It can be difficult to trust an agency as much as your in-house team…that is until your in-house team leaves you. But maybe the agency works harder at recruiting, training, and retaining than you. Or maybe you’re right and the agency doesn’t manage your expectations and over promises and under delivers. While there are various options to meet your digital marketing needs, there are often trends across industries and company size - established corporations tend to outsource to agencies, high-tech companies prefer to keep everything in-house, and other companies utilize the on-site consulting model.
All 3 models have significant strengths and weaknesses, and although I may be biased because of my role at Perfect Search, I have been a part of an in-house team that has had a tremendous business impact for others. Ultimately, in this day and age the greatest cost is opportunity cost – you need to get it done or fail at doing so quickly enough!
The Agency Model
The benefits and disadvantages to the agency model can vary widely depending on the agency – make sure you trust them before engaging. From my experience, top agencies typically have more experienced, better trained talent and have processes in place superior to an in-house team. Often companies in more remote geographies will lean on agencies in larger cities because of the ease in acquiring top talent in those cities. One often overlooked benefit to working with an agency is that it minimizes the impact of employee turnover. If an in-house employee leaves, this can be a difficult replacement, however within the agency model there are multiple individuals with similar competencies, and therefore replacement costs are minimized. Agencies also allow you to structure relationships that may be more temporary in nature, save on employment taxes, and can often get a client multiple competencies in one relationship
The In-House Employee Model
Many of today’s startups are advised to keep core competencies in-house. The benefits to this are that you can ensure that you are maximizing the value of the employee who may have to wear multiple hats, manage the individual closely, and keep communication efficient. The individual’s growth and education can also have a greater impact to the business. The downside is that there is often a steep learning curve both in terms of industry knowledge and developing expertise in the specific competency. Also, as stated above, the impact of turnover of an in-house employee can be great because there may not be other team members with similar expertise to effectively transition or take over the role. Finally, bringing on in-house employees can require additional costs like benefits and tax implications along with the risk of company culture being affected.
The On-Site Consultancy Model
On-site consulting companies can offer a balanced approach to customer service. The benefits to this model span both the benefits of the agency model and the in-house model. Clients can gain a team of experts regardless of their location, and manage this team closely as if they are in-house employees. However, costs can be significant and often billed out at a fairly significant hourly rate plus travel expenses if the team is not based locally. This model is usually leveraged for Fortune 500 companies with significant budgets for large scale projects.
I’ve been fortunate enough to see and learn from various companies that have tried to execute their digital marketing needs in various forms. All 3 models have significant strengths and weaknesses, but I believe they all can work with the right team in place.