Every day, owning and operating a business necessitates making hundreds of decisions. One of the most common questions when trying to scale your business is, “Should we do in-house marketing or hire outside help?” The answer to this question may seem obvious, but it’s still worth debating, especially since The Great Resignation has made talent more scarce and expensive.
The majority of our clients hire us because they want to expand their business while also improving their bottom line. The first thing they think about is their budget, or how much money they have to spend. The choice between in-sourcing and outsourcing is clear from this perspective. A digital marketing employee’s average annual salary is $65,000, which is often significantly higher than what you’ll pay an agency (depending on your budget and other factors). Of course, that $65,000 buys the client a dedicated human being for a year, but that isn’t always what they require. And bringing on a new employee is a big deal. When you outsource to a company like Fileproinfo, on the other hand, you only pay for the services you require.
This raises a new question: what are your wants and needs? Outsourcing not only gives you flexibility, but it also gives you access to a whole team of experts with various areas of expertise, rather than just one employee who meets your specific criteria at a given time. Furthermore, agencies provide “pass-through” access to platform tools and strategies that will boost your ROI (ROI). To put it another way, agencies are far more likely than individual employees to have relationships with Google, Facebook, and Amazon, which means that their employees will be the first to learn about tools and optimization strategies. Hiring a “digital marketing guru” may seem like a good idea, but your guru may end up feeling like they’re stranded on a deserted island, where they’re the last to hear about useful information and best practices.
Many businesses create an internal role to handle their digital marketing needs in the hopes of accelerating their growth. Perhaps, but perhaps not. Rather than hoping for growth, we advise our clients to concentrate on profitability, which is calculated as revenue times gross margin minus marketing campaign cost. This is due to several factors. One, profits that are re-invested are ultimate what drives a company’s growth. Two, when businesses handle their digital marketing in-house, they can lose sight of the forest for the trees. To put it another way, they are more concerned with their own metrics than with maximizing profits. This is inefficient because, once again, profits equal future growth.
For example, we had a consumer electronics client who came to us with a specific ROI threshold that they had developed with their marketing team internally. What we discovered was that this company was missing out on thousands of profitable orders every month because their ROI — or “return on ad spending” or ROAS — the target was not being met by a large portion of the traffic. When we reduced the metric, their ad spend became slightly less efficient, but they generated a significantly higher total profit. Would this have occurred if they had kept their marketing in-house and stuck to their methods? Most likely not.
There’s a reason why even very large corporations with unlimited hiring budgets outsource their digital marketing anyway — and it’s not always because of cost. Digital marketing is a fast-paced field that requires you to be a generalist and a specialist at the same time. We are constantly learning from our clients and partners like Google about how to run successful campaigns. Simply put, it’s a win/win/win situation when an agency like ours can save clients a lot of money, increase their profits, and educate their managers.
Learn more from marketing and read 3 Marketing Tips for Your New SaaS Product.
