A Simple Model To Determine When To Go Agency And When To Go In-House

I’m the CEO of an online marketing agency, and I’m here to tell you that there are a lot of marketing functions you shouldn’t outsource to an agency.

Surprised? Don’t worry — there’s still plenty of work for agencies to do.

But making smart choices about when to outsource ends up being a huge benefit for both agencies and clients. This article suggests a simple framework for companies to use to help them make these decisions.

First Things First: There’s More Than Enough Work For Everyone

I know there are marketing teams out there that fundamentally believe that nothing should be outsourced to an agency. I’ve talked to many such people, and the arguments against agencies generally come down to a few common themes:

1. We can do it better than an agency.

2. We care more about our company than an agency (resulting in better performance).

3. We don’t want anyone to learn the recipe for our secret sauce.

4. Agencies just add complication.

All of these are legitimate concerns, but here’s the problem: Few — if any — marketing  teams have the time to do everything needed to be successful in online marketing today. Think about this: If you are arguing that you don’t need agency support, that implicitly means that your internal team is handling:

1. AdWords – including Google Display Network and Google Shopping ads (formerly PLAs)

2. Bing Ads

3. SEO

4. Display – including programmatic, premium, retargeting, and all creative design

5. Mobile and other devices

6. Affiliate

7. Facebook – paid, earned and owned

8. Twitter – same as Facebook

9. Pinterest

10. Native advertising

11. Video – paid, earned and owned

12. Email

13. Other social networks – Reddit, Tumblr, Snapchat, LinkedIn, Google+ (just kidding)

14. Landing page optimization

15. Technology selection and implementation – including campaign management, analytics, attribution, DSP, DMP, ad server, tag management, etc.

You can do a few things well or a lot of things poorly. Unless your internal marketing team is approaching 15 to 20 people, any attempt to do everything in-house risks major quality control lapses.

An Outsourcing Model Based On Three Simple Questions

If you accept my argument that there is simply too much stuff to do for an in-house team to handle everything, the next logical question is, “How do I figure out what to outsource?” I think there are three key questions you need to ask about every channel/task to come to a logical conclusion. They are:

1. How important is this to my company’s success?

2. Does my team have the ability to do this internally?

3. Is my team interested in doing this?

You can create any sort of scoring system you want, but for the sake of simplicity, let’s just use a 0-to-10 ranking system, with 10 being the highest score. Now, take all of your scores and plot them on a chart with two axes: an “interest in doing this” axis and an “ability to do this internally” axis. The size of each point on the chart should grow based on “importance to the company.”  What you should end up with is something that looks like this:

Here’s how you should read this chart:

1. Sector 1: Low ability, low interest. These tasks should be outsourced to an agency, with priority put on the tasks that are critical to the business. Mission-critical tasks should be assigned to an expert agency, with results prioritized over the cost of the agency relative to other lesser agency options.

2. Sector 2: Low ability, high interest. In the short-term, these tasks should be outsourced, but you may want to create a parallel process that enables some of your team members to learn the requisite skills to eventually take these over, particularly if they are critical to the company’s success.

3. Sector 3: High ability, high interest. These should all be done by your in-house team, assuming you have the resources to manage all of these functions internally (if not, outsource the non-mission-critical elements).

4. Sector 4: High ability, low interest. Mission-critical functions should be handled by your in-house team. “Nice to have” functions should be outsourced, but only if outsourcing enables you to save money or free up your team to work on more important functionality.

Create A Win-Win For You And Your Agencies

Evaluating your team’s ability and interest to perform tasks enables you to create agency relationships that genuinely benefit both your team and the agency. It puts your agency in a good spot — feeling like they are providing value and complementing your internal team — and it also makes your in-house team feel great, knowing that you are using them for what they are strong at and enjoy.

Additionally, as your in-house team changes — either through growth or turnover — you can constantly re-evaluate your agency relationships to add or subtract services.

Happy agency, happy team, and great results — a win for everyone!

#digitalagencies