Digital Marketing Agency vs In-House: Costs Compared

Last updated:
July 6, 2023

Businesses often find themselves at a crossroads: should they invest in an in-house marketing team to develop a solid digital marketing strategy or outsource to a digital marketing agency offering comprehensive digital marketing services?

This crucial decision requires a comprehensive cost-benefit analysis of both types of scenarios. Factors such as the type of business, the industry in which it operates, the target audience, the competitive environment, and even the specific digital channels that the business needs to focus on, can all influence the decision.

Not only this, but the business's financial position, marketing goals, the amount of time that can be dedicated to digital marketing efforts, and the specific skills required are also important considerations.  

The complexity of digital marketing strategies has increased dramatically in recent years, with a shift towards more personalized promotional content, the rise of new social media channels, and the continuous updates in search engine algorithms.

Why Investing in Digital Marketing Services is Important for Business

Without a significant marketing spend targeted towards digital marketing efforts, prospective customers may remain just that—prospects. It's essential to have a process in place that not only attracts leads but also converts those leads into customers. A part of this process includes the strategic use of relevant keywords in your content strategy, boosting your online presence, and making it easier for potential clients or your target audience to find you.

Critical digital marketing conversion goals include: connecting with your target audience on the right online channels, building a strong social media presence, creating compelling content, and leveraging online marketing tools and platforms to boost your brand's visibility and customer retention, all to attract qualified leads.

The digital market is an uphill battle for business owners of startups or ecommerce businesses to build a customer base and encourage business growth without effective marketing strategies such as deploying a targeted keyword social media campaign on popular channels in order to reach the target audience.

In today's digital marketing landscape, millions of businesses are competing every day for digital real estate in the form of search engine visibility and rankings. The importance of digital marketing services cannot be overstated when it comes to marketing budgets.

RELATED: A Basic Guide to Digital Marketing for eCommerce

Costs of Hiring a Digital Marketing Specialist

The annual salary for an in-house digital marketing specialist in North America varies between $55,000 and $70,000 in 2023. However, this base salary is just one component of the total cost. Additional overheads include:

  • Benefits such as health insurance, retirement contributions, and paid vacation leave, can add another 20%-30% to the base salary.

  • Costs associated with onboarding and training, especially in areas like online advertising, web design and development, search engine optimization, and social media marketing.

  • Office space, equipment, and tool and software subscriptions, essential for developing an effective digital marketing strategy and targeting potential customers in your target market.

  • Management time and other HR-related expenses.

Adding all these together, the cost of an in-house specialist significantly exceeds their base salary, thereby increasing the overall expenditure for businesses in their pursuit of improved online presence and client engagement.

Costs of Hiring a Digital Marketing Agency

Conversely, the cost of hiring a digital marketing agency can vary widely depending on their location, size, and the scope of their services. With monthly plans ranging from a few hundred to several thousand dollars. This typically includes:

  • Access to an experienced team of digital marketing professionals with a wide variety of expertise, including areas like search engine marketing, Google Ads, graphic design, and conversion rate optimization.

  • Access to premium digital marketing assets including tools, software, and platforms that can improve your digital presence and increase organic traffic.

  • Consistent weekly content marketing campaigns and blogging to maintain high search engine rankings and generate interest from the ideal customer

  • Regular reporting and campaign analytics are crucial to tweaking and refining your digital marketing campaign.

  • Specialized types of services such as online reputation management, effective link building campaigns, and technical SEO services.

The agency model offers flexibility, enabling businesses to scale their services according to their business goals and needs, and reduce their commitment compared to hiring a full-time employee.

RELATED: How to Choose the Right Digital Marketing Agency

Benefits of Hiring a Digital Marketing Specialist

By hiring an in-house digital marketing expert, you gain a dedicated team member who can fully immerse themselves in your brand, providing business owners with a direct working relationship and internal communication with the employee.  

The digital marketing employee may also have a better understanding of the company culture and the latest products being designed or offered which could be beneficial in social media marketing campaigns.  

However, the diverse skill set and knowledge required in digital marketing - including social media management, consistent blog content creation, digital advertising, SEO optimization, PPC, and email marketing - may necessitate hiring multiple employees to cover all these areas effectively, which significantly increases costs.

Benefits of Hiring a Digital Marketing Agency

Benefits of Hiring a Digital Marketing Agency

Digital marketing agencies, on the other hand, typically boast a team of experts across various fields, allowing for a more extensive approach when it comes to developing an inbound marketing strategy, creating an effective storefront design, delivering high-quality content, and coming up with additional proven digital marketing solutions.

Professional digital marketing companies keep pace with the latest industry trends, have wider industry perspective, and can often spot and rectify your business blind spots.

For example, an ecommerce business might be investing heavily in social media marketing but neglecting consistent blog posts, a proven strategy for boosting SEO, driving traffic, and generating high-quality leads. A dedicated digital marketing team can identify this gap and rebalance your SEO strategies accordingly, even creating content for SEO where necessary.

Similarly, agencies excel in keyword research, a core component of any digital marketing plan. The right high-performing keywords can increase qualified traffic, improve search engine rankings, and drive conversions. In-house teams may miss this crucial detail or fail to regularly update keyword strategies. A digital marketing agency, with their deep understanding of industry trends and expertise as SEO experts, can ensure your keyword strategy stays competitive.

A digital marketing agency also enables business owners to focus their time and energy on other critical parts of their business. With the agency handling all marketing and design aspects of your digital channels - from content marketing strategy and campaign management to customer engagement -- business owners can concentrate on refining their products or services, ensuring a higher level of quality and customer satisfaction.

RELATED: What is Digital Marketing & How Does It Work?

Cost-Benefit Analysis: Weighing the Budget

To decide whether to hire an in-house digital marketing specialist or a digital marketing agency, it's essential to weigh the costs against the benefits.

Suppose you hire a digital marketing agency for $2000 per month and can directly attribute a $5000 increase in sales to their efforts. In this case, the marketing ROI is clear.

However, if you hire a single in-house digital marketing specialist at a salary of $55,000 - $70,000 per year (approximately $4583 - $5833 per month, excluding additional costs), they would need to generate significantly more revenue to offer the same ROI.

Business owners should consider that hiring multiple digital marketers may be required to cover all digital marketing channels effectively.

Digital Marketing Services: Hiring a Digital Marketing Agency vs In-House

While the costs of hiring a digital marketing agency may appear high, when you consider the wider range of skills and expertise an agency offers, and the potential increased costs of hiring a single or multiple in-house digital marketing specialists, the picture can change dramatically.

A digital marketing agency can offer a comprehensive, expert, and up-to-date approach to your digital strategies and business objectives, identifying blind spots, and driving more effective results.

Conversely, while hiring in-house digital marketers may provide a direct workplace relationship, business owners could face significantly higher costs and a more limited skill set when compared to the team of a digital marketing company.

Business owners should conduct their own company's cost-benefit analysis, considering its unique needs, marketing budget, and long-term growth plans. Some businesses may find a hybrid approach - employing an in-house team for some tasks and outsourcing others to an agency - works best for them.  

Make an informed decision that aligns with your budget and business goals and ensures that your digital marketing efforts drives growth and long-term success.

Book your discovery call today

Book a Discovery Call

Let us help you with your strategy, 1-on-1.

Request for Proposal

How can we help your business?
Submit RFP

Subscribe to our newsletter to get the latest news and insights right in your inbox.