle the overall strategy, brand marketing, and social media in-house but work with an agency for PPC and SEO. The hybrid approach can be a tailored solution that aligns with your specific business needs.
Although this is very common amongst larger organisations, it may not be the best approach for small businesses where budgets need to be more tightly controlled.
Therefore, if this is the approach you’d prefer, you’d be better off employing a Marketing Manager to oversee your overall day-to-day marketing strategy and reporting and give them the autonomy to manage outsourced marketing specialists as required.
SUMMARY: IN-HOUSE VS. OUTSOURCING MARKETING
Now that we’ve taken a detailed look at how the two approaches compare against each other, let’s review the pros and cons of in-house vs. outsourcing marketing.
PROS AND CONS OF IN-HOUSE MARKETING
Pros of In-House Marketing:
Full control and direct management of marketing efforts
Singularly focused on your brand
Immediate response to changes and adjustments
Build the team you want
Cons of In-House Marketing:
Higher costs with salaries, training, and other benefits
Limited scalability and flexibility
Expertise limitations may affect campaign effectiveness
PROS AND CONS OF OUTSOURCED MARKETING
Pros of Outsourced Marketing:
Cost-effective with no full-time staff overhead
Access to a wide range of marketing services
Flexibility to adapt to your business's changing needs
Expert resources available on tap
Includes tools and talent needed to deliver marketing
Offers fresh perspectives and objective thinking
Cons of Outsourced Marketing:
Less direct control over day-to-day marketing processes
Potential communication challenges with an external agency
The agency needs time to understand your business
No control over the agency personnel you work with
Selecting the right agency is crucial for success
HOW TO CHOOSE IN-HOUSE OR OUTSOURCED MARKETING
So, in-house vs. outsourcing marketing. Which approach is best for your small business? There's no one-size-fits-all answer. It depends on your unique circumstances, budget, goals, and the expertise available within your company.
In-house marketing offers control and immediate responsiveness but can be cost-prohibitive and less flexible. Whereas, outsourced marketing can be more cost-effective and the diverse expertise and resource availability can be extremely valuable for your business but may require you to relinquish some control over process and personnel.
Consider the hybrid approach if you want a customised solution that combines the best of both worlds. However, as mentioned earlier in the blog, this may not be the best approach for a small business just venturing into the marketing arena.
Ultimately, the decision should align with your business's specific needs and long-term goals. If you plan to scale your marketing team in-house and have the necessary budgets to do so, this is your best bet. Otherwise, if you need immediate access to varied expertise at a more cost-effective price point, then outsourcing would be the best place to start.
Remember, marketing is the lifeblood of your small business, and making the right choice can significantly impact your success. If you're unsure about which path to take, don't hesitate to reach out and book a free marketing consultation.
We're here to help you navigate the complex world of marketing and make the right choice for your business's growth.
In-house vs. Outsourcing marketing: it's a decision that can shape your business's future. Choose wisely and watch your small business thrive.