Which is Better: Using a Marketing Agency vs In-house?

A common question eCommerce businesses ask themselves is if relying on a marketing agency vs in-house resources makes the most sense. The short answer is: it depends. Both options have several pros and cons—which approach you choose will be influenced by factors like the size and stage of your business, your existing marketing knowledge, and your available resources.

Thankfully, by joining the eCommerce Fuel forum, you’ll be in the perfect place to network with other business owners who’ve experienced the good, the bad, and the ugly of working with marketing agencies, and they’re happy to steer you in the right direction.

In this article, we’ve tapped the real-life experiences of eCommerceFuel community members to give you an overview of common pros and cons of both approaches. Let’s dive in.

Pros & Cons of Outsourcing Marketing to an Agency

Members of the ECF community have had mixed results with using a marketing agency vs in-house resources. In most cases, it appears business owners were happiest when employing the services of an agency over a short period of time vs committing to a long-term relationship.

Repeatedly, forum members shared stories of starting with an agency only to take over the work the agency was tasked with due to poor results:

…I have had a similar experience where I had an agency run my email marketing and Facebook / Instagram ads. Eventually, my in-house team took over emails, and I just ran the FB ads.

They did a good job- but not great. They could never compete with the in-house team cause we live and breathe our product everyday- whereas as [an] agency just does the bare minimum to keep your business.

Business owners also tend to have more positive outcomes when working with smaller agencies vs larger agencies. Smaller agencies appear to be more committed to providing clients with high-touch, personalized customer care, whereas, with larger agencies, eCommerce businesses often feel they receive less support and attention.

Below are more pros and cons experienced by eCommerce business owners who opted to use the services provided by a marketing agency vs in-house resources:

Pros:

Agencies offer specialized expertise.
It’s common for an agency to focus its skills and resources on specific areas of marketing, for example, SEO or pay-per-click advertising. When an agency is specialized, its capability in an area is deep, and its team knows what’s required to generate a positive return on investment using a specific methodology.

You can quickly and cost-effectively fill knowledge gaps.
You and your team may lack the experience required to attain desired results with certain types of marketing, especially if you’re a startup. Instead of expending time and resources to hire internally, working with an agency allows you to quickly tap existing experience at a fraction of the cost.

It’s easier to part ways if things don’t work out.
You can quickly assess if an agency can meet your specific needs. If they don’t, depending on the contract terms, you should be able to end the relationship pretty quickly. With an internal marketing team, firing employees can involve much more legal, financial, and emotional complexity.

Frees up internal team members to focus on other work.
Say you have members of your team that are managing marketing campaigns while also juggling other responsibilities. Hiring an agency allows you to free up these individuals to avoid burnout and enable them to concentrate on strategic tasks in other parts of the business.

Build out your talent stack as needed.
In a forum discussion titled ‘Replacing my marketing company – any recommendations’, several business owners mention hiring multiple agencies as a better option than depending on just one. Following this suggestion, an eCommerce company can plug in smaller boutique agencies to fill specific talent gaps. They can also remove and replace them with greater ease than if they relied on just one agency.

Cons:

Overinflated statement of capabilities.
As mentioned earlier, agencies that over-promise on their capabilities but ultimately under-deliver is a common complaint among eCommerce Fuel members.

Loss of full transparency and control over the marketing process.
It can be challenging transitioning to using a marketing agency vs in-house resources, especially if your company is accustomed to having complete control over the marketing process. A lack of trust in a partnership with an agency can lead to friction that negatively impacts what an agency can accomplish. Additionally, if a marketing agency is not very good at providing regular progress reports, a budget can quickly be depleted with little to no value to show for it.

Exposure of sensitive internal data to outside parties.
As mentioned above, working with an agency requires a lot of trust. By its nature, outsourcing marketing means you’re increasing the potential for highly sensitive data like trade secrets, sales data, customer lists, platform code, and other confidential data to be compromised by a third party.

Mounting hidden costs.
Hiring a marketing agency to manage your strategy can come with an additional cost beyond obvious expenditures like ad spend and the creation of creative assets. Such expenses can include consultation fees, change orders, adding contractors to a project, and changing the scope of a campaign.

When Should You Consider Hiring a Marketing Agency?

How do you know if you should outsource marketing? There are a couple of factors to consider that can help you make the determination. One is the size of your eCommerce business; if you are a small business or a startup, working with a marketing agency may not be economically feasible. The average cost to work with a marketing agency is $150 – $250 per hour, depending on the work performed.

A better option may be to work with a consultant who can provide guidance on crafting and running marketing strategies. Another tip is to run a few marketing campaigns internally (if you have the resources) before hiring a marketing agency. This allows you to gain a detailed understanding of the process and establish key performance indicators that a competent agency should be able to match and exceed. Having this data on hand can save on research and testing costs and substantially curb the potential for wasted ad spend.

If, after considering the pros and cons above, you’ve determined hiring a marketing agency is the right decision, make sure you conduct due diligence to pick a good one. As we’ve already covered, agencies have a tendency to exaggerate their capabilities (after all, marketing is what they do!) For this reason, you’ll increase your chances of having a positive experience by asking for referrals from other eCommerce companies, something that’s easy to do in the eCommerceFuel forum.

Pros & Cons of Hiring an Internal Marketing Team

Overwhelmingly, ECF members have had positive experiences with bringing marketing management in-house. The process by which this plays out appears to follow a familiar pattern: the eCommerce business hires a marketing agency to save time and maximize potential earnings. Inevitably, they’re disappointed by the outcome produced by the agency and instead commit to building an internal marketing operation themselves.

Taking on the responsibility of managing marketing in-house is not a decision that’s made lightly—a common drawback expressed by business owners is that it stretches the existing team thin. However, the gains experienced by most companies that tread this path make the momentary discomfort bearable since the revenue they capture can later be used to hire dedicated marketing staff.

In the forum discussion, ‘We Moved Our Marketing Almost Entirely In-House Vs. Working With Agencies’ this was the exact outcome experienced by an eCommerce store owner who shares the results of her company’s journey toward building an internal marketing operation. As part of that initiative, she was responsible for crafting a robust email marketing campaign that generated an impressive 300% increase in monthly revenue. As the company grew, she retested contracting part of the work to an outside agency:

In the end, it ended up taking far more of my and my team’s time to manage the email while using this agency, and our overall revenue from email out of total revenue actually decreased by an average of 29% each month when compared to the previous year when we were managing it alone with a team of 2.

We hired an in-house email marketing expert in February of 2021 and saw fairly immediate and significant results within a few months once again. Over the course of 2021 he increased our revenue from email by 71% and significantly reduced the amount of workload on the marketing team’s plate as a whole by setting multiple strategies for balancing planned content and last-minute content, reusing assets, building onto flows, etc. When we hired him, he had a goal of needing to generate enough revenue to pay for his own position within 90 days and he achieved that within 60.

Below are more pros and cons related to managing marketing strategies in-house:

Pros:

Greater insight into what works and what doesn’t.
Managing marketing in-house allows you and your team to see the “sausage making” firsthand. With this insight, you’re in a better position to see what’s working and what’s failing and quickly end strategies that are burning cash and delivering poor ROI.

Better control over marketing campaigns.
Instead of depending on third-party data and progress reports from an outside agency, managing your marketing campaigns in-house allows you to exercise more quality control. Also worth noting, no one will know your brand and your customers as well as you do. This relationship grants you and your team intelligence that can’t be matched by an agency to make tweaks and changes to strategies.

Faster turnaround.
Delivery delays are a common complaint with using outside agencies. Since time is money, delays directly affect your bottom line. By having an internal team managing marketing, you’ll be in a better position to get strategies executed faster and make tweaks that maximize ROI.

Confidentiality of internal data is maintained.
If the prospect of multiple third parties having access to your internal sales and marketing information worries you, keeping marketing operations internal is a way to ensure data stays confidential.

You can customize your tech stack.
Agencies have specific tools they prefer to work with, but these applications may not always fit your company and processes perfectly. Managing marketing internally allows you to custom-build a tech stack that integrates seamlessly with your existing operations.

Cons:

Initial higher upfront costs.
If anything gives an eCommerce company pause about building an internal marketing operation, it’s the startup cost. From hiring the required talent to building out tech stacks, it can be substantial.

Need for deeper knowledge to get things done correctly.Even if a company wants to manage marketing in-house, this may not be the best choice. One of the advantages of working with outside experts is their ability to quickly fill knowledge gaps. An unqualified team member deciding to manage the company’s marketing strategy can lead to a business failing.

Any bad hires made can take longer to correct.
The legal and financial ramifications of making a wrong hire can lead to potential headaches and negatively affect your business.

When Should You Consider Building an Internal Marketing Team?

Several factors will help determine if keeping marketing in-house is an appropriate choice for your eCommerce company; for example, what existing marketing expertise do you have on your team? What budget do you have to build a marketing operation? And how much control do you want over your process?

If, like multiple members of our forum, you aren’t getting the results you desire from agencies, this can be a strong indication that it’s time to consider running things internally. Though upfront costs and lack of experience have been mentioned as potential negatives to managing marketing yourself, taking a strategic approach to getting started can help mitigate these cons.

One way to tackle the issue of having a knowledge gap and a thin budget is to work with marketing experts on a consultation basis. Clarity.fm has been mentioned frequently on our forums as a go-to resource for connecting and working with marketing professionals on an hourly basis. These experts can not only help you devise a strategy, but they can also make recommendations on what tools and apps to employ and give you direct feedback on your campaigns.

When you’re ready to begin building out an internal team, the first role you should consider hiring is a marketing manager. The marketing manager will ensure that all marketing activities align with your company’s overall goals and objectives. They will have the knowledge and experience to develop and run campaigns and, as it becomes financially feasible, also build out your marketing team with the right hires.

Final Thoughts: Using a Marketing Agency vs In-house?

Hopefully this article provides you with some valuable insight that will help guide you toward making the best decision about outsourcing marketing vs keeping it in-house.

Though it looks like managing marketing as an internal operation is the most popular choice by ECF members, that may not be what works in your particular case. Make certain to weigh all of the pros and cons described in this article and be realistic about any limitations you have as far as budget, time, and team resources.

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