Attempting to consider your marketing strategy in the context of an hourly rate can be frightening. It’s not uncommon to hear rates of well over one or two hundred dollars-per-hour for professional marketing services, and even more for strategic planning or consulting hours.
At some point you’ll consider what makes the most sense; is it better for you to hire individual marketers and build-out in-house expertise or is it wiser to work with an agency of experts? While it ultimately can be a numbers game, here are some things to consider in terms of true value-add.
Breadth of Services
Depending on how large your organization is, and how lofty your sales and marketing goals are, you’re likely going to have a hard time finding all your marketing needs met with one individual. With all the complexities of the digital marketing space, it’s simply unrealistic to expect someone to truly own all of Search Engine Optimization, Pay Per Click Advertising, Social Ads, content development, community management… the list goes on.
The best brand-side marketers are those that understand how all of these pieces fit together, and know when it’s time to tap-out and call in an expert. Just as a great heart surgeon will be a specialist, a great brand-side marketer is like a general practitioner who knows exactly who to defer to when an expert is needed. Their focus is on the health of the patient’s entire body, and the specialist can fix any problem related to their heart, lungs or brain.
Would you trust a heart surgeon who claimed to know his way around the brain as well? Perhaps this is an extreme example, but considering the pace at which digital marketing moves, it can be a full time job to specialize in a discipline as complex as Google AdWords, for example.
Perhaps you could hire all of these specialists in-house; what would the costs be? Rather than focusing on the care they provide, you’d be focusing on the operational costs of such a large team with needs that go beyond the subject-matter they were hired to deliver. These added costs lead to my next point.
Better Use of YOUR Money
First, you need to consider that a 52 week year can actually be 46 weeks. Of course, it varies from organization to organization, but you need to take into account vacation, sick days and other time off.
The eight hour work day is a beautiful dream. The reality, on the other hand, is that people get up and use the bathroom, take coffee breaks, answer emails and attend meetings. In many organizations, the non-productive time can easily be two to three hours per day or more, resulting in a net productivity of 60-75%.
When you hire internally, you pay for all eight hours; when you hire an agency, you only pay for the hours in which a person is actively working on your account. We find in our own organization that we have a net billable time of about 60% to 65% per person. The rest goes into training, human resources, internal meetings, and everything else that an agency needs to maintain a talented workforce.
Of course, in your organization, you might expect people to work more than eight hours a day, in which case you might get that productive rate up (although it has been argued by productivity experts that the extra hours don’t necessarily translate directly to productivity). If you push harder, you must always weigh the cost against your human capital. With an agency, creating a system to confront that challenge becomes your partner’s responsibility, clearing the way for you and your account team to focus on the goals and the metrics that link directly to the heart of your business.
For those in the position of weighing the impact of hiring for a specialized individual or bringing in a new agency, the key factor may be the fact that you’re fundamentally exploring a new area of your marketing. Perhaps it’s paid digital advertising, email marketing, running an affiliate program, or hiring a specialized web developer. Either way, those hires likely represent a new channel for sales, or a new facet of your team’s workflow that needs to be developed.
For agencies, integrating a new channel into an organization’s sales funnel is a way of life. A strong partner will have done this countless times, and will know what questions to ask and processes to put in place to measure success.
Hiring internally, you’re not only building out an in-house competency that wasn’t present before, you’re introducing a new resource into your business system. An individual will need to be sensitive to internal politics, create relationships with various departments, and scope out their role in the workflow as they settle in.
The most painful part of this process is almost never the subject matter itself. Either way you’ll hope to end up with a resource that excels at one specific business function, but what you might not anticipate is the process that an agency has refined over and over again to cover all the bases, from on-boarding to measurement and reporting, that an internal hire might have to scope that out from scratch.
Beyond the integration with the brand-side business processes, there is also a focus on process development that we take great pride in at DragonSearch and which benefit all of our clients. The tool set that we have developed includes many options for each task and is the product of years of testing and experience. Although an individual marketer might have their preferred toolset, making sure that the right tool is applied in each situation is something that only comes with time. That time might be something a brand cannot afford to wait on.
Digital marketing is one of the most rapidly changing landscapes. People in the industry need to read blog posts, attend webinars and conferences, are active on social networks and fundamentally immerse themselves in an environment of constant learning. In our organization, we bring in outside experts to provide lunch-and-learns and regularly send people to industry conferences. Many of those conferences have a price tag of two to three thousand dollars and require air fare, hotels and meals. Add to that all the time that each staff member isn’t billing to a client while at a conference.
If you’re going to hire internally consider that, for a specialized discipline, that new hire might be the only person on your team versed in that subject matter. The digital marketing community is an integral part of our company, as is the community of experts we employ across the wide range of clients we work with. The notion of 1 + 1 = 3 is such that the communal knowledge amplifies the ability of each individual. Their value is more than that which they possess individually; it’s their value, and the value brought by their proximity to other experts in a culture of sharing and growth, that we bring to our clients.
Since agencies frequently work across many different verticals, they often bring new ideas and innovation to the table that otherwise might be lacking from a single source, no matter how skilled. It’s not impossible to enhance a single person’s pool of resources, and to enable their ongoing growth, but you should plan to commit real resources to this each month.
One of the critical process-oriented parts of our work at DragonSearch is to be held accountable to metrics that we collaboratively set with our clients. Ultimately, this comes down to the notion of solving business problems with marketing (rather than simply solving marketing problems). Our strategies are predicated on having a good understanding of the business situation before putting any tactics into place.
If you were to ask yourself “who is the best email marketer in the world,” the process may have already gone awry. You’re at a stage where change is necessary for your business to grow. Once you put a job listing out for an email marketer, you’ve already stated that the change you want for your business is to include email marketing. At that point the decision has already been made that email marketing is directly related to the health of the business.
I would hazard a guess that email marketing isn’t the change you want in your business. Nine out of ten times the change clients are looking for is more revenue. This typically means more sales and, in turn, more leads, more traffic, and thus more engagement in search engines, display placements, social media feeds and on and on.
The important distinction is the stage that we insert ourselves in the conversation is the stage most closely related to the health of the business: more revenue. Then we begin to ask questions about what levers can be pushed to make that happen. Increasing the number of sales will open an entire playbook of strategies and tactics to solve the revenue problem (or opportunity if you prefer the rosy lens). Maybe the play is increasing the average order value – that would mean becoming more targeted, rather than simply increasing the breadth of potential customers reached. The point here is that once you have reached the decision that a specific role should be hired, the relationship of this role to the business success has already been assumed.
One reason why this is so critical for agencies is that we must be accountable to our clients. Since we don’t typically ask our clients to sign long-term contracts, we’re always only as strong as the preceding month’s work. If we don’t hit our metrics, why didn’t we? Have we exposed part of the conversion funnel that must be improved or caused an issue by blocking the success of our campaign? If so, it’s on us to spur change in our client’s organization to address it. An agency will have seen this before. In these situations, being slightly removed from the client organization’s internal structure removes the political fetters of identifying an area in need of improvement.
Digital marketers are frequently changing jobs. It isn’t uncommon to see marketers for in-house stepping up the ladder about every two years. Agencies are better positioned to attract and retain talent and best equipped to handle the turnover. In addition, the agency, not the clients cover the expenses of new hires:
- Human resource time
- Onboarding time
- Training Time
- Outsourced placement (usually the equivalent of one month of salary)
- Costs of job advertising
Agencies will always be looking for more talent, and will have a business model which necessitates excess capacity to handle increased business. In many cases the prevailing philosophy on the brand-side, particularly for those who prescribe to the ‘lean startup’ philosophy, might be, “don’t hire till it hurts.”
Turnover is inevitable, as is the increase of new business under healthy circumstances. Agencies are able to build this into their model by spreading the needs of a client’s business across a talented team that shares responsibility, favoring individual strengths and allowing for agility week to week. For a brand, losing a resource might mean an entire area of purview is stalled pending a search and on-boarding process. For an agency, losing a resource can be shocking and painful, but work will go on and the clients will continue seeing results, ideally with little or no hiccup along the way.
Apples to Apples, Except When it’s Not
If you set out to confront this challenge, the time will come to get out the pen and paper to compare what a salary might cost to what the scope of work a budget with an agency will get you. You’ll be tempted to compare apples to apples, and might even find that an in-house person appears to represent a lower cost. Remember that this only tells part of the story.
Managing a team is a big responsibility, and also illustrates a change in the scope of that manager’s role. Much more blood, sweat, and tears will go into building an in-house capability. Between training, human resources, non-productive time, and process-driven business systems, you’ll find that a weekly check-in call with a team of experts might suddenly look very attractive. And remember, if your mission is to make the best widgets money can buy, where does developing the best in-house marketing team fit in to that mission?
This entry was posted on Friday, January 16, 2015 and is filed under FeaturedBlog, Integrated Marketing, Organizational Innovation.
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