Survey : Cost of having an in-house marketing team vs marketing agencies for SMBs
arrow_back Marketing Reports

Survey : Cost of having an in-house marketing team vs marketing agencies for SMBs

Published on: 07 Sep 2022 | Author: Sortlist


In this Marketing Report:

Sortlist recently published a 2021 Marketing Survey on budgets, trends, and inspiration for SMBs.  We asked almost 500 owners and general managers of small and medium-sized businesses across five European countries for their marketing strategies in 2021. Our goal in this article is to evaluate these trends and whether the intended budgets would benefit from an in-housing strategy or to seek help from an outside marketing agency

Decrease

The majority of SMBs surveyed are looking to decrease their budgets in 2021

14.8%

of SMBS have an adequate amount of employees in their in-house marketing team

50%

Hiring a marketing agency is almost 50% more cost-efficient than an in-house marketing team

Save $170,000 A Year On Your Marketing Team With This Top Tip

Pandemic Impact on Marketing Budgets

Every year, businesses analyse their marketing needs and allocate a budget in hopes that it will cover all costs.  In 2021, many businesses have had to plan their budgets differently to deal with potential financial burdens caused by the Covid-19 pandemic.

Pandemic impacts on marketing

A year into the epidemic, only 23.7% of small and medium-sized businesses (SMBs) in Sortlist’s core market – Belgium, Netherlands, Germany, France, and Spain – stated that their marketing budgets would increase in 2021.  With 19.7% stating that no final budget had yet been decided, and 7.4% their budgets would remain unchanged, this revealed that 47% of SMBs surveyed were forced to decrease their spending.

Although the Covid-19 pandemic has shaped marketing investments relatively differently in each country (read more about it here), the mode answer of each country was a decrease in budget.

What do Marketing Budgets Look Like in 2021?

How much are you going to spend on marketing in 2021?

Across each of these countries, at least 60% of SMBs are looking to spend between 1001 – 100,000 euros in 2021 with the exception of Belgium (55%) and France (58%).

Budget marketing 2021 International

Between only 4 and 14% of the surveyed SMBs are willing or able to invest over 100,000 euros.

With an average of only 7.75% of businesses sticking to the same marketing budget as the previous year, the majority of SMBs surveyed will have to restructure their marketing tactics to optimise their revenue.

Businesses will have to make decisions on whether certain projects will be in-housed or better-taken care of by a marketing agency as part of their financial restructuring.

France

In France, results of their marketing investments for 2021 are directly correlated with the results of the Covid-19 impact.  With 60% of French SMBs revealing they were going to decrease their marketing budget, only 4% have a budget higher than 100,000 euros.  Additionally, they are the market with the most amount of SMBs looking to spend below 1000 euros with 31%.

Budget marketing 2021 France

The Netherlands

The Netherlands observed the same statistics but in the opposite direction.  As the country with the highest percentage of SMBs increasing their marketing budget in 2021 (30%), they are the country with the most amount of businesses budgeting over 100,000 euros (14%) this year.  They are also the country with a fewer amount of SMBs looking to spend less than 1000 euros (12%).

Budget marketing 2021 The Netherlands

In-House vs Agency

When a business develops an idea for a marketing project, they have to consider the members of the in-house team that will undertake it.  They may already have the necessary human and technological resources at hand within their company, but that is not always the case.  If they don’t, they can either build/expand their department or look into outsourcing the project to an outside agency with all the necessary marketing tools.  Nevertheless, having adequate human and technological resources does not guarantee a successful marketing in-house team.

Let’s look at the relative costs of having an in-house marketing team vs hiring a marketing agency.

In-House Marketing Team

*estimation of benefits and taxes come from REQ

On top of their base salaries, an internal marketing team requires resources such as office space, stationery, adapted technology, and software.

In-house marketing team

Marketing Agency team structure 

Within a marketing agency, a team is usually comprised of the following members:

  • Marketing Analytics Specialist
  • Public Relation Manager 
  • Graphic Designer 
  • Web Designer 
  • Front-End Web Developer 
  • Content Manager 
  • Social Media Manager 
  • Copywriter 
  • SEO/SEM Specialist
marketing agency

Advantages of working with a Marketing Agency

With a marketing agency, businesses can develop singular projects, or have a working annual contract to work together on a regular basis.  They can also pick and choose the various services they wish to hire help for e.g. paid advertising but not brand awareness.

Marketing agency pricing

According to the Business website Sisu, these are the average costs for services within a marketing agency in the US:

  • Social Media cost: 3500$/month 
  • Paid Social: 4500$/month 
  • Content: 5200$/month
  • Strategy: 3400$/month 
  • Website: 4500$/month 
  • PPC: 6000$/month 
  • SEO: 2000$/month 

Hiring a marketing agency or an in-house team?

The total average cost in a year, if a company were to require each of these services (one-time marketing strategy and website build): $258,700.

Total average cost marketing agency

Some agency pricing depends also on add additional costs such as a monthly retainer contract and additional tools required for research, however, these prices are usually included in the overall service package.

SMBs in context

How many people at your company work full-time in marketing?

The average number of surveyed SMBs with more than 5 full-time marketers within their in-house marketing department was at 14.85% with as low as 11% in Belgium. 

FTE marketing team

The most common number of employees working in marketing was three, with yet again the exception of Belgium with 26% of surveyed SMBs responding with only one full-time marketer.

Where do the human resources for your marketing come from?

Additionally, to the number of full-time marketers working in-house, we asked our SMBs where the human resources for their marketing come from.

Human resources marketing team

Less than 50% of all countries responded that their marketing projects come from in-house employees, with the lowest being the Netherlands with 36.5%.

An average of 30% of SMBs use the help of marketing agencies.

With only 14.85% on average of SMBs having the ideal number of employees (5+) working in their marketing department, and only 30% of them requesting help from an outside agency, this means that at least 50% of SMBs are losing some potential.

Pros & Cons: In-House Marketing vs Marketing Agency

In-House Marketing: Average price per year 414 585$

Pros of in-house marketing

  • Thorough understanding of team and projects
  • No other companies competing for time or attention
  • Available during all working hours
  • Marketing team has access to all other departments for help
  • Control

Cons of in-house marketing

  • Lack of consistency in quality and deliverance of work
  • Training time is limited or non-existent 
  • Innovation of ideas is limited
  • Salaries
  • Extra expenses (office space, software…)
  • Capabilities are limited
  • Employee turnover

Agency Marketing: Average price per year 258 700$

Pros of working with a marketing agency

  • Specialised set of skills
  • Innovative
  • Quickness of work
  • Consistency
  • Capabilities
  • Up to date software and required tools
  • Cost

Cons of working with a marketing agency

  • Higher short-term costs
  • Meetings
  • Limited communication
  • Location
  • One of many clients
  • Little control
Pro and cons in-house marketing

What Money Can or Can’t Buy You

If we take a look at the pros and cons of both these marketing strategies, we can say that money can buy you exclusivity and control.

If a business has the necessary funds to afford in-housing a team of marketers, they may feel more in control of their projects and finish them faster.  However, the end result is at risk of not reaching its full potential due to a lack of experience, tools, and innovation.

Hiring a marketing agency may seem like throwing a project to strangers and praying for a safe return, but it’s almost guaranteed to be in good (and even better) hands

Final Thoughts

The Covid-19 pandemic has left a huge mark in the business world.  A portion of SMBs have been able to make it through this difficult time, but almost all of them are facing financial hardships.  Businesses are having to restructure their marketing budgets and look to different options to ensure results.  A marketing agency could be the solution to their problems, with lower cost, and higher work efficiency.

If you are looking for a marketing agency, take a look at the variety of Sortlist partners who are ready to help. We are located in over 80 countries around the world including the USA, and the United Kingdom

Featured in

Sortlist story

About Sortlist

Sortlist is Europe’s largest B2B marketplace in the marketing industry. Its goal is to connect companies with marketing and creative agencies that fit their needs. Today, Sortlist has offices in seven countries.

close

Access our exclusive content!

email