In most cases an internal person/team is needed to interface with the management, legal & compliance, IT and other internal functions. A CMO-type role that is very hard to do externally. But for other functions, buying advertising, design, SEO, PR, research and so on they can physically be done by both internal and external marketing teams without much problems.
So the question becomes one of efficiency and effectiveness. In other words; will an external team give a higher ROI than an internal one? A couple questions need answering to be able to make that decision:
– Which area’s do you need help in?
– Is there enough scope to hire specialists in each area?
– What expertise is available for hire internally versus what expertise is available externally?
– What is the cost of hiring well-trained local staff versus outsourcing it?
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– Would you like flexibility with regards to resources but at a usually (somewhat) higher cost?
Is A Specialist Needed?
To expand somewhat on these questions; you need clarity on what you need help with either internally or externally – that goes without saying. But when it comes to hiring someone, is there enough work to be done to hire a specialist? You might want to consider hiring an agency if you need ‘a little bit of everything’ rather than one specific service. For example; say you need help in online marketing; you can hire specialists in PPC, Display buying, SEO, Web Analytics, Trafficking and reporting, Web admin, Design and so on but your team will be very large and you might not need all of them fulltime. You could hire a generalist but rarely will they know enough of everything to make sense of it all. So to get the right specialist expertise, it makes sense to hire an agency.
When it comes to a very specific area that you need help with, you need to consider whether the type of expertise you want is available and if so, what type of oversight they require. Hiring an experienced agency in your niche will give you specialists that have ample knowledge of your product and KPI’s but it also gives built in support and guidance functions. If for instance you hire a very good PPC specialist, they will still need a senior person to give them guidance specific to PPC.
The cost is usually the downside of this arrangement; hiring internally can seem cheaper on a discrete basis but not always when considering all facets. So when it comes time to send Request for Proposals, why not ask agencies to quantify the value they add by for instance getting you more business at lower cost? Lastly I would say that hiring externally gives you flexibility when it comes to deploying resources that you don’t have otherwise, but because of that flexibility there will be less of an organisational learning function over time.
A Complementary Strategy
I am somewhat biased running a marketing agency but I think considering everything it usually makes sense to have some support internally and some outsourced. In specific I think that outsourcing specialist functions, media buying and strategic guidance to complement what is being done internally is a good way to go for mid- to large sized organisations. For smaller organisations I think outsourcing everything to one or more external agencies is the way to go in order to gain very expensive expertise at low cost.