For many SMBs, this is the age old question: What needs should I hire for, and what needs should I outsource?
When it comes to marketing, you are not dealing with a monolith. Some marketing tasks make sense to outsource, while others, argue Account Executive Marc Amigone, are darn-near essential to take in house.
For a clear idea of how to best proceed to meet your marketing goals, read on.
John: Can you first start off by saying who's in a position to ask about insourcing or outsourcing marketing?
Marc: Generally speaking, companies ask this who are look to get started with digital marketing because they want to increase their sales, increase their revenue via digital marketing, or perhaps they're kind of being forced to.
Let me give you an example. A company that I was talking to earlier today is a company that historically has relied on in-person events for their marketing strategy.
A lot of companies right now, their pre-existing strategy of in person events, nose to nose selling, knocking on doors, shaking hands, that sort of thing, is no longer possible. When that screeched to a halt, they knew they needed to really invest in digital marketing.
We can help them get leads through digital marketing, but we can’t just snap our fingers and make it happen over night.
A lot of businesses see their marketing challenges and think, well, I’ll just hire an agency. They'll produce leads really quickly. And that's really part of the education process that we have to go through.
The misconception of ramp-up speed
John: Talk about why that's a misconception.
Marc: These people I just got off the phone with, they already have two proposals from agencies that basically said “we're going to repurpose your existing website. We're going to start running pay-per-click ads.
We're going to do all these things and that will net you guys leads. And then it's up to you guys to close those leads.”
And I just started poking some holes in that strategy.
Whatever the smoke and mirrors that these agencies are offering, none of it is going to be as effective as it could be without compelling marketing content. Content is the fuel that drives the engine.
And in order to create good content, somebody needs to own that within your company.
It's really, really difficult to outsource effective content creation. So any agency that says, "don't worry about adding more staff, don't worry about investing time creating content, we'll do all that for you."
If you're hearing that, I bet you'll be calling me back in six months and saying you just wasted your budget.
I think those agencies that are promising a very short term solution are not really thinking long term with their clients as much as we might.
That agency is probably thinking that they just need to start executing a few tactics that make it seem like it's worth the investment to work with them, just to keep the client happy for the first few months so they extend the contract.
What marketing should you insource? What can you outsource?
John: So, what should companies insource and outsource in terms of marketing needs?
Marc: There are definitely marketing needs you're going to want to hire an agency for such as executing pay-per-click campaigns, website redesign projects, or perhaps video projects.
There are certain things that people think of as one time expenses, one time projects, or short term projects.
For instance, you probably shouldn’t build an entire web design team within your marketing department. If you need a new website, you’re going to hire an agency.
Pay-per-click advertising is another thing that most companies probably don't need to insource.
But content creation is different. In order to be effective with inbound marketing, and I would argue digital marketing more broadly, content creation needs to be the centerpiece of your strategy. And if you're outsourcing that, it's an expensive and ineffective way to create content.
The second hire would be the digital marketing manager, who is responsible for updating your website, executing email marketing campaigns, and doing social media.
Sometimes you can have the content manager take care of some of those responsibilities too, but only if they can manage to fit that in on top of their content responsibilities, which are a full time job.
For the average company, whose revenue is anywhere between $2 million and $15 million, you're probably only going to have three to five people on your marketing team, and this is where you should start.
Why it makes sense to outsource paid media
John: It makes sense that you would outsource for something like web development because it’s not an ongoing need. But why outsource paid media?
Marc: That's a great question. Paid media is a little bit more specialized skill. If you're a business that is dependent on paid media for all your income, and paid acquisition is where you're getting the bulk of your leads, then, in that case, I would say it makes sense to insource.
But if you're using paid media as a supplemental source of new business for you, then you're probably better served by having somebody who is really good at paid media manage your account.
Staffing your marketing team
John: How do you recommend staffing internal digital marketing teams, in terms of the essential core competencies?
Marc: I think back to an article that Mike Volpe, who is a former CMO of HubSpot, wrote to address this topic, focusing on how he structured the HubSpot marketing team.
He thought of it like a funnel. He had probably a 30-person marketing team, with the biggest section being the content team. Of the 30 people, something like 15 were all focused on content — that's written content, eBooks, blog posts, and videos.
And then the next layer down from that was focused on turning people who were interacting with that content into qualified leads.
So that would be more like your digital marketing person, the person who is going to set up automation, the person who is going to manage HubSpot, optimize your website, that sort of thing.
The smallest section of the HubSpot marketing team was a product marketing team.
They were focused on product adoption, product launches and sales enablement. Those are way more specialized roles and functions, so they needed way less people to do those jobs.
But, generally speaking, first and foremost what most people are going to need to hire for is content. And then, once that box is checked, then they can think about hiring for digital marketing and video or anything else.
Marketing in house: a cost analysis
John: How does the cost of hiring an agency compare to hiring marketers in house?
Marc: Generally speaking, a full time content manager is going to be at least $40,000 per year, and that’s if you're getting somebody who's pretty junior level. Obviously this can vary depending on where in the country you’re located. But divide out by the month, and you’re spending $3400 per month.
There are agencies out there that will be able to do something for you for that price, but they're probably not the most high-end agency in the world. Suffice it to say, you’re likely to get more out of a full time employee for that rate per month than you will out of an agency.
Yes, you have to invest in getting that employee onboarded and ramped up, but you also need to build a relationship with your agency, too. They don't walk in the door as an expert about your business.
People assume that agencies are ready to produce from day one. But that’s not the case. If you’re going to invest time and money ramping somebody up, wouldn’t you want them to be there for the long term?
Furthermore, people often think it's much easier to just hire an agency. Like you flip the switch and leads start coming in. It’s just not true.
When I talk to businesses, we’re not the first agency that they’ve ever talked to. They've had bad experiences with agencies before. They’ll come in and say, I spent $25,000 over six months with this agency and got zero in return.
And I ask, so what did you learn from that experience?
The bottom line is this: people assume that it's faster and cheaper just to outsource.
Sometimes it is, like when hiring a web developer or graphic designer, but when it comes to the core function of any marketing, you really want to own as much as possible.
Working with an agency is no guarantee of results — and they often are only thinking very short term.
Our experience teaches us that companies who take ownership of their growth see the best results. They still engage with agencies on a project basis or to train their staff on best practices, but companies who depend on outsourced relationships with agencies generally don’t see the kind of results our most successful clients have seen.