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The In-House vs. Agency Marketing Debate: Factors to Help You Decide

Posted by Cathy Boudreau on Sep 10, 2020

Your technology startup is at a crucial phase in its life. It’s raised a significant amount of venture capital funding over one or two rounds, and within the next few months, the engineering team will have a product ready for customers. In fact, your company already has a couple of beta customers working with the initial build.

So, it’s time to start thinking about the marketing engine, and the first big question you’ll need to answer is: is it best to rent or own? In other words, should you hire an internal marketing team or go with an agency?

Obviously, we think there are a lot of advantages to working with an agency, but we also recognize that outsourcing every marketing function isn’t always the best choice for every tech company. What’s more, the choice doesn’t necessarily have to be one or the other — sometimes a mix of internal and external resources is the best structure to get the job done.

To help you decide what’s best for your organization, we’ve put together some questions to ask yourself, along with some discussion about how your answers can help inform your decision.

What kind of skills do you require?

Marketing is a multi-faceted function that requires a team with a broad range of skills: media relations, marketing strategy, design, content marketing, social media marketing, SEO and analytics, product marketing, messaging … I could go on, but you get the idea. No single individual will have expertise and experience in all of these areas, and, even if they did, the scope of work is so broad, you’ll still need multiple people to get it all done.

If you decide to hire a team, make sure you start the process early, because it’s going to take a lot of time and effort to get the right people on board. Once you do, however, they’ll be laser-focused on your industry and your company’s specific niche. 

Marketing agencies, on the other hand, already possess a wide range of marketing skills that are ready to be applied to your business, so you won't be on the hook to onboard and manage a large team. Additionally, if you need specific marketing skills for a short period of time or irregular intervals, with an agency, they’ll be available without the need to make a long-term commitment to an employee. And while a bigger, more general-purpose marketing agency might not possess the industry domain expertise you’re looking for, there are plenty of smaller, boutique-style agencies that are tightly focused on specific sectors, from enterprise technology to biotech and consumer goods. 

We often find that a mix of in-house talent and agency personnel works well. Typically, the tech company will have a CMO or VP of marketing in place who sets the direction, along with another marketing resource or two who focus on product marketing, social media or some other function that the organization wants to keep in house. The marketing agency then fills in the gaps, helping to guide the marketing strategy and then execute.

What’s your budget?

Conventional wisdom holds that it’s ultimately more expensive to hire an agency than it is to hire an internal team, but that’s not always the case, especially if you work with a boutique firm. The average salary for a marketing manager is about $65,000, for instance, and that figure doesn’t include the cost of benefits or training. What’s more, you’ll need to buy subscriptions and / or licenses for marketing management and automation. If you hire a four or five person team, you could easily spend $250,000 to $300,000 annually on salary, benefits and software alone.

The cost of an agency will vary, of course, depending on the services you require, but $6,000 - $12,000 per month is the typical range for a young enterprise tech company, and the agency will already have the necessary marketing tools in place. Even at the high end of the scale, we’re looking at just under $150,000 annually.

How fast do you need to ramp up marketing?

If you’re an enterprise technology startup, you probably want to ramp up quickly. Building an in-house team could take many months of advertising, interviewing, hiring and training. Certainly, an agency will need some time to ramp up and learn your business, but a good one should start producing results within a month of engaging with you, especially if they already know your industry well.

Do you need to change course quickly?

Marketing agencies can be nimble, but if your company has a culture where things change very quickly and last-minute requests to provide marketing support is the rule, you may do better with an internal team. After all, agencies have other clients, and they can’t always pull resources off other projects at a moment’s notice. With a well-functioning, dedicated, in-house team, you can rapidly get all hands on deck.

That said, if your marketing priorities change frequently, that could be a sign that you lack a strong strategic plan. Some outside counsel may be able to help with that situation.

As you approach launch day, make sure to give some thought to whether it makes sense to hire, contact an agency or employ a mix of the two. And if you’d like to talk about how Scholes Marketing can help, we’d love to talk. Feel free to get in touch. 

Topics: Marketing Automation, Inbound Marketing & Lead Generation

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