Outsourcing vs Insourcing Your Digital Marketing

A lot of companies are trying to hire full-time digital marketing help. Is an in-house team the best way to go?

A recent search for digital marketing jobs in LinkedIn resulted in over 40,000 open positions – most of which were in-house. This reflects a definite “insourcing” trend in recent years.

But despite the growing desire to do so, according to one survey only 9% of businesses assessed their skill levels as “Strong” for all digital marketing activities.

This means that more than 90% of businesses perceive a skills gap in their digital marketing department, which is undermining their brand’s digital presence.

A shortfall in your digital presence could mean missed opportunities in generating leads, building consumer relationships, establishing brand loyalty, demonstrating expertise and growing your business.

But is the answer to continue to outsource more digital marketing work to agencies? Not necessarily. The key is to understand which digital marketing activities you should outsource and which efforts you should keep in-house.

In this article I hope to prove valuable information to help you both outsource and “insource” your digital marketing activities to bridge the digital marketing skill gaps within your business.

But first, let’s take a brief look at the digital marketing industry.

The Rise of the In-House Digital Marketing Professional

In general there is an upward hiring trend for all marketing professionals (digital, advertising, broadcast, etc.)

The Bureau of Labor Statistics predicts that employment of marketing managers in the United States will grow 9 percent between now and 2024. As of May 2016, Ohio ranked among those states with the highest employment for marketing managers. Specifically, it is estimated that Ohio employs 5,350 marketing managers.

The greatest geographical concentration of these hires is taking place in Columbus and Cleveland.

In line with these employment statistics and predictions, marketing trends from McKinley Marketing Partners revealed that in 2016, companies hired, on average, 5.6 marketing professionals. This is up from 4.7 in 2015 and represents a 19 percent increase in hiring.

At the same time, businesses used contract labor 7% less than the previous year.

Out of all the marketing professionals hired in 2016, Digital Marketing Managers were in highest demand at 54 percent.

Google Trends also supports the data. Over the last ten years, searches for “digital marketing jobs” have trended upward in popularity.

Moreover searches for “digital marketing jobs” have recently surpassed searches for traditional marketing jobs and activities, such as print, broadcast, direct mail and traditional advertising.

Why the Increase in In-House Digital Marketing?

Digital marketing has become more and more essential for growing & sustaining business in the interconnected economy.

Consider this: Owners, CEOs, Directors, Managers and other department heads spent 60% of their time managing digital marketing activities, according to a recent study.

Digital marketing skills are dominating the marketing industry because establishing an effective digital presence allows businesses to tap into enormous opportunity.

Check out this article from the Digital Marketing Institute featuring Content Marketing: 6 Examples of Successful Digital Strategies.

No doubt the growing demand for digital marketers is closely related to the continued success that many of businesses are experiencing from their digital marketing efforts. And many digital marketing activities that used to be narrow specialties are becoming standard skills that marketing professionals should possess.

The Pros of Internal Digital Marketing

Insourcing can be an attractive option for businesses for a number of reasons.

1. Business and Brand Knowledge

In-house digital marketers can be easily immersed in the culture and values of your business. They understand your history, vision and goals. Additionally, internal digital marketers will also have access to experts within your company who specialize in your products and market.

As a result, full-time internal digital marketers can quickly become fully immersed and thus ensure accurate and consistent brand messaging in their marketing strategies and campaigns.

2. On-Demand Production

Outsourced digital marketing teams have many clients to serve. Your in-house team has just one – you!

Internal hires can quickly respond to time-sensitive projects, internal challenges, and market changes.

They also have instant access to the other departments (IT, sales, etc.) within your business.

This allows the internal digital marketing team to easily get the input and knowledge they need to complete essential marketing tasks.

And they can more easily be redirected to areas that need effort or improvement.

3. Consistent Attention to Ongoing Digital Marketing Activities

There are some digital marketing activities that work best when monitored and conducted on a constant basis.

These include email marketing, drip campaigns, daily social media monitoring and more.

Outsourced digital marketing teams can manage these activities, but it is often more cost-effective to hire a full time person to do the work.

4. Acting on Business Intelligence

Internal business knowledge is essential for transforming data into actionable insights.

An in-house analyst can effectively bridge the gap between web performance data and customer relationship or sales activity data, and do this more effectively, and at lower cost, than an agency.

This is mainly due to privacy and data protection issues. There are usually barriers to an outside agency getting access to sensitive sales data that is crucial to making business decisions. At the very least, an internal data analyst should work closely with your agency who provides key metrics and tracking systems to determine ROI.

The Cons of Internal Digital Marketing

As we have seen, internal digital marketing teams possess many inherent benefits.

However, insourcing does not come without its challenges.

1. Skills Gaps

It is not uncommon for a single in-house digital marketer to be given the responsibilities of an entire digital marketing team.

A scan of recent job postings for a digital marketing manager revealed that most internal

Here are some of the most sought-after digital skills and responsibilities that are expected from the modern marketer, based on recent job postings on various recruiting sites:

  • Planning, Strategy, Execution and Reporting on key digital marketing initiatives
  • Conversion optimization for website, quote engine, landing pages, and email programs
  • Search engine optimization
  • Paid search
  • Social media advertising
  • Affiliate relationship management
  • Management of marketing automation programs
  • Leads digital marketing data, analytics, analysis, and forecasting functions

Wow! Each bullet item above could easily be a single job all on its own. This job has been posted for several months. Perhaps they are asking for too much.

While many marketing professionals have skills in most of the core digital marketing activities, in-depth understanding and experience in these activities is severely lacking.

In addition, few internal digital marketers possess skills in more specialty activities such as SEO, app development, paid advertising, mobile marketing, graphic design, and coding development.

As a result, many companies are experiencing massive skill gaps in core digital marketing activities and a complete lack of special skills within their in-house digital marketing teams.

Less talent and more demand mean hiring a quality in-house digital marketer is extremely difficult.

This leads us to our next point.

2. Recruiting is Difficult

Due to the major skill gaps and lack of special disciplines, companies are struggling to recruit staff with the right digital skills.

Finding a digital marketer who is truly experienced and talented at a broad range of skills is difficult to find and even more difficult to keep.

This increases the chance of digital marketing hiring mishaps.

Think about it:

  • First, you recognize the failures of the new hire
  • You then establish a form of intervention (e.g. management) and monitor their performance
  • If the intervention fails, you fire them and pay out any entitlements
  • Your company goes without the function for weeks or months
  • You eventually rehire and go through the whole process again

This can turn into a very expensive problem. Which leads me to my next point…

3. High Cost

> Costs in Closing the Skills Gap

In response to the digital marketing skill gaps, many organizations will seek to invest time and money into training their in-house team.

Despite many companies recognizing the need to improve their digital marketing effectiveness, few actually establish a planned approach to improve or train their internal marketing team.

Check out the massive difference between the approach companies believed in for improving their digital marketing efforts, and actual techniques they used:

In other words, companies cannot or will not allocate the necessary funds to improve their digital marketing effectiveness.

According to recent research, within the skills development arena there was a huge difference between those rating budgets as adequate (just 19%) and the vast majority (57%) who saw this as important.

The effects of these inadequate budgets can be seen in the lack of paid skill development opportunities in many businesses.

Paid qualifications (21%), paid events (16% very poor) and paid short-term courses (16% very poor) were rated as having poorer budget support.

> Costs in Retaining the Perfect Hire

But even if you were able to find the perfect digital marketer for your company and avoid the skills gaps, retaining your hire is expensive.

Mondo, the largest national staffing agency specializing in high-end, niche IT, Tech and Digital Marketing talent, released 2017 nationwide salary estimates for Digital Marketing VPs, Directors, and Managers.

The following titles and salaries vary depending upon the size of the company and the location:

  • Digital Marketing VP – between $140,000 and $200,000
  • Digital Marketing Director – between $115,000 and $145,000
  • Digital Marketing Manager – between $65,000 and $130,000
  • SEO/SEM Director – between $90,000 and $125,000
  • SEO/SEM Manager – between $75,000 and $110,000
  • SEO/SEM Specialist – between $60,000 and $80,000

These managers typically are responsible for implementing and managing marketing campaigns that promote the company brand, products and services within the digital space. They then report to Digital Marketing Directors and/or VPs who manage all the marketing efforts within each department and develop the strategies and campaigns that the managers seek to implement.

SEO/SEM is a subset of digital marketing and more specifically focused on optimizing websites to potentially increase traffic and the ROI of a given company.

Depending on the size and needs of the company, there can be SEO/SEM directors who develop high level strategies and managers who implement those strategies with the help of SEO/SEM Specialists.

In the local Cleveland/Akron, Ohio area, Linkedin approximates:

Retaining an in-house digital marketer is not always an affordable option for everyone, especially small businesses.

This high cost is only compounded by the fact that salary increases are the primary motivation for a job change within the digital marketing industry.

To sum up, building a complete in-house digital marketing team can be a very expensive endeavor whether you are attempting to close the skills gap or retain your in-house team.

Is Outsourcing the Solution?

As I showed earlier, an outsourced digital marketing team will often lack the inherent benefits of full-time internal employees:

  • Business and Brand Knowledge
  • On-Demand Focus
  • Consistent Attention to Ongoing Digital Marketing Activities
  • Business Intelligence

However, an independent digital marketing agency can provide many of the benefits of an internal team at a much lower cost, and for less exposure and risk.

The Pros of Outsourced Digital Marketing

1. Very Cost Effective and Flexible

Outsourcing can be half the cost of a full-time digital marketer.

Here is a rough analysis of the annual cost for a single full-time internal digital marketer:

Compare that with this cost scenario for working with a typical outsourced digital marketing firm:

Depending on the needs and size of your business, you could save 50% or more by outsourcing your digital marketing.

And these savings do not even account for your business being able to avoid the high cost of potential mis-hires or employee training.

Plus… billing is flexible!

The cost of outsourcing depends on the needs of your business and not the individual salary of your digital marketer.

Instead, the cost is typically determined by hourly work, retainer or the completion percentage of a given project.

Overall, the cost of outsourcing can be significantly more affordable and flexible.

2. A Team of Specialized Experts – No Skills Gap!

When working with a digital marketing agency, you get the benefit of many more technical skills and strategic manpower, for a set price:

  • Digital marketing agencies recognize that change is a constant, and thus are always looking to stay on top of the latest trends, techniques and technologies to stay competitive.
  • Digital marketing requires many brains to achieve a wide skill set and specialization. Hiring an agency allows you to access a team of digital marketers who have been given the time and resources to individually specialize in both the common and more sought after digital disciplines.
  • Typically an agency has experience across a variety of companies and industries and can bring that experience to your situation.

3. Measurable ROI

How well is your digital marketing working?

The common answer for most companies is: “I don’t know.”

Why?

Just above securing enough budget, proving ROI was the second most challenging problem that marketers faced.

Unlike most internal marketers, outsourced agencies are focused measurable results and outcomes.

They know how to analyze KPIs and benchmarks for monitoring ROI in every digital strategy.

This data lets you know if digital marketing is working or not.

And agencies use this information to test and improve current and future digital campaigns.

What Should You Do?

Depending on the needs of your business, there are benefits and drawbacks to both outsourcing and insourcing your digital marketing efforts.

Your unique business situation may call for hiring an internal digital marketer or working with an agency.

But making that choice can feel like a huge sacrifice or very uncertain.

As a result, many companies are working to find a happy medium and receive a mix of in-house and outsourced digital marketing.

You don’t need to only outsource or completely abandon internal efforts when you can receive the benefits of both.

Start Your Journey with K6 Digital

Disclaimer: This is where I tell you about what we have to offer and “sell” a little bit. Feel free to stop reading if you’re totally happy with your current arrangements.

K6 Digital Marketing can work alongside your internal digital marketer(s) to foster this mixture and get you’re the combined benefits of both in-house and outsourced digital marketing.

Our specialized team of digital experts bridges the skill gaps within your internal marketing team.

Looking to outsource a specific project or all your digital marketing efforts?

We are more than capable of providing customized solutions and taking on all your digital marketing activities.

Since 1999, K6 has served more than 1,000 clients worldwide with a proven delivery model that gets Real Results.

Let us help you figure out what digital strategy is best for your business.

There is no obligation whatsoever.

We’re just glad our paths have crossed.

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