Trying to decide what advertising tasks to keep in-house versus what to outsource to a third-party agency?
Launching a new ad campaign to promote a product or increase brand awareness for your small to midsize business involves accomplishing a lot of different tasks. So you might be tempted to outsource advertising to an external company. Or you might assemble an in-house ad agency to do all the hard work for you.
But how do you know whether an in-house advertising agency or an external one is best for what you need? To find out, learn more about each option and weigh the pros and cons of these agency types below.
What is an in-house advertising agency?
An in-house advertising agency is an advertising or marketing department within a business. These agencies cater to the advertising needs of their company by creating ad campaigns, finding the right channels to promote products and services, and completing other related marketing tasks. Internal agencies work exclusively for their company and don't outsource their services.
You can assemble an in-house ad agency by hiring a team of marketers to promote your brand to your target audience. Your in-house agency could consist of a brand manager, media buyer, content director, copywriters, graphic designers, and social media strategists. However, the roles you will have in your department depends on the size of your company and advertising needs.
Wondering about the differences between ad and marketing agencies?
The former is typically responsible for communicating with audiences. The latter develops a more comprehensive approach to an overall marketing strategy.
Pros and cons of using an in-house advertising agency
There are both pros and cons to using an in-house advertising agency. First, here are some of the pros:
Control
Keeping your advertising in-house gives you more control over your campaigns. While a third-party agency will adapt its services to your needs, you have more direct oversight over your internal team. You can also manage how different team members complete tasks. For example, if you want to modify something quickly in a print advertisement before publishing it, you can meet at the last minute with your graphic designer and resolve the issue without having to wait for an external agency's availability.
Communication
Communicating with an in-house advertising agency is more efficient. You can exchange information with everyone on your team throughout a campaign, resulting in more successful outcomes. For example, you can communicate with sales, marketing, customer service, and other departments quickly through your internal channels, which will usually consist of a project management (PM) tool, which keeps communication and collaborative efforts in one place.
Because you can freely communicate with your internal team members, everyone is on the same page when executing your advertising campaign, which will ensure your messaging is consistent and effective.
Brand knowledge
An in-house team will also have better knowledge of your brand than an external agency that works with several clients simultaneously. That gives you more control over the messaging you are communicating to your audience.
An in-house writer or marketer is part of your company culture and will better understand your values, objectives, and mission statement. That means they can create a more consistent brand message that achieves your advertising goals.
Now, here are some of the cons of in-house advertising agencies:
Cost
Assembling an in-house advertising team is almost always more expensive than delegating duties to an external firm considering you need to hire and pay the salaries of different team members who facilitate your marketing.
Depending on the scope of your advertising objectives, think about all the people you need in your in-house ad agency. You might require a sales planner, an account executive, perhaps two or three ad buyers, and so on. You also need to consider the cost of housing your internal team on your business’s premises if your company requires employees to work in the office.
Insulated from industry developments
An internal team consists of individual employees who have their own roles and responsibilities to fulfill, which usually means they won't have much time to keep up with all the latest advertising developments in your industry. As a result, your team might lack knowledge about the newest search engine, social media algorithms, advertising standards, and legislation.
Limited skill sets
Internal teams with limited skill sets are another one of the top reasons why brands outsource services.[1] A small or midsize business might hire entry-level employees to fill specific job roles because of the cost of assembling an in-house advertising agency. These team members might have a limited skill set compared to employees working for a large external advertising agency that works with multiple clients.
They might also struggle with tasks such as paid ads and content writing. Lastly, due to a lack of experience, internal employees with limited skill sets might miss advertising opportunities for your company which could mean decreased output.
What is an external third-party advertising agency?
An external third-party advertising agency is an alternative to using an in-house advertising agency. It involves delegating advertising responsibilities to a separate company that handles campaign ideas, campaign management, social media marketing, content creation, media buying, and other marketing tasks.
External agencies consist of managers, buyers, content directors, social media strategists, and other job roles that you will often see within in-house agencies.
Narrow your search for advertising agencies with our list of companies in the following areas:
Pros and cons of an external third-party advertising agency
Now you know the pros and cons of using an in-house advertising agency. But what about the advantages and disadvantages of outsourcing? First, here are the benefits of working with an external agency:
Lower cost
One of the top reasons companies use external agencies is because their budget restricts their ability to assemble an in-house team.[1] You pay an external agency a one-off cost or monthly fee for it to perform various advertising services.
This is significantly cheaper than paying for each employee in your in-house advertising department, and you also don't have to worry about providing office space for a third-party agency.
Experts
An external firm will have experts who understand your industry and target audience. These professionals work with multiple clients simultaneously and will be in-the-know about advanced marketing techniques that can take your brand to the next level. Many agencies specialize in a specific type of advertising that might benefit your organization depending on your marketing needs or strategies, including digital advertising, print advertising, and omnichannel marketing.
Access to the latest tools
Larger advertising companies have access to tools that small and midsize businesses might not have the budget for. These tools include advanced analytical software and expensive content management systems. With these technologies already in place, external firms can help you achieve your advertising goals and better manage your campaigns.
Now, here are some of the cons of working with a third-party advertising firm:
Little brand knowledge
No matter how much information you exchange with an external agency, it will never fully understand your brand as well as an internal team who knows your values, mission, and objectives like the back of their hands. A third-party agency with little knowledge of your brand won't be able to target your product or services as effectively.
Lack of control
Regardless of what an external agency claims, you will likely have to relinquish some control to this third party. The agency will take care of your brand's advertising roles and responsibilities, and as such, you won't have as much power over your marketing campaigns. Although you will obviously have a say in final decisions, be prepared to give up a degree of control for advertising outsourcing services.
Communication
You won't be able to communicate with an external agency like you can with an internal team because you might have to make an appointment with their representative rather than speaking to someone in your in-house advertising department. If a third-party agency has several clients, it might not reply to your messages immediately, which will make it difficult for you to efficiently execute on your marketing campaigns.
Should you choose an in-house or external agency?
As a small or midsize business, you can either outsource advertising duties to an external firm or assemble an internal team. Both have pros and cons, meaning you'll need to choose a method that best suits your business model, budget, and the amount of control you want to have over your campaigns. You also don't have to choose one or the other. You could outsource some advertising jobs to a third-party agency and keep other tasks in-house, which provides the best of both worlds.