Team vs Agency- The economics of your marketing system

Insights 09 Feb 2024 by Mohamed Makarem

It is an economic choice more than a strategic one. Get this one wrong, and the balance of your business’s bottom line can tip either way. You’re a marketing manager, and you’re making plans for the year. You need to build your team. Should it be an in-­house one, or a dedicated agency? Which makes the most sense? Is it more cost-effective to employ an in-house team of marketers who will work solely on your business, helping you stay consistent and focused on the goals you set? Or should you search for agencies that can do a better job in a shorter period of time, and that offer expertise from specialists who have done what you need to do many times before? Should you seek a blend of both? Within this article we will unravel the pros and cons of both scenarios, and take you through the maze of marketing with precision of a GPS (and the humour of a stand‑up comedian). Our goal is to help you make a choice of what works most strategically and economically for your unique needs.

Understanding In-House Marketing Teams

Product Expertise and Brand Alignment

Just as a home-cooked meal is better than a takeout, an in-house marketing team is better than external hires – especially since you’re not taking someone away from their regular job is better than poaching someone’s employees. These individuals live and breathe the companies’ ethos and product – they are the brand’s custodians, the guardians of the galaxy of your business universe, with product knowledge literally encoded in their DNA which means every marketing effort will be made through the brand’s voice and vision.

Control and Immediate Alignment

Having an in-house team also means you have a captain of your in-house marketing ship sailing right in front of you, you have increased comfortability because the seas, metaphorically speaking, are very tumultuous. Running an enterprise is a treacherous job, your chief marketing officer being an important companion at the globe’s helm. This proximity factors into an important question: do you react faster, can you pivot, when you have an internal team that can move faster? Because you have personal contact, you can pivot faster than an NBA player. The expectations for in-house teams are continuing to rise. In the same way that personalised customer relationships and brand loyalty are both important in modern management.

Challenges with In-House Teams

But a good one is akin to owning a pet elephant: it’s glamorous, but a lot of work to maintain. The costs associated with operating it can be considerable, in terms of salaries, benefits, and the constant churning – not to mention the costs of keeping your in-house personnel up-to-date with the latest marketing trends. There’s also the ever-present risk of creative inertia – getting too close to the product can lead to group-think. Then there’s the possibility of overly rapid staff turnover – staff that keeps deserting can leave your marketing efforts as coordinated as a three-legged race.

The Advantages of Marketing Agencies

Expertise and Resource Accessibility

When you move from the comfort of in-house teams, into the world of agencies, you enter a landscape where the quality and calibre of skill and resources can vary enormously. Agencies are the marketing money-spinning equivalent of the pocket-sized knife that could do pretty much anything. From digital black magic to content voodoo, they have a smorgasbord of ideas and solutions; and, more often than not, they may have access to technologies in-house teams don’t or couldn’t. When you meet agencies that have the experience and skill, they can bring some magical marketing mojo to your business.

Objective Perspective

Perhaps the most compelling aspect of any outside agency is the simple fact that they’re an outside agency — they likely won’t suffer from the same internal blind-spots and self-inflicted dogmas that can befuddle any team. Their non-participation in your company’s internal affairs grants them the ability to speak a purely objective truth. If your project is something like a TV commercial, think of an outside agency as a friend who tells you that green polka dots don’t look great with orange stripes. A fresh, unbiased pair of eyes can uncover hidden opportunities or just call attention to something hugely obvious that you’d somehow failed to notice.

Scalability and Cost-Effectiveness

Scale based on your company’s ever-changing needs (scales like a chameleon) can scale up when you need to promote a new product and scale down when you go through a slow season (I try not to think about the morale of the downscaled employees)And compared with in-house employees, they can be more economical: first, no overhead. Consider the costs of providing full-time employees with benefits and a place to work; as well as hiring and training them, like university recruiters for a certain multinational group of companies.

Drawbacks of Outsourcing to Agencies

Less Familiarity with Brand

But on the flip side, agencies are just that: agencies. No matter how brilliant they are, they won’t always fit your brand’s shoes as snugly. This is because they won’t have as thorough an understanding of your core brand identity and culture as an in-house team. It’s like entrusting a cat-sitter with your cat – they’ll feed it and play with it. But, they’ll never grasp that weird thing it does where it tips over water glasses off tables. That lack of in-house familiarity can sometimes lead to marketing strategies that are excellent in general but perhaps not as attuned to the quirks of your business.

Dependence on External Resources

Although you’re outsourcing your marketing, you’ve also put your marketing lifeboat at the hands of another captain. That dependency starts to look like a double-edged sword on the surface. If things are going well for the agency, full steam ahead. If they hit an iceberg, more holes in the boat will be poked quickly and you’ll all sink faster than the Titanic. The dependency could become a huge problem if the agency hits staff turnover issues, management changes, or over-promises deliverables to others.

Divided Attention

Oh, and remember those other clients? Agencies are like the popular kid at school. That one girl or boy whom everyone wants to be friends with. As with many popular kids, they end up with lots of best friends. Dividing your focus can mean that a project receives second-class treatment. Your brand becomes just one star in the galaxy that’s your agency. You might not get the laser-focused strategy and attention that your business would get with an in-house team solely at the helm.

Making the Right Decision for Your Business

Assessing Costs and Needs

With the scales of economic reasoning on the tipping point, decision-making has never been more crucial. The question is, which one will work best for you? Just like playing chess on the gameboard, you need to think from both offensive and defensive positions. Consider your finances, and the breadth and depth of your marketing needs. Are you a tight-budget startup that needs to be more agile in your marketing tactics? Swapping work easily, using several different techniques to get the job done? Maybe an agency is the agency you need. Or are you a long-standing enterprise with a consistent, continuous marketing need? And require your marketing materials to be aligned to your brand? Then think about an in-house team that you can build.

Long-Term Considerations

You have to look further ahead. It’s like planting a tree, you’ve got to consider what the tree is going to do – are you going to water it? Are you going to look after it, so what shade is that tree going to give you? Is this in-house team going to continue to innovate to propel your brand in the longer-term future? Will it sustain brand resilience? Or will you get out there, build something, and get honest feedback from a diverse group of people who aren’t just looking at the brand every day? Will the diverse expertise and external insights of an agency drive long-term growth and nimbleness in a world of market disruption and change?

Hybrid Approach

Or if picking sides is like choosing your favourite ice-cream parlour flavour, why not pick a scoop of each? A hybrid model gives the best of both worlds, the brand-side commitment of a full-time team and the specialist expertise of an agency on a project-by-project basis. You can have your cake and eat it too!

The choice to take on an in-house team, or an agency, isn’t even really a choice. It’s an economic strategy in the messy global theatre of business marketing. We’ve gently waded through the murky waters of pros and cons, from the brand purity of in-house to the agency expert variety. Remember, though – it’s never about choosing ‘the best’ to do X or Y in a vacuum. What’s best for your brand and business story; the one you’re narrating while you exist in this world. So, consider your business goals, capabilities and aspirations with the same attention to detail as any forensic strategy expert that’s ever had to craft an end game. May your conquests in this marketing be successful, and the stories that you build with your choice, enduring.