Outsource, Hire or Blend: Deciding on the Right Marketing Org Structure

When a company is looking to invest in marketing—whether for the first time or to embark on a more comprehensive marketing initiative—the question of when to hire versus when to use an outsourced marketing company inevitably crosses the minds of business leaders. There are numerous considerations based on a company’s stage, go-to-market model, and the type of marketing needed to support the business.

Once a new marketing need is identified, many companies have a natural tendency to want to hire in-house, but there are definitive scenarios when other solutions can prove to be more beneficial. Companies can go three routes when determining how to organize their marketing: hiring all staff in-house, outsourcing the entire function, or building a hybrid solution.

The hybrid model works well in multiple situations. In scenario one, a senior in-house marketer is hired who can help drive company strategy but then outsources program management and execution support to agencies or contractors. In scenario two, a junior or mid-level marketer is hired who can lead basic marketing tasks and program manage the relationship with an outside provider for the more strategic or specialized skills.

All three of these routes can work, but knowing what’s right based on a company’s current stage and marketing needs is critical, and the key is to pick the path that brings the right resources to the table in a cost-effective manner.

Magnetude recently published an eBook called “Staffing Up for Growth: Outsourcing vs. Hiring In-House Marketing Talent” that gives more in-depth look into which approach would be best for your company’s unique needs.

Below are a few of the highlights from the eBook.

Stage of company

The marketing needs of a company change as a firm evolves. Early-stage companies in particular are in a constant state of flux—prioritizing target markets, building out a successful go-to-market model, and understanding the marketing mix needed to achieve results. The marketing needs of a company first getting ready to scale are very different across the various stages in that 6-24 month window. Experienced startup leaders are generally well-versed in managing the dynamics and outsourcing the marketing expertise they need to implement. But many companies spend too much of their marketing budget on hiring in-house staff and then find they don’t have sufficient resources to execute against business objectives. No single person has all of the skill sets needed for companies at this stage, and it’s critical to leave room in the budget for program costs such as events, advertising, tools and software, and other marketing expenditure.

Firms at this stage can often benefit from outsourcing through the early stages, until their business matures and they require a narrower set of marketing skills in order to succeed.

Similarly, established companies who haven’t invested in strategic or integrated marketing in the past tend to have comparable needs to that of an early-stage firm where the marketing skills needed are still broader than the skill sets of a single marketing individual.

On the flip side, a firm that already has a proven model for generating marketing leads in a scalable, predictable manner can benefit from hiring a mid-level marketer who can heavily dedicate themselves to this effort. In those cases, a full-time hire can be more cost effective and outsourced support might only be needed for more tangential or specialized needs, such as search marketing, web development, or public relations.

Type of marketing support needed

A consideration that is often overlooked is an examination of the type of marketing a company needs to be successful. What is the role marketing is expected to play in driving the business forward?

• Is marketing viewed as a competitive advantage? Marketing can drive significant competitive advantage. For companies who truly understand that, many will make the appropriate investments in hiring best-in-breed marketing talent both in-house and outsourced. But even firms that don’t view marketing as one of their competitive advantages needs to ensure they don’t get out-marketed by the competition and at least do what’s needed to keep pace.
• Are the skills needed to meet business objectives specialized or more generalized?
  Does your marketing require mainly tactical activities that rely on a fairly narrow skill set that a single person can deliver? Or do you need a broader range of skills and programs to market effectively? The complexity of today’s marketing and business environment requires most firms to employ an integrated mix of marketing activity.
• Is your business undergoing change or exploring a strategic shift? If a business is evolving its offering, expanding or altering its market focus, or exploring new strategic directions or market positioning, the marketing needs are likely to change dramatically. Companies undergoing these shifts require marketing expertise that can rapidly toggle from strategy to execution in order to effectively work through the cycle of strategize, plan, build, pilot, optimize and scale.
• How much marketing does your company need? Whether the answer to this is driven by true need or simply by financial capacity, budgets can help determine the appropriate hire. Not all companies need 40 hours a week of marketing support, especially if it means not having sufficient budgets for paid expenditure.

Other factors must also be taken into account, such as a company’s growth model (how rapidly is the company looking to scale?), the business environment (how dynamic or predictable is the industry or market landscape?), and the broader organizational structure (how will marketing need to interact with the rest of the organization?).

What we see in the market

The bottom line is that multiple approaches can work and the ultimate decision boils down to the company’s strategy, tactical needs and financial resources. We have clients who were set on hiring in-house before bringing us on but simply couldn’t find a single person who had all skill sets they needed. We have other clients who knew they were looking for a full-service, fully outsourced partner. And we also know many firms who choose to hire predominantly in house with minimal outsourced support.

For a more in-depth look at which approach would work best for your firm, download our eBook, “Staffing Up for Growth: Outsourcing vs. Hiring In-House Marketing Talent”.

Or, feel free to drop us a line and we can tell you more about Magnetude Consulting’s unique model to see if it’s a good fit for your needs. We work as our client’s fractional or outsourced marketing department, breaking the traditional agency mold and providing the value of an in-house team with the expertise and breadth of experience of a full-service marketing agency.