There are two main ways that digital advertising can be handled: In-house or by a digital agency. Choosing between the two has been a hotly debated topic since the birth of advertising. This article will weigh the pros and cons of each and help CEO’s, CMO’s and business owners discover what’s best for their business.
But first, let’s get on the same page. In-house digital marketing is when the people responsible for your marketing are salaried employees, who work from your company offices. Digital agencies are service providers who sit at their own offices and have a team of experts working on planning, launching, and measuring your marketing campaigns. Agencies charge a service fee, sometimes tied to a % of ad spend or based on performance (revenue).
Digital marketing agencies are teams of creative and analytical experts that service your marketing needs on behalf of your company. Most agencies work with a hybrid payment model of either a fixed minimum fee or 10-20% of ad spend (the greater of the two). Any company can work with an agency from a 1-man startup to a Fortune 500.
1. Agency Knowledge & Best Practices
Most agencies have curated best practices over years of consistent testing, optimization, and measurement. Leverage their experience from the get-go for the best campaign structure, creatives, budget allocation, ad placement, and more. Since agencies work for a variety of clients across verticals, gain insights and improvements that work for others on your accounts too.
2. Technological Resources
Most agencies use a variety of software, some custom-built and others on an ‘Enterprise plan’. They leverage this to get the most out of your ad spend. Combining technology with a specialized team can make your budget go further, more effectively.
3. Highly Creative Atmosphere
Marketing agencies are colorful, creative places filled with energetic people. This creativity can lead to powerful and unique campaigns to take your brand to the next level.
4. Friends in High Places
Agencies will have personal relationships with people at all platforms on which you advertise. They are taken more seriously than individual companies which equate to early feature updates, better service and attention, opportunities to test Beta features, and faster response to support issues.
Agencies have the people and resources to grow with your business, you don’t worry about sourcing, hiring, and training your own staff. Tell them where you want to go and they’ll have the team to get you there. They’ll also always have someone available to manage your accounts, meaning you are less reliant on 1 or 2 key in-house contributors.
Having In-House Marketing is like opening a small agency in your own company. As a Manager Director or a CEO, be aware that if you aren’t marketing orientated or have little marketing experience, this can be very difficult to do well.
As it’s their full-time job, your in-house team will dedicate 100% of their time to only your campaigns. This makes your campaigns their total focus compared to agencies who may need to juggle multiple clients. While agencies may like to set up their clients’ ad structure and simply collect fees for letting them run, individuals in-house will be making daily changes and optimizations to direct your ads towards success. This is especially important if you have a lower budget, which means it will get low priority from agencies.
2. Fast & Clear Communication
When located in the same building or even in the office next door, you can quickly share updates and changes with greater speed. You can discuss topics in-depth and explore ideas thoroughly. And fewer items fall through the cracks when a knock at the door can clarify strategy and decisions.
3. Better Tracking and collaboration
If your sales funnel can take months or has multiple teams involved at various stages of the sale, in-house marketers can be effective at identifying what balls are being dropped and where improvements can be made. This is especially relevant for B2B clients, where 5+ teams can be involved in closing a deal.
4. Industry Expertise
Some products and services can be incredibly detailed and complex. While someone within the company can take the time to fully understand and learn the intricacies of your offering, agencies are generalists and won’t manage to give this type of expert input.
So, what’s best for me?
Digital Agencies are best if:
- You have large budgets on multiple platforms
- You have a high volume of sales and/or products
- Your business is growing and you want to expand rapidly
In-House Marketing is best if:
- You have a small budget spread across multiple platforms
- You have a complex and lengthy sales funnel
- You have a highly specialized product or service niche
You might be weighing the pros and cons and think that a combination of agency and in-house could be a good balance. In general, this is only recommended for very large companies. That said, having someone in-house with PPC experience who can be an educated person of contact for an agency is a good idea.
For example, if you have multiple brands with different products and audiences, or if you have side activities that fall out of the scope of your main advertising activities, you may consider separating them between both in-house and agency marketers.
Note: If you choose this route make sure responsibilities are very clearly defined. Having two people making changes on the same campaigns can lead to confusion, disagreement and measurement issues. Recommended splits are per platform or per advertising type (e.g. email, social, paid media).