by John Horn, CEO of StubGroup
Owning and operating any business means making hundreds of decisions every day. When you’re trying to scale your business, one of the most popular of these is, “Should we do in-house marketing or seek help from outside?” With The Great Resignation making talent more scarce and a lot more expensive, the answer to this question may seem obvious, though it’s still worthy of discussion.
Most of our clients hire an agency because they’re looking to both grow their business and improve their bottom line. Typically, their number one consideration is budget, i.e. how much money they have to spend. From this standpoint, the choice between in-sourcing or outsourcing is clear. The average annual salary of a digital marketing employee is $65,000, which is often significantly higher than what you will pay an agency (depending on your budget and other factors). Of course, that $65,000 affords the client a dedicated human being for an entire year, but often this is not really what they need. And hiring a new employee is a serious commitment. When you outsource to an agency such as StubGroup, on the other hand, you only pay for what you need or want.
This begs another question: What are your needs and wants? Outsourcing not only gives you flexibility; it opens your options to a whole team of specialists who have different areas of expertise as opposed to one employee that meets your specific criteria at a particular time. Moreover, agencies offer “pass-through” access to platform tools and strategies that will improve your return on investment (ROI). In other words, agencies are much more likely than an individual employee to have relationships with Google, Facebook, and Amazon, meaning that their people will learn about tools and optimization strategies first. Hiring a “digital marketing guru” sounds great, but your guru may end up feeling like they’re marooned on a lonely island, where they are the last to get wind of useful information and best practices.
A lot of companies create an internal role for their digital marketing needs because they assume that this will help them grow faster. Maybe, but maybe not. Rather than hope and pray for growth, we advise our clients to focus on profitability — i.e. the revenue from the marketing campaign times gross margin minus the cost of the marketing campaign. There’s a couple of reasons for this. One, reinvested profits are ultimately what will create growth in any company. Two, when companies handle their digital marketing internally they sometimes lose the forest for the trees. In other words, they get hung up on their own metrics rather than maximizing profits. This is counterproductive because, again, those profits equal future growth.
For example, we had a client in the consumer electronics space who came to us with a specific ROI threshold that they had developed internally with their marketing staff. What we discovered is that this company was missing thousands of profitable orders every month because their ROI — actually, they called it “return on ad spending” or ROAS — target was not being met by a lot of the traffic out there. When we lowered the metric, their ad spend got a little less efficient but they also generated a far higher total amount of profit. Would this have happened had they kept their marketing internal and stuck to their way of doing things? Probably not.
There’s a reason why even very large corporations that have all the money in the world to spend on hiring will outsource their digital marketing anyway — and it’s not always about cost. Digital marketing is an incredibly dynamic discipline that requires you to be both a generalist and a specialist at the same time. We are always learning about how to drive successful campaigns, both from our clients and from our partners like Google. Simply put, the fact that an agency like ours can save clients a lot of money, increase their profits and educate their managers is a win/win/win.
John Horn, CEO of StubGroup, has spent his professional career focused on creating and delivering a unique, successful product to each client, every time. He spends his days looking for ways to thrive at the cutting edge of the digital advertising world, equipping the team at StubGroup to provide excellent service to every client, and speaking with businesses looking for an effective PPC management solution.