Marketing is an essential part of any business. It is the way you communicate the value of your product or services to prospective clients, and a fundamental driver in business growth.

When it comes to marketing resource there is a number of options available to you. You can hire in-house, outsource your marketing to an expert agency, or adopt a hybrid approach - where you hire in-house while also outsourcing some marketing activities.

A common question that will emerge when considering outsourced marketing vs in-house marketing is around costs.

In-house marketing the costs are relatively simple to budget for, it will be the same costs as with any in-house employee. The employees’ salary, their equipment, training and fixed costs (such as office space).

Outsourced marketing the costs can initially appear less simple to work out. The cost will depend on the agency or freelancer used, the marketing services needed, the project scope and the project timeline.

You will find few marketing consultants or agencies will specify their exact costs up-front. Instead they will provide a quote after an initial discovery phase.

This is not a bad thing. An experienced outsourced marketeer will have a strong grasp of where best marketing spend can be used to achieve the best return on investment.

You can use this to your advantage.

If you are not sure exactly what your marketing requirements are, then you can work with an outsourced marketer to establish the best approach and then only pay for the services you need.

How will outsourced marketing agencies charge fees

Outsourced marketing agencies and consultancies will often charge their fees in a number of different ways.

Marketing agency retainers

Many agencies will charge a monthly or annual retainer for their services. This will be a set fee that covers the cost of any outsourced marketing services agreed to be provided.

For example, if you hire a marketing agency to manage your marketing, your monthly retainer could include the publishing of an agreed number of marketing emails, social post, or exhibitions/events organised.

In other words, you pay a monthly fee for only the marketing services needed.

One-off project costs

If you have a specific marketing challenge, then instead of a monthly retainer you might agree to a one-off project cost. This could be a fixed cost to deliver a set of agreed marketing outcomes. This is commonly used for projects such as developing a marketing strategy, creating your brand guidelines or building a website.

Day or hour rates

Some marketing agencies will charge a day or hourly rate. You’ll often see this for smaller pieces of work or when the amount of work required is uncertain. Here you’ll only pay for the exact number of hours or days required to carry out the marketing work required.

You’ll also see day rates used to work out the cost of a monthly retainer. For example, if 4 days of marketing support a month are required then the monthly retainer might be 4x the day rate.

Management fees

A common approach you’ll see when outsourcing marketing services that involve managing a marketing spend, such as paid search, is management fees. Here instead of charging a set fee, agencies will charge a fee based on a percentage of budget managed and spent.

For example, if you spent £5000 per month on paid search and the agency charged a 10% management fee, you would pay £500 per month to the agency as a management fee. If you increased your spend to £6000 per month, then the fee would increase to £600 per month.

What costs more in-house marketing or outsourcing?

This will depend both on the outsourced marketing agency you use and the experience level of your in-house hire.

A good rule of thumb is to consider the trade-off between the level of expertise needed and the amount of time required. Is it better to hire a junior marketer full-time, or a highly experienced outsourced marketer for a couple of days a week?

Is the marketing work needed highly skilled, or could it be achieved by a new graduate?

Will the costs of employment (salary, training and equipment) be more or less than an outsourced marketing agency quotes?

These question can help you to answer whether an outsourced marketing function on a comparatively higher day-rate, will end up costing you more or less than an in-house higher with the associated costs of employment.

Should I outsource my marketing or hire in-house marketer

Ultimately, the best option will depend on your business, your marketing goals and your budget. But, taking the time to consider the advantages and disadvantages of each option is an important exercise in ensuring you have the right marketing support to meet your marketing goals.

Often for a small growing business, a full-time marketer will be unnecessary. Instead, it is best to outsource your marketing to an expert fractional CMO or outsourced marketing agency to set up your initial marketing strategy and implementation.

This can be especially important as the set-up and strategy building phases of marketing can be the most highly skilled of all parts of your marketing journey.

Then once you have grown and your marketing has had a chance to embed within your business, you can use your outsourced marketing resource to upskill and train a new in-house marketing resource.

Another area outsourced marketing can be beneficial to your business is around highly specialist areas of marketing. This can include ecommerce, SEO or exhibition marketing. Here having an expert can save a lot of time and resources through experienced decision making.

However, in some situations, where you need a marketing function highly embedded in your teams with constant availability, then an in-house hire could be more appropriate.

The important thing is most businesses will ultimately use a mix of outsourced marketing and in-house resource at different points in the marketing journey and for different marketing activities. A key skill is to recognise when to use in-house resource and when to ask for help.

If you are thinking about outsourcing your marketing and would like to discuss your options. Get in touch and book a complimentary consultation with one of our marketing experts. We will be able to chat through possible approaches to your marketing and advise you on next best steps.

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