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An in-house employee may understand your business more closely, while a marketing agency can provide access to specialists across several marketing channels. Neither option is automatically better for every company.
If you own a local or regional business, you’ve probably had the same internal debate three or four times by now: Should we hire someone in-house to run marketing, or should we hand it to an agency?
What Is the Difference Between In-House and Agency Marketing?
In-house marketing is handled by employees who work directly for your company. Depending on the size of the business, this could mean one marketing manager or a larger department with specialists in areas such as:
- Search engine optimization
- Paid advertising
- Content marketing
- Social media
- Email marketing
- Graphic design
- Analytics
With an agency, these services are provided by an outside company. Instead of hiring separate employees for each channel, you pay the agency to manage some or all of your marketing.
When comparing a digital marketing agency vs. in-house marketing, the main difference is how the talent is structured. An internal team gives you dedicated employees, while an agency gives you access to a broader group of specialists.
In-House Marketing vs. Agency Costs
Cost is often the first concern businesses consider, but salary and agency fees are only part of the comparison.
Costs of an In-House Marketing Team
Hiring an internal marketer involves more than paying a salary. Businesses may also need to cover:
- Benefits and payroll taxes
- Recruiting and onboarding
- Marketing software
- Training and certifications
- Design and reporting tools
- Outside contractors
- Additional specialist hires
An agency retainer may look expensive when compared with one employee’s salary. However, one employee may not be able to provide the same range of skills as a team of SEO, paid media, content, design, and analytics specialists.
How Much Does an In-House Marketing Team Cost?
The cost of an in-house team depends on the roles, experience levels, and services the business needs.
The following table provides broad U.S. planning estimates. Actual costs vary by location, seniority, industry, company size, and benefits.
Estimated Cost of Building an In-House Marketing Team
Let’s put numbers to it. These are fully-loaded U.S. figures pulled from current industry data not just base salary, but the actual cost of getting marketing done.
Most local and regional businesses will not hire all six roles at once. They may begin with one marketing manager or generalist and rely on freelancers, software, or an agency for specialized work.
The challenge is that hiring one person does not eliminate the need for those other skills. A marketing manager may be able to coordinate SEO, paid advertising, content, and reporting, but it is difficult for one person to be an expert in every channel.
Additional In-House Marketing Expenses
Salary is only one part of the cost of building an internal team. Businesses may also need to pay for:
- Payroll taxes and benefits
- Recruiting fees
- Employee training
- SEO and competitive research platforms
- Reporting and dashboard software
- Design and video tools
- Call tracking
- Customer relationship management software
- Marketing automation
- Freelancers and consultants
A smaller marketing technology stack may cost several hundred dollars per month. A business using advanced SEO, analytics, attribution, automation, design, and call-tracking tools may spend considerably more.
These expenses should be evaluated separately so they are not counted twice within employee compensation estimates.
How Much Does a Marketing Agency Cost?
Agency pricing depends on the services included, the size of the account, the experience of the team, and the amount of work required.
Agencies may charge through:
- Monthly retainers
- Fixed project fees
- Hourly consulting fees
- A percentage of advertising spend
- Performance-based pricing
- A combination of these structures
A single-channel agency may only manage SEO or paid advertising. A full-service agency may provide strategy, campaign execution, content, creative, tracking, website support, and reporting.
Because the scope can vary widely, two agencies with similar monthly fees may provide very different levels of service.
Businesses should ask what the fee includes, which services cost extra, and whether advertising spend is separate from management fees.
In-House vs. Agency Marketing Cost Comparison
The following table shows how common marketing models may compare. The figures are broad estimates and should not be interpreted as guarantees.
Estimated Cost of Common Marketing Models
The key is to avoid comparing an agency retainer with one employee’s salary without considering what each option provides.
A more useful comparison looks at:
- The number of channels being managed
- The level of expertise provided
- The expected monthly output
- The software included
- The speed of implementation
- The management required from the business
- Whether strategy and reporting are included
- The business results each model is responsible for supporting
An agency generally costs less than building a complete in-house marketing team. However, an agency does not provide six full-time employees dedicated exclusively to one client. The real value of a marketing agency comes from shared access to specialists, systems, and technology.
Is an Agency Cheaper Than In-House Marketing?
An agency is usually less expensive than building a complete in-house marketing department.
For example, a business may hire an agency to manage SEO, paid advertising, content, and reporting instead of employing separate specialists for each function.
However, an agency is not always cheaper than hiring one junior employee or marketing coordinator.
The more useful question is whether one employee can provide the skills and work the business requires.
An in-house employee may be more cost-effective when:
- Marketing needs are limited and predictable.
- The company only needs support with a few basic tasks.
- Leadership already has strong marketing experience.
- The employee will have enough consistent work to justify a full-time role.
An agency may provide better value when:
- The business needs several marketing specialties.
- Campaigns require advanced software and reporting.
- The company cannot justify multiple full-time salaries.
- The business wants to begin campaigns without building a team first.
- Marketing needs change throughout the year.
Comparing One Employee With an Agency Team
One common mistake in an in-house marketing vs. agency comparison is placing one employee’s salary beside an agency retainer without considering the difference in scope.
A full-time employee gives the business dedicated working hours and direct access. However, that person may have limited experience outside their main area of expertise.
An agency provides access to a wider team, but those specialists divide their time across multiple clients.
Neither model provides unlimited resources. The comparison should focus on:
- The work the business needs
- The channels being managed
- The expertise required
- The expected monthly output
- The amount of internal oversight needed
- The tools included
- The time required to begin
- The results each model is responsible for supporting
How Software Affects In-House vs. Agency Marketing Costs
Marketing software can significantly affect the total cost of an internal team.
An in-house department may need separate tools for:
- Keyword research
- Competitor analysis
- Rank tracking
- Paid media management
- Call tracking
- Design
- Email marketing
- Automation
- Customer relationship management
- Reporting and attribution
An agency generally spreads the cost of these tools across multiple clients. Access to an established software stack is another one of the potential benefits of hiring a marketing agency.
However, businesses should confirm which platforms are included. Some agencies charge separately for call tracking, reporting software, landing page tools, or other technology.
Which Marketing Model Offers Better Value?
The answer depends on the size and complexity of your marketing program.
One employee may provide better value when the business needs dedicated help with a manageable list of daily tasks.
An agency may provide better value when the company needs strategy and execution across several specialized channels.
A hybrid model may also work. Under this structure, an in-house marketing manager oversees the brand and internal priorities while an agency manages areas such as SEO, paid media, content, and reporting.
This allows the company to maintain internal ownership without building an entire department.
Questions to Ask Before Comparing Costs
Before making an in-house vs. agency marketing decision, answer the following questions:
Which services does the business need?
Identify whether you need support with one channel or several. The more specialized services required, the more expensive it may be to build the team internally.
How much work needs to be completed?
Consider the number of campaigns, advertisements, website pages, blog posts, reports, and creative assets required each month.
Will additional support still be needed?
An in-house employee may still need freelancers, developers, designers, or agency support. These expenses should be included in the total cost.
Which expenses are included?
Determine whether the estimate includes benefits, software, advertising spend, creative production, website work, and reporting.
How much management will be required?
Employees require hiring, training, daily oversight, and performance management. Agencies require communication, feedback, approvals, and internal coordination.
Choosing Between In-House Marketing and an Agency
The choice between in-house marketing vs. agency support should not be based only on the lowest salary or retainer.
An internal employee provides dedicated attention and close involvement in daily operations. However, creating a team with specialists across several marketing channels can require a substantial annual investment.
An agency can provide access to a wider mix of experience for less than the cost of building a complete department. Still, businesses should carefully review the services, hours, and deliverables included.
When making a digital marketing agency vs. in-house comparison, focus on the total cost required to produce the results your business needs.
BidWaves works with local and regional businesses that need specialized digital marketing support without the cost of creating a full internal department. Engagements begin at $1,500 per month and are customized around each company’s goals, market, competition, and required services.
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