Are you going to hire a marketing agency or are you going to hire in house?
Hiring in house versus hiring an agency obviously, there’s two very different standpoints.
First, is it a matter of cost? Is it a matter of ease? How are we going to quantify the benefits or the negative points of both in order to come to a conclusion and say, “Hey, this is the right step.” It might not be the right set for every industry.
Just based on what situation they potentially are in. I’d like to highlight some main topics that we should consider.
I think the first step is to figure out what stage the business is in. I think this would first determine where the marketing partner’s going to come from and see there. Obviously you hire in house or you outsource? Or you do some sort of hybrid of a combination. Now, being on both sides of the equation, both as an owner of an agency and then working with companies and training people to be able to run the marketing in house. The first extra evaluate where the business is at, just starting off as businesses are trying to grow, trying to scale.
An agency will certainly come with a larger price tag. That price tag can be justified in some situations. You get a lot of resources with an agency, which is why a company would choose to go with an agency. Now again, an agency does not have to be an all in one solution. It could be a paid search agency, it could be an SEO agency, it could be an agency that does SEO, web design and paid search. There’s various combinations of the services and offerings that agencies could offer. However, as long as they’re all digital focus, I think that’s the first step to even entertain a specific agency.
Now if that same agency does TV commercials and they film what videos and they do magazine ads and billboards, that’s probably not the digital focused agency that you’re going to want to work with. How they buy media is on a very different scale. How radio and TV is sold is very different than how Facebook ads and Google ads are sold, so it’s certainly something to consider.
Now, Mike, you made a point and I’d like to go into detail on this subject. You said, “Oh, it’s more expensive to hire an agency.” And so here’s my logic right out of the gate. Even if one is a … I could see the argument even if one is a starting type business, in many cases if you are going to hire a quality professional in house in order to do a particular, you are going to pay a significant price for that and I would argue that in many cases a tailored solution. Again, not running the entire business on their behalf, but doing some really targeted specific things to advance the business in the digital sphere may end up being less expensive than hiring one or two or three of these people in house on a full time basis.
It could be, I think initially the cost is going to be greater on a monthly service basis. I think if you look at it over a 12 month period, potentially hiring in house would be more expensive, but that’s why I believe having a firm understanding of position that the business is in and the actual needs that the business is in to evaluate would be the first thing than anyone’s going to want to consider.
Where agencies can be of value? Say you’re looking for a paid search agency. you’re going to be able to have someone on the team who has a deep understanding of Google analytics and tag management. You’re going to have someone who understands copywriting. You’re going to have someone who understands the actual execution build out daily, weekly, monthly maintenance and benchmarks of how ad performance is going. You’re going to have someone who understands how conversion tracking is working. Sometimes that can be blended into analytics. You’re not going to have to hire four people. Now, most companies could not or would not justify that expense. Enterprise companies, larger companies doing 20 million plus a year, fine.
That’s something that they might want to have in house, especially if they have multiple streams of business depending on the needs and eCommerce stores would likely have more of a need to hire someone in house, but it also depends on the actual maintenance. If you’re a small business and you’re doing well, whatever, a few million dollars a year, there might not be the need or the ability to take on the management of those roles. I mean, if you hire someone in house, who’s going to manage them? Who’s going to hold them accountable? Who’s going to set the strategy? Who’s going to guide them?
Who even knows if they’re capable of filling that role? I mean, Mike, it’s so simple. You don’t want to pay for somebody else’s … First of all, you don’t want to pay for somebody’s learning curve. That’s number one and number two, no matter what somebody would try to convince me, I know as a fact that if you spend some time looking at somebody’s ad account, you’re taking experience and oversight and millions and millions and millions of ad dollars previously spent. I’m sure that you would do a significant 15 minute review of something that might take somebody else hours and hours to do so. There’s a time saving is what I’m trying to say.
There certainly is a time savings. You brought up a couple of good points. I think one advantage of having an agency is that they’re able to incorporate trends in other accounts and be able to aggregate that data and apply that towards your account, if specific bidding strategies are working, if certain types of ad formats are working well in other channels, you get a sort of compound everyone else’s strategy into yours and it will ultimately help you see faster gains. One of the points that you made about not wanting to pay for someone’s learning curve, hiring in house, that’s certainly a very valid point. One thing to be aware of is a lot of agencies get college grads or B listers from other companies and put them into an agency environment and you certainly want to make sure that you vet out the agency and have a clear understanding of who’s actually going to be on your team.
Who’s doing the work, of course. If they’re hiring people that should not be doing that particular role of course that’s a business issue, but from all things being equal and things being done correctly, obviously seems like a bias because I’m an agency owner, but I just don’t see it being, in most cases, a benefit in order to hire in house. I mean, look, just the matter of the statistics are pretty high about businesses in general, not even being able to find the right combination of people. There’s a matter of availability in your particular market, that’s a problem. Lack of skills, period, lack of creativity. I mean these are all things that impact the company’s revenue and continue to be a significant expense over and above the salary alone.
I think it’s also important again to consider what type of business is it in. If you are an eCommerce business, someone’s going to have to not only manage your email, manage your paid search, manage your SEO strategy, any sort of affiliate or referral programs you have. That’s one sort of position. And then, you’re going to have to have someone create the copy. Who’s going to create the copy? Who’s going to create the content that’s going to be able to promote? In many cases that’s more than a full time job to put that on one person is how you either get poor quality work or is how someone’s going to get burned out. Whereas you can work with an agency that same payload is split up amongst X amount of people and you have a team that you can rely on where you have specialties that are your specialists that will focus on key points to driving your business.
Mike I say pretty often as well that look, let’s do the math. Any, let’s say startup or smaller medium sized business that gets into a relationship with an agency, more than likely it’s several thousand dollars per month expense, but before people get too scared by those kinds of numbers, those are kind of basic numbers. That’s the average salary of a starting person that would be answering the phones in your office. I mean it just seems so straightforward to me. If one can justify the expense of that, why wouldn’t you justify the expense of an agency that has that type of skill and has the ability, again, to be tactical, to be specific on what the role is that they fill for you.
I think it’s also very important to understand in this growing stages of many businesses, do they actually have the work to justify someone in house? You can maximize whether you’re looking at at time allowance or you’re looking at a dollar share, what are you actually getting for that? And I think for small businesses they need a little bit of several services, not necessarily one person solely focused on SEO, for example.
We have to talk about what outsourcing marketing to an agency or to consultants really looks like. And I would say certainly alternative approach to hiring in house, I would argue that many, if not most smaller and medium size organizations can benefit if they haven’t already been doing this kind of practice. And it’s something that’s been around for a long time and again it’s about finding the right partners. Without the right partners, nothing’s going to work out but done the right way with strategy, it could be a winning solution.
Sure. So often I’ve seen clients come to us from other agencies or other advisors, if you will, that they’ve been working with in the past and understanding exactly what you’re getting out of an agency … once a business has decided that they want to go with an agency, understanding exactly what they’re going to get from that agency is the first thing that they need to really be able to to define. Because many agencies, often they’ll act as a consultancy or they will advise on specific strategies, but they won’t actually do the implementation. Then that’s relying on the business to actually implement it. If you’re looking for someone to help you out with SEO or email marketing, that’s great. If they outline a plan for you, which they should, but then who’s going to implement it? Are you only paying for the advice or are you actually paying for the work to be completed? And I think often times agencies will come back with a list of things for the client to do and now the client standing here, well, you know, how am I supposed to do it?
I agree with you, Mike. You have to get super clear on what are the deliverables, who’s involved with what and ensure that it’s the right move for you.
This reminds me too of the episode we did not too long ago about the websites and getting clear understanding of the deliverables, but understanding when you hire an agency, what exactly you’re going to get for your money. Who’s going to be on the team? Is it hourly or is it project-based or is there a monthly scope of work that’s defined and who’s defining it and what are those … the actual definition of it, where is it coming from? Is it based on your business goals? Is it based on a generic strategy that may or may not work that the agency just has a template that’s put together? I think these are things that are very important when you’re looking to outsource to an agency because at the end of the day, it’s come back to your business. Your business is relying on it. There’s nothing worse than paying someone to do bad SEO that’s going to negatively affect you because it’s not going to affect the agency. They’re going to be long gone at that point.
I think, Mike, let’s talk about scalability, right? For example, with us, we have clients, we handle a single channel, right? One specific function that we do for them. There’s others where we’re much more involved than its entire marketing strategy that we’re involved with. I like that ability to scale with the business. We can start off at one point and grow together over time and continue to provide value in an ala carte way that makes sense. It’s not just trying to fit a square into a circle so to speak, and not bringing in too much when it’s unnecessary, but also providing that level of service and attention that is over and above, I would say, would get from one individual hired for a specific purpose in house.
I think a lot of companies should want to work towards or have an end goal of hiring in house obviously that would go along with their business scaling. Getting started with an agency will certainly give you a jumpstart into the digital marketing landscape. You can explore a couple of different verticals with people who actually specialize in the digital marketing. You can see exactly what gains traction, so you can then figure out maybe your first hire, your first in house marketing hire is going to be someone to handle social media. If you find that you get very good returns. Meanwhile, the agency can still sort of work in tandem or on some sort of hybrid model where they can still be an arm or a resource to your business even if you want to hire in house. I can think of a few clients that have someone in house to handle some of their marketing or oversee their marketing budgets or marketing channels, but they still need to outsource some of the work to someone who specializes in those fields.
I like the idea too, Mike. An agency can provide a bit of an outside perspective too, right? They’re not day to day spending time in the office. They’re not involved with whatever the office politics are. Whatever the situation is there, it’s a third party, they have your best interest in heart, that’s the whole point of it. The idea being that that outside perspective is a good thing and it gives different view and continue to provide value.
Right, I certainly think you’ve got a lot of value when you’re able to get that outside perspective. You get straightforward, honest opinions that people that don’t necessarily have a financially vested interest in the actual business where they’re going to make decisions based on emotion. You hope that the type of agency you’re working with is basing their recommendations and their strategy based on actual data, based on market trends, based on what’s actually working. There certainly can be a good advantage where don’t forget a lot of industries, you have industry lingo and terms that are used just second language in the actual business itself or in the industry and then you bring in an outside company who might not understand it. They can give perspective on how customers, how clients are actually searching for that business and that will in turn allow your marketing channels to be much more profitable.
We looked at a lot of the major benefits of why you should outsource to an agency. We highlighted some points of why it may be a good idea to hire in house. How do we make a decision?
When you evaluate the stage of your business, if you’re first getting started and you have a small budget, putting it all into one person is probably not the direction you want to go. Getting started with an agency, even if you’re going to spend a little more than what it might cost you to do it in house, you’re going to be able to have a team of people to jumpstart your marketing initiatives. That would probably be the first consideration on the actual stage of the business and what the actual business needs are. If there’s a small operation and there’s not a lot of time to manage people, to outline a strategy, to actually be able to review and benchmark how the progress is coming, that would be another reason to outsource your marketing to an agency.
For those businesses that already have an established team or have been working with a marketing agency for several years and they’re not able to grow or if there’s specific verticals they’re not able to maximize because the agency isn’t able to provide the resources that they need, then the business might want to either consider switching to a different agency or at that point you might want to start hiring in house. Obviously you want the transition to be smooth. You want to make sure that there’s a chain of command for the data and the assets that have been collected over the years and brought in effectively to implement these changes. Whether it’s technical aspects for website SEO, whether it’s an email marketing campaign or a paid search account, you certainly want to make sure that you’re not starting fresh from day one.
And if I would say it from my perspective, Mike, look, here’s how I see it. An agency brings tools, they bring techniques, they bring a skill set. They bring a lot to the table. Again, with some assumptions being taken about who they are and how they operate, but the ideal situation is that we’re bringing skilled, resourceful group of people that can target … Again, you said it yourself. Let’s say we wanted to launch some kind of video campaign. Who’s going to do the creative? Who’s going to do this? Who’s going to do that? Who’s going to set up the ads. It’s most oftentimes more than one person. So having to figure that out on your own as you’ve already said, if it’s an in house person, they might have to be going in outsourcing anyway.
Right? You bring up a good point about the tools. You take a look at our tool stack, we’re paying thousands of dollars a month for tools. Clients are able to benefit from them and they don’t have to pick up the cost of that. Whereas if you hire someone in house and you started looking at your SEO tools, you could easily be in the $600, $700 range just for your SEO tools and he’s given your email marketing and your paid search. These tools all have a cost, but it’s what allows an agency to be able to scale and to be able to handle multiple clients effectively.
Totally agreed. We have to again look to, it can be very costly. Think about salaries. What are you going to do? You’re going to hire a director of marketing for 1000 bucks a month? It’s not going to happen. It’s absolutely not going to happen. Depending on the market you’re in. And what is it? A $150,000 $200,000 who knows how much that is just for one person’s salary. And again, oftentimes that person may be able to orchestrate, but the outsourcing is still necessary. And again, that’s my argument that in most scenarios there can be tremendous benefit if the right agency is found and if the right group of people are coming to the table with their skill set, their tools, and many times companies will see a significant return on their investments.
Absolutely. And whatever agency you work with, certainly you should be able to provide clear numbers on how the performance is going and how you can actually engage your returns.