Should you hire an agency or an in-house team? Ask these 6 ½ questions.

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I run a boutique agency in New York, but believe it or not, sometimes I’ve counseled existing clients to move services in-house instead of going through us. Think that’s nuts?

The truth is there are some projects and services that are better handled in-house, and at the end of the day, I’d rather our clients come to us for the things that we do best.
So what should you do in-house and what should you give an agency? Here are 6½ questions to help you make your decision:



1. What’s the pace of work required?

The biggest demand is creating content for social media.
One of our clients runs a lot of social content featuring events on campus. We work with them on the messaging strategy, and then they hire a student intern to take the shots, post, and respond. It works well for them because the person managing the work is a colleague of the audience and is right there when something worth capturing happens. And if something sensitive comes up, the administration is on hand to handle a tricky situation in the moment.

If you’re not posting that often, you don’t have to have someone in-house, but you need someone who’s paying attention and has a strong affinity for the business. Someone who can focus on creative quick content and respond at the pace people expect. Because it’s not just ‘social media’ platforms that are social – people may be reaching out to you through eBay, through email, or on Yelp. You have to pay attention or have someone who will.

2. What’s the approval process?

Some companies have several people who want to have input and who have equal say in creative changes. If that’s the case, you need to consider the turn-around time for your projects. Do you have time to collect the feedback, get the revisions, come back with another round? Do you need to be able to say “move it up a little?” and have that happen? I’ve worked with out of house designers who can actually do that quickly and brilliantly. But it is slower than standing over someone’s shoulder.
On the other hand, if you’re the marketing manager and you want to keep control of the approval process, it’s almost impossible to do that with an in-house person. You can’t hide them in a closet, and inevitably they’re going to be influenced by multiple players. If you don’t want the boss coming in at the last minute and over-riding your decisions, keep your services out-of-house and work as the conduit.

3. What’s your agency budget?

I can’t tell you how many times I’ve heard a client make an in-house decision because “it’s cheaper.” Really? It’s cheaper to pay salary, taxes, insurance, overhead, vacation pay and sick pay for an in-house person? Oh, and training? Did I mention training? If you’re making an in-house/out-of-house decision, be sure you include personnel costs in your spreadsheet. Or I will come and haunt you.

½. How does an ad agency charge?

What you pay for services depends on whether you’re working with a freelancer, a boutique agency or a major firm.
Major agencies make a profit by pushing the work down to the cheapest (i.e. youngest, least experienced) talent in the house. And charging you a piece of every bit of overhead they can. So even if you don’t use the impressive AI they wowed you with, you’re helping them pay for it. It’s kinda like the doctor who has the CAT-scan in the office. It’s really impressive. Until you realize it’s amortized on every bill.
Boutique agencies like ours have smaller staff and less overhead. I can’t speak for others, but here’s how we charge. We blend management fees to cover some of our hours, and markup on the media, so that the cost scales with the amount of work. (In traditional media, the work is done once you’ve sent the creative. In digital media, the management of the buys is continual, so the more you’re spending, the more we’re managing.) For creative work, we estimate a project fee upfront, based on the scope of the deliverables.
Freelancers charge hourly, and by experience. So a freelancer with ten or twenty years under their belt may charge more per hour than a newbie. But they’ve also done more, so they know what works and can get to a solution you’re happy with faster. Depending on how much patience you have for paying for someone else’s learning curve, you might want to go with the experienced person, even if their rate looks higher upfront.

4. What kind of creative do you need?

There are quality considerations:
Full-production shoots and killer layouts have their moments – when you’re presenting your company, launching a brand campaign, spending a fortune on media, the creative quality needs to align with the medium.
But for the day to day postings, the email, the pre-formatted presentations, you really need speed and a template. So you could spend the money on a freelance designer to set things up and make them look beautiful, then fill in the blanks with in-house talent.

And there are concept considerations:
If you’re in a highly regulated industry, you need a team that knows how to work within tight strictures. Controlling an in-house team makes that easier.
But if you don’t need to stick to a style guide every second, there is such a thing as “approval wear-out.” Over time, even the most enthusiastic in-house team will default to work they know will get out the door. If you want fresh thinking, or an outside perspective, you can’t do it in house.

Speaking of which, there’s a tremendous benefit to the outside perspective. Sometimes the most important role I can play for clients is taking the point of view of the ignorant outsider. Asking “what is this? How does it work? Why would I want it?” and making sure those questions get answered.

Does that sound simplistic? It’s human nature. We all know our own industries so well that we forget that we haven’t been clear about a procedure, or we default to jargon, or we assume our audience understands the benefits of our products. But they really, really don’t. Want proof? Sit in on one of those networking meetings that give you 2 minutes to pitch. See how much of anyone else’s business makes sense to you as a potential consumer. Or invest in a UX study and see whether your website is as clear as you thought it was.
We increased applications for one client by 69% by redesigning the site to show a step by step process. That’s the value of an outside perspective.

5. How often will you use the skill sets you have to hire?

Analytics are a perfect example. Think of your analytics like the stock market. If you have a robust ecommerce site, you’re essentially day-trading, and you need to focus on the data every day to know what to tweak. In which case, you’re going to need a team in-house to work with your creative team and give them timely feedback.
But if you’re not amassing data that quickly, then you need to keep an eye on the trends. So it doesn’t make sense to pay an in-house analyst. A good analytics person combines training, experience, and an understanding of your business goals.

6. What services do you need from an agency?

Keep in mind that the realm of what constitutes “marketing” these days is expanding almost as fast as the universe. The tools in your arsenal probably include traditional awareness vehicles, events, trial, social media, search, programmatic, SEO, email, analytics…and something that is being invented tomorrow that we didn’t know we couldn’t live without.
Each one of those fields requires fluency. And fluency comes from constant use and learning. That requires a tremendous investment. As an agency, we probably spend 50% our time on learning, training, keeping up with the changes in our field. So if you want a high-quality in-house team you’re going to need to keep that in mind.

A little bit of both

Our recommendation? A mix of in-house talent and agency support gives you both expedience and expertise.
For more, read this from our favorite guru, David C. Baker.

Anything I’ve missed?

Let us know what you think.