The decision to Outsource Marketing to a consultant or agency, or to hire staff for marketing is a frequent but critical consideration. Factors include the frequency of specific marketing activities, the availability of talent, and the financial return of either scenario. The latter taking on new urgency within a recessionary environment.
This article will define Outsourced Marketing and staffing, along with the pros and cons of each, and some recommended resources. But first, let’s take a look at how marketing skills are changing.
Marketing Skills are Changing
Today, traditional marketing skills are often secondary in importance in comparison to Digital marketing skills, often requiring marketing technology, or MarTech. In addition, the skills required for managing multiple marketing activities are rarely mastered by an individual, but require a number of specialists.
Consider some of the most common marketing requirements including graphic design, copy writing, web design, search engine optimization (SEO), email, publicity, social media, paid search, advertising, branding, and event marketing. Next, consider that some skills might be required frequently, and others infrequently. Finally, consider that in today’s competitive environment, marketing has become the key determinant of success or failure. As a result, marketing salaries, and outsource marketing costs have increased dramatically.
Outsourced Marketing Defined
Outsourced marketing or outsourcing is hiring an outside firm, agency or consultant to manage and implement a company’s marketing functions. Depending on company size and scale of marketing requirements, you might outsource all marketing, specific projects or a combination thereof. Outsourced marketing is no different that outsourcing accounting, information technology, and other business functions.
Some of the “Pro’s” for outsourced marketing include:
- Access advanced marketing skills and expertise that can be difficult or cost prohibitive to recruit
- Hire expertise for infrequent marketing requirements or singular projects (e.g. websites, branding)
- Outsourcing allows management to focus on core business requirements
- Execute and implement quickly without recruiting, training, supervision, etc.
- Outsourced marketing can be more cost efficient than staffing with multi-discipline skills, lower overhead including salary, benefits, equipment, etc.
- More cost effective for small or startup companies
Some of the “Con’s” of Outsourced Marketing include:
- Lack of technical knowledge in some cases compared to internal staff
- Potentially less responsive than staff marketing for frequent marketing requirements
- Potentially cost prohibitive with some marketing agencies
- Complete or high percentage outsourcing not practical for large, complex enterprises
Staff Marketing Defined
In contrast, hiring staff for marketing refers to the process of having an employee of your company complete a marketing project, or hiring a new employee for an ongoing marketing function. Staffing is common for such business functions as product management, sales, engineering, and administration.
Some of the “Pro’s” of hiring staff for marketing include:
- Likely more cost effective for ongoing or frequent marketing processes
- Possibly deeper technical knowledge and market expertise
- Marketing staff required for large, complex enterprises
- Some (larger) marketing agencies possibly cost prohibitive
Some of the “Con’s” of hiring staff for marketing include:
- Possibly cost prohibitive compared to outsourcing due to need for multi-discipline skills or multiple staff; higher overhead including salary, benefits, equipment, etc.
- Cost inefficient for singular projects or infrequent marketing requirements
- Likely slower implementation with recruiting, training, supervision, etc.
- Not cost effective for small and startup organizations
Outsourced Marketing vs. Staffing – Financial Analysis
Whether to staff or outsource marketing is surely driven by financial analysis based on marketing salaries and agency or consulting fees.
Both marketing salaries and agency fees will be higher in larger metropolitan areas, or on the East and West coasts (lower in smaller metros). Beside geo location, marketing salaries will vary by title and experience, company size, and industry category. A search engine query will return multiple salary averages based on title and geo including Salary.com. Of course, staffing costs should include employee benefits that typically add another 30% or more. In addition, specialized marketing investments in software and marketing technology must be considered for a total identification of Insource overhead.
In comparison, marketing agency and consultant fees are typically based on an hourly rate, and often a monthly retainer which varies greatly by agency size, geographic location, and industry specialization. Hourly agency rates can range from $100 – $300 per hour based on these factors.
Typically a number of marketing activities and functions can be outsourced for a fixed monthly fee or retainer. Similar to hourly rates, retainers vary widely by geographic location and agency size.
Outsourced Marketing More Effective in Recessionary Markets
Every company has unique marketing requirements depending on size, scale of marketing activities, competitive environment, and other factors. Often a combination of staffing and outsourcing are required.
That said, in the new, recessionary environment marketing overhead can be reduced and/or replaced with outsourced marketing, often with greater effectiveness due to the multi-discipline skills required for digital marketing using new marketing technology.
Whether staffing or outsourcing, recruiting marketing talent or selecting effective marketing service providers can be difficult. References will assist either scenario. Industry experience should be considered. Thorough and extensive interviewing will be required. We recommend using a marketing expert to assess staff candidate or outsourced agencies and consultants. In either case, the wrong decision can be costly.