Agency vs. In-House vs. Freelance: What are the Pros and Cons

When it comes to choosing the right marketing solution for your business, I’m sure you’ve considered this question:

Is it better to hire a marketing agency, freelancer or to build an in-house team?

The truth is, there are pros and cons to all three options.

And in this post, I’ll help you evaluate them and select the best solution for your business.

Sound helpful? Let’s get started.

First, Here’s How Weighing All Your Options Will Help You Reach a Decision

You certainly know this – every business is unique. Your goals, resources, company culture and leadership team should influence which solution makes the most sense for your organization.

And with 58% of businesses increasing marketing spend in 2017, it’s important to be sure that your money goes to a solution that works for you.

(image source)

Agencies and freelancers constantly evolve to adapt to current marketing trends.

Here’s just one example for you: demand generation.

Not too long ago, agencies focused exclusively on top-of-the-funnel lead generation efforts.

Now, the best agencies help your business nurture leads and customers at each stage of the customer journey.

And best of all, they have the talent to make it happen.

Here’s another big change: recruiting top-tier marketers isn’t as easy as it used to be.

Your in-house recruiters can’t just post a job on Monster or LinkedIn and receive a flurry of new resumes each day. Top talent is just too in demand.

Instead, acquiring the right players for an in-house team means using inbound marketing strategies similar to what you might use to attract leads.

And so, with continuous changes on all fronts, knowing the pros and cons of each solution should be a top priority before making a final decision.

With that in mind, here are the pros and cons of hiring an agency, freelancer or building an in-house team.

4 Factors to Consider When Deciding Between an Agency, In-house Team or Freelancer

1. Cost

Of course, I’m sure one of your biggest questions about expanding your marketing efforts is:

Which will be the most cost effective?

[Notice that I said “cost effective,” not “cheapest.”]

Here’s a breakdown of each option:

• Agency

With an agency, pricing is typically based on individual projects and services. Their hourly rate is higher but they account for every minute and second they work to a deliverable. 

That way, you only pay for exactly what you need.

And that means you also cut out the overhead costs associated with having a full-time team.

No taxes, no benefits, no paid time off, no unemployment taxes. Just the services you need, when you need them.

Here’s a really helpful infographic previously shared on the blog to help demonstrate the cost comparison between agency and in-house.

• In-house

As mentioned before, recruiting top-tier marketing talent requires both creativity and the resources to offer competitive salary and benefits.

The median salary for a marketing manager is over $127,000 – and that doesn’t include any of the associated overhead costs.

(image source)

But there’s also a hidden cost most businesses don’t account for when considering how to grow their marketing efforts.

That’s the dreaded turnover.

Here’s the thing: employees can be lured away from your company at any time.

And the cost of turnover is more than just replacing the employee. Delays in project completion can be incredibly costly.

Now, of course, turnover exists in the agency space as well.

That’s why – if you go the agency route – it’s so important you do your research and choose an agency with a great reputation.  

• Freelancers

Freelancers are certainly the most affordable option, but remember: “cheap” is not the same as “cost effective.”

You might save some money hiring a freelancer to manage one piece of your marketing strategy.

But you’ll soon learn that no one person can do it all. In fact, you’ll likely need an entire team of freelancers to get the job done.

Freelancers also juggle multiple projects so don’t expect 100% attention on your project as well.

[I’ll share more on this in the “Skills” section below.]

Here’s what Mary Rose Maguire, a creative copywriter had to say about the importance of making a strategic investment in your marketing plan:

“It never fails to amaze me how many business owners want to pay pennies for their creative (marketing, website design, graphic design, copy) yet expect to charge premium dollar for their services or products…[I]f you want a small company that has small growth, sure. Go ahead. Go for the cheap. Your competitors will love you for it. But if you want massive growth, then the bottom line is this: you will need to invest in your business. Plain and simple.”

2. Project Management

Growing businesses have a huge hurdle to overcome when it comes to marketing.

And it’s not the budget. It’s not executive buy-in either. It’s simply finding the time to actually do the work.

Whether you decide to outsource or build in-house, considering your bandwidth for involvement in project management should be a major factor.

• Agency

Hiring an agency means taking the stress of marketing off your shoulders.

Agencies offer end-to-end project management. No need to sign-off on each step of the marketing process because you hired a team of subject matter experts to manage the strategy.

That means more time for you to focus on growing your business and less worrying about how much more you could be doing with your marketing.

• In-House

Managing an in-house team means you have oversight of the entire creative marketing process.

And for some executives, that’s worth more than the time saved and peace-of-mind that comes from outsourcing.

Of course, most agencies give you the option to be more involved if that’s important to you. In fact, that’s another one of the ways agencies have changed: a more transparent process where clients can be as involved as they want to be.  

Even still, if your priority is to completely own your end-to-end marketing strategy, it makes sense that in-house would be the right choice.

• Freelancers

When you hire a freelancer, you get something in-between the end-to-end management from an agency and the full ownership of an in-house team.

To start, freelancers need your guidance and direction to begin a new project. They rarely work on developing your strategy, but rather put into action the plan you’ve developed.

And here’s another thing: you need to account for your involvement in signing-off on their work.

With an agency, the process can be as hands-off as you want it to be. Freelancers, however, require a bit of hand-holding to get the job done.

3. Skills

Today’s top digital marketers work in one specific niche (demand generation, PPC, social media, etc.).

As a result, you need to think about the range of skills required to execute your marketing strategy before making the decision to build in-house or outsource.

• Agency

When it comes to hiring talent, agencies and in-house teams alike need to assemble a group of experts.

But that’s exactly the benefit of using an agency: you’re not responsible for building that team yourself.

Remember the last time you had to furnish your home or apartment? There are two ways to do it:

You could go the IKEA route, where you assemble everything yourself. You spend hours reading instructions and doing everything just so, only to find you’re missing a piece and the entire unit falls apart.

Or, you could purchase from a showroom and have the furniture delivered, pre-assembled, so that all you need to do is sit back and enjoy.

Sounds like an easy decision, right?

And that’s why using an agency makes sense from a skills perspective.

You can trust agencies to come “pre-assembled” with a team of diversified talent to fit any and all needs.

• In-House

Of course, having those skilled marketers in-house has a unique set of benefits, too.

For example: education.

Agencies likely won’t spend the time training you on the in’s and out’s of demand generation, for example.

But having an in-house expert means you and your team can continuously learn new strategies. That learning becomes part of your company’s collective knowledge and can be used to train future employees and scale your business.

• Freelancers

Much like agency and in-house talent, freelancers typically focus on one specific area of marketing. As a result, assembling a team of freelancers mirrors the experience of building an in-house team, only without the perk of gaining new knowledge.

Of course, as I mentioned before, hiring freelancers will likely be significantly cheaper than building an in-house team, but will require more oversight from you as well.

4. Perks

Whether you decide to outsource or build in-house, you’ll find there are different (but equally valuable) perks for your chosen solution.

• Agency

Here’s an example of agency perks:

Let’s assume your company did $1 million in revenue in 2016 and you’ve allocated the recommended 10% of sales revenue to marketing.

That means you have $100,000 to spend on marketing your business in 2017. For you, that’s a decent amount of money. But for many of the big advertisers, that’s a fairly small budget that likely won’t warrant any perks or special support.

Here’s where big agencies have a distinct advantage. This is how Jacob Baadsgaard explained it over on MarketingLand:

“Advertising agencies often manage many millions of dollars in monthly ad spend on Google AdWords, Bing Ads, LinkedIn, Facebook, Twitter and beyond. As a result, advertising platforms have a vested interest in the success of an agency and are willing to work to help them deliver the best results possible to clients.”

That means better account management from ad platforms – something that can have a huge influence on the success of your marketing efforts.

• In-House

Even with those agency perks, don’t fully rule out the benefits of having an in-house team.

Aside from the education piece I mentioned in the “Skills” section, the benefits of having an in-house marketing team include:

• Part of your company culture. Agencies have their work culture and are aligned to their mission and values. When you hire in-house, you’re building a team matched with your long-term vision for the company.
• Better collaboration with other teams. Agencies will gladly work with other teams – like Sales, for example – but don’t have the benefit of just being able to walk over to someone’s desk to ask them a question. In-house teams work better together because they know each other well.

• Freelancers

Freelancers lack the benefits of agency connections and employee integration with your business, but that doesn’t mean there aren’t certain perks.

The biggest benefit of working with a freelancer is flexibility.

Maybe you just need some copy for a landing page or someone to live-tweet about an industry event.

Freelancers can be hired for small projects, saving you the time, energy and resources of evaluating an agency or hiring talent internally.

And That’s It…

Now you know the pros and cons of agency, freelance or in-house marketing teams as they relate to 4 key areas for consideration.

What’s next? Time for you to make the decision. Good luck!