Should You Hire An Agency Or Marketing Director
Your business needs a better marketing strategy and, more importantly, better execution. But what do you do? Should you hire in-house or a marketing agency? Like many answers, there are dependencies that can determine the best course of action, but we will try and get you as close as we can without getting too deep into the minutia.
Before we begin, let’s establish a little baseline for context. Atomic is an agency. We are going to have some natural bias to choosing an agency. That said, we have all served on the client side at some point in our careers, ranging from day-to-day production to CMO. This experience gives us the perspective to look at this situation objectively and from multiple angles…with that out of the way, we can get started.
Fractional Marketing & CMO
I’m sure there is probably a whole 10,000-word post about this subject, but it isn’t going to happen here today. Straight up, I have not had a good experience with this model. I have witnessed adversarial relationships and “seagull management” (you know…fly in, shit on everything, and fly out). The fractional relationship does not breed the efficiency and productivity I expected. This isn’t to say that it can’t work or that all fractional CMOs are bad. I just haven’t had a good experience…yet.
I think there is a romantic notion that hiring an in-house person or team is going to solve all your marketing problems and be the answer to your Google prayers. And sometimes it is. Let’s start with the upside.
Positive: An In-House Marketing Team is 100% Focused
You have hired them to work strictly for you. They aren’t concerned about anyone’s business but yours! Eight hours a day of total immersion. That is a win.
Positive: Intimate Business Knowledge
The person or team you hire will know everything there is to know about your industry, your business rules, and the way you like your eggs — this helps eliminate a lot of waste and a lot of mistakes.
Positive: Direct Communication
I know the world has changed, and people are scattered all across the place while still being productive members of society, but there is something to be said for having a face-to-face conversation with someone. Walking down the hall and sitting in front of people while you have a discussion is REALLY important. Even if you can’t have this every day, it’s still a huge win to be able to pick up the phone and talk to your team when you need.
The flip side to all of that —
Negative: Recruiting & Hiring Cost
There are real dead costs to recruiting and hiring people. Typically an employee will cost 20% – 25% more than their salary alone. And if they leave, it’s even more expensive to replace them.
Negative: Limited Experience
I can’t say this is always the case, but my experience is that it can be. Hiring an in-house person is often the least expensive option or a personal connection that gets the job. This is often because business owners or those hiring the marketing manager have limited marketing experience. They just don’t know how to evaluate the qualities or experience of the candidate. Usually, the result is hiring the person they like the best or know the best.
Negative: The Smartest Guy in The Room
I have seen this play out A LOT. The person hired to be the in-house marketing director can become a bit of a tyrant. They are the only person in the company with any real marketing experience, and they hold it over everyone else like an executioner’s axe. It can be toxic.
Negative: Myopic POV
This is the flip side to being 100% focused on one company/industry. Creativity can sometimes be stifled without the breadth of knowledge or experience in other industries. What tends to happen is a focus on efficiency and scalability (not necessarily a bad thing), but then belief can set in, and you stop thinking about the problems and opportunities. Of all the negatives, this is the one to worry about the least.
Negative: Your Expectations
When you hire a “marketing expert”, you expect them to know how to do it all…that’s unrealistic. There are so many details involved in each marketing discipline, it is virtually impossible for anyone to know it all, much less be an expert in multiple areas. Best case scenario is that you hire someone who has a thirst for learning and can figure things out on the fly.
Steps to take when you make this choice:
- Make a list of needs
- Hire the most knowledgeable person you can afford
As I mentioned before, there will be some obvious bias here, but I’ll try to be as objective as possible.
Positive: More Cost Effective
Unless you pay way over the odds, hiring a marketing agency is much more cost-effective than hiring in-house. Not only do you get to forego the +20% employee tax, but you are usually getting a team of people for less than the cost of one person. Here is the comparison:
Average Marketing Agency Retainer: ~$5,000/Mo. ($60,000/yr)
Some could pay less, and some could pay more, but it still illustrates the point. While this is a lot of money to invest in a marketing team, let’s look at the value…
- Strategy/Account Manager ($60,000/yr.)
- SEO Specialist ($55,000/yr.)
- Social Marketing Specialist ($55,000/yr.)
- Content Marketing Specialist ($55,000/yr.)
- Paid Ads Specialist ($70,000/yr.)
(These numbers are based on Indeed’s average salaries in Alabama.)
That means the total monthly cost to hire a team like this would be $24,583/month…$5,000 doesn’t sound that expensive anymore. Yes, you can find people with cross-disciplinary experience, but that also would change the cost per person. For the sake of argument, let’s say you can find two people for $85,000 per year each that can cover all the needs of your company…you are still just over $14,000/month. This does not include the cost of benefits, hardware, training, subscriptions or software. (For software alone, we spend over $2,000 per month.)
I can’t speak for all agencies, because there are all shapes and sizes of agencies, so I’ll use our team as an example. We have almost 100 years of combined business and marketing experience. We have worked in over 50 different industries and succeeded or failed to some degree in all of them. That is just not something you are typically going to get when hiring one or two people to an in-house team.
Positive: Cost of Change is Lower
The Society for Human Resource Management (SHRM) reported that, on average, it costs a company 6 to 9 months of an employee’s salary to replace them. An employee making $60,000 annually comes to $30,000 – $45,000 in recruiting and training costs.
While there is a little pain and cost in terms of time and resources to changing agencies, it is nowhere near the cost estimated by SHRM to replace an employee. If you are not getting the results you wanted or expected, it is much easier to start considering new agency options.
Again, the flip side to all of that —
Negative: Other Clients
The cost-benefit of hiring an agency is due to the salaries being spread across multiple clients. While the cost savings are passed down to the client, you can also suffer from a lack of attention.
A key aspect of operating a successful agency is to find a balance between workload and revenue. There is no exact number or ratio of people-to-clients because everyone’s needs are different, but as a place of reference, we try to keep it about 10/1. Which in my experience is low. It sounds effing nuts (because it is), but I know account managers handling over 30 accounts…
Negative: Conflict of Interest
Aside from the attention given to other clients, there is also the possibility that your agency is actively supporting a direct competitor to your business.
I like to expect the best out of people until proven wrong, so I certainly wouldn’t suggest that this is a rampant problem in our industry, but it indeed happens. In my experience, it is more likely to happen when the agency focuses on a specific industry or vertical. Unfortunately, all you can do is ask, and if the agency is already ignoring the moral obligation to act in the best interest of the client…I’m not sure you could expect an honest answer.
Negative: Industry Learning Curves
Unless the agency you are working with has extensive experience in your industry, there will be a learning curve. While I can definitely argue that a fresh perspective can almost always create new opportunities, there is a benefit to having deep industry knowledge.
Negative: Wizard Behind the Curtain
Not that you will know or even understand everything about what your in-house marketing team is doing, but there can be even less transparency when working with an agency. Even with regular meetings, reporting, etc., questions can still exist.
Where Do You Go From Here?
If you are contemplating which path to take, you always want to evaluate risk as part of the decision-making process. That said, your risk and cost will always be lower with an agency.
If you have decided to hire an internal person or team, please consider the following suggestions:
- Prioritize what marketing strategy is important to your business.
- Be specific in the job description.
- For anything below $75,000, don’t ask for more than 2-3 years of experience.
- Don’t ask for combined expertise in SEO, PPC, Email, Social, etc. It is extremely rare.
- Don’t expect someone to possess production and presentation qualities…These typically don’t go hand-in-hand.
How to Choose:
In-house or agency. It doesn’t matter…the following are the main ingredients I recommend for you to consider
- Enthusiasm — This just can’t be taught or learned. You either have it, or you don’t. This may be the most important factor of all.
- Experience — There isn’t a replacement for experience, not just work experience, but life experience. Be interested in where people have been, what they have seen, and what is important to them.
- Expectation Management — If it sounds too good to be true, it is. Guaranteed results are bullshit. Especially in marketing and advertising. If the person sitting in front of you can’t be honest with you in the first meeting…You shouldn’t expect it later.
- Price — Simply put, you will get what you pay for.
- Personality — I can’t stress how important this is. You should be bullish about finding your kind of people. They need to mesh with your personality and your culture.
Whichever path you choose, I genuinely wish you the best of luck. Unlocking the power of marketing can be truly liberating!