Why internalising your marketing function is probably a bad idea
Media coverage of brands internalising their marketing resource, i.e. creating an in-house agency, tends to focus on megabrands such as Pepsi, but the truth is that most small and medium-sized brands almost always reach a point where they too begin to question how best to resource their marketing needs.
Ben Norman, CEO and founder of Koozai
Let’s say a business is spending around £5000 every month with a digital marketing agency, in return for maybe five to seven days of resource. The brand’s management team then says, “Wait a minute: we could bring an experienced marketer in-house, on a full-time contract, maybe on £35-40,000 a year, and save ourselves a few grand in the process.” And, at first pass, this seems to make sense, right?
However, this way of thinking overlooks many of the ‘soft’ benefits that come with working with an agency partner and, more often than not, can end in tears.
After all, if your marketing is making you a substantial gain year on year it doesn’t make sense to risk that to save a few thousand pounds at the start of the process.
The power of one?
For example, the thing about a one-person marketing team is that they are, well, one person. That means that you’ll be paying them for at least four weeks’ holiday plus sick days, leaving you without any marketing resource in the meantime, which isn’t a problem you face when working with an agency due to its depth of talent and the work would be covered seamlessly.
Another problem is the gap between what you expect of your new marketing guru and what a lone marketer can actually provide. PR, internal comms, advertising, digital, e-commerce, affiliate marketing, PPC, social: the list goes on, but it’s simply not reasonable to expect any individual to deliver results across such a wide brief, even if they can all be lumped together as ‘marketing’.
Modern marketing is actually an interrelated range of specialisms that each require a deeper level of attention than a generalist lone marketer can provide. This is one reason why the in-house experiment frequently fails inside SMEs; the skills set of a paid social specialist is very different from that of a social content creator, but to a lay person they are both ‘social media experts’. Employers frequently bring in the wrong person simply because the brand doesn’t actually understand what its marketing needs are. Also it can be difficult to fully understand what you are hiring if you do not understand fully the skills set required and how to uncover if they have it.
This means you either accept that some areas of your marketing plan will be underserviced or, alternatively, you have to spend significant time and money training your in-house marketer in the latest approaches and techniques relevant to your organisational goals. Time spent in training is time away from the coalface, further diminishing the value of your in-house marketer.
The good agencies, by comparison, invest heavily in training and up-skilling their multidisciplinary team in their individual specialist areas, all with minimum disruption to the levels of service being delivered to clients.
The best of both worlds?
There are, of course, times and situations where the creation of an in-house agency can work well. Usually, though, this applies to established brands spending large budgets with big agencies experiencing lots of staff churn, leading to constant changes in the management of the client’s account. In those circumstances, continuous changes to the line-up mean that a strong relationship and deeper understanding of the brand and its needs are hard to achieve.
For larger brands like these, it can make sense to build an internal team, who then build specialist knowledge of the brand to go with their specific subject expertise.
However, truly understanding the brand’s needs up front and then bringing in the right people are crucial, and both can be easier said than done. We’ve worked with big brands who have created in-house marketing teams at great expense only to disband them within 12-18 months after realising they had brought in the wrong skills or people or that it simply was not performing as expected.
Internalising the marketing function, if done as a cost-cutting measure, is doomed to failure. Perhaps the best model of all for brands is to have a stable in-house marketing resource, well versed in the brand and its objectives and equipped with the budget and flexibility to call upon specialist agency expertise as and when required.
Ben Norman is the chief executive officer and founder of Koozai.
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