Online Marketing Outsourcing: When To Outsource, When To Do It In-House

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You’re responsible for online marketing for your company. You’re not sure whether you should hire an SEO firm, learn to do the work yourself, or put together an in-house team to handle it. Your job, perhaps your career, depends on getting this decision right. What do you do?

There is no one right answer. Sometimes it makes sense to have an in-house team, sometimes it makes sense to outsource, and sometimes it makes sense to do the work yourself. Sometimes it makes sense to use some combination of two or more options. But before we dive in, let’s make sure we’re on the same page about some terms. When I talk about online marketing I mean search engine optimization (SEO), pay-per-click or PPC management, web design, online PR, content marketing, brand journalism, email marketing, mobile marketing, or any of the other buzzwords going around these days. In this article I may use some of these terms interchangeably.

I’ve run an online marketing firm since 1999 and have worked with hundreds of clients. I’ve seen companies outsource online marketing, do it in-house, switch back and forth, or hire in-house talent for general tasks while outsourcing specialized ones. I wish I could tell you that based on my experience you should always outsource in Situation A, but always take it in-house in Situation B, but I can’t. Each situation is unique, and making the right decision doesn’t depend solely on the facts today or tomorrow, but conditions on the ground one year, two years, and three years from now. It’s not just about your industry, your location, your financing, or your business model–it’s all those things and more. While I can’t give you a quick answer that will resolve the challenge you’re facing, what I can do is help you make sure you’re considering some of the most important criteria. With that introduction, here are three areas to consider before deciding whether to outsource your online marketing or do it in-house.

Budget and Costs

How much does it cost to do your online marketing in-house vs. outsourcing, not just in terms of cash but time and headache as well?

Let’s talk about cash and outsourcing first. If your online marketing budget is less than $200 USD per month then you do not have the budget necessary to outsource. With extremely rare exceptions, anyone who tries to sell you SEO or any form of online marketing service for a few hundred dollars a month, promising you all sorts of business from it (and if they’re promising anything else, why are you paying for it?) will either take your money and do virtually nothing for you or they are going to lose money and go out of business. Many of the online marketing firms operating at this price level are scam operations. Their business model consists of hiring very good sales people to get you signed up, locking you into a contract you can’t get out of, and then doing nothing for you. They develop relationships with businesses, such as phone book companies, that have access to lots of small business owners, and they set up telemarketing phone banks to get as many of these owners signed up as possible. Client turnover is high, but when they’re not providing much of any service and they have an endless stream of suckers, they can afford to offer high sales commissions and still be quite profitable even if they only keep each client for a few months.

Outsourcing an effective online marketing campaign will cost you at least $3,000 per month, and your competitors may be spending several times that. Where there are exceptions, they will be in niche industries where there are low levels of competition, or industries that are highly localized like landscaping, dental offices, or self storage.

The cost of hiring an in-house SEO professional worth his or her salt will run at least $50,000 per year, including benefits and overhead. That’s for an entry-level SEO professional, wet behind the ears, with a few months of experience. An experienced SEO professional with two to three years of experience will run you around $70,000 in the most affordable markets, and where the cost of living is higher, you can expect to pay even more. A true SEO expert, with substantial experience, will cost you a minimum of $80,000 and as much as $150,000 per year. Surveys on salaries for SEO types like these might lead you to believe you can hire a great SEO professional for $30,000 per year, but you can’t. Someone who is doing SEO for $30,000 per year, in the United States, is either incompetent or underpaid. If the former, then you won’t get the results you want. If the latter, it won’t be long before you have to double his salary in order to keep him or see him get hired away. More detail on what you can expect to pay an SEO professional here.

It’s also important to note that hiring a single employee will likely not be enough. Running a successful online marketing program usually requires a team of 2-3 individuals, and thus the cost of recruiting a quality in-house team can easily run from $200,000 per year on the low end, to more than $300,000 per year for a more expert team. Thus until the fees you would pay an agency exceed $15,000 per month, it doesn’t make sense to even consider building an in-house team, although there are certain to be exceptions.

Outside the cash involved, hiring a person means a lot more than just paying a salary. The translation of “No man is an island” into business-speak means that in addition to a salary, hiring an employee also means dealing with paperwork, training, taxes, health care, vacation days, sick days, mood swings, and dress code violations. If you’ve got all those processes worked out at your company then it’s no big deal. If the headache of managing one more employee will distract you from more important tasks, then take that into consideration.

Business Model

Is online marketing a critical part of your business model? By “critical” I mean if you get it wrong, will your company fail? If you’re an online retailer doing at least a few to several million dollars in sales per year, and your entire business model depends on how you execute your online marketing strategy, then you’ll be more likely to need some sort of in-house team. Even if you’re a home-based business, you’ll want to learn some SEO if your entire business depends on it. If it’s mission-critical for your business, online marketing has to be something you get educated about and get involved in.

If your business model is not entirely dependent on online marketing, then there is less reason to do your SEO and other online marketing work in-house. But even if online marketing is critical for your business, that doesn’t make building an in-house team or doing it yourself a no-brainer. In many cases you’re better off focusing on your core competency for the same reason I don’t do my own oil changes on my car, even though I can–I can make more money with that time than I can save by doing the work myself.

Availability of Required Expertise

If, as noted above, you have no budget, but you still need to do online marketing, then your only choice is to go in-house and that means doing it yourself. If you don’t have the required expertise then you need to learn it. Get started by reading Moz’s free Beginner’s Guide to SEO. If that’s too daunting, then do this one thing–set up a corporate blog and start telling stories. There are plenty of guides out there, and I recently detailed my experiences relaunching my personal blog which may be of help to you. Online marketing expert Bruce Clay’s website states, “Every site in the industry could receive a healthy boost in the search engines simply by posting regularly to a company blog. So why haven’t you started one yet?”

If you have the budget to hire someone in-house and decide that route makes sense for your business, you may still have trouble finding the right expertise in your area. In Hong Kong where I live there are very few individuals with SEO experience, whereas in Utah, where my firm is headquartered, there are plenty to choose from. This is due to many large SEO firms such, OrangeSoda, and Boostability being based there. These companies hire fresh college graduates, train them, and over time this has grown a substantial base of experienced professionals.

You may experience the same challenges hiring a firm as you do hiring an individual. For the same reason Utah has a lot of SEO professionals it also has a lot of SEO firms, as employees have left larger firms to start their own consultancies. Even though Hong Kong has a population several times larger than that of Salt Lake City, along with easy access to the largest populations in the world, its SEO industry is quite undeveloped. This is due to most smart, young people here choosing to go into banking or real estate. To build an in-house online marketing team in Hong Kong would likely require training that team rather than hiring it.

You can always outsource or hire long distance. My firm has clients neither I nor my team have met in person. We make do with phone, email, video conferencing, and other tools. You can also hire and manage “in-house” talent long distance. While it’s understandable if it makes you a bit uneasy to work with people you can’t see face to face, being open to working long distance increases the expertise available to you.

There is no easy answer for when you should do your own online marketing in-house rather than outsourcing it. You’ll need to do your research and consider all the relevant factors. I hope I’ve given you information that will be helpful as you make that decision.

Online Marketing In Practice

It’s one thing to talk about how to do your online marketing, but sometimes it can be helpful to see an example in action. When I opened my office in Hong Kong, I hired Compass Offices to provide a business address, phone number, and basic secretarial services. I had the chance to peek inside the process as Compass put together a recent email newsletter, and I was impressed how hands-on the staff was. As I have watched them I assumed they were doing most or all their online marketing in-house, and asked them about their experience for this article. David Smalley, the Marketing Manager at Compass (not the punk rock icon, although I did have my hopes up for a few moments when David first contacted me via email), sent me this response:

At Compass Offices we have are very focused regarding our online marketing efforts. We are not experts in online marketing so we outsource our PPC and SEO efforts. Even though it’s all outsourced we are very hands on with the management of each campaign to ensure our ROI is maximized. It’s very easy to spend money, especially with paid search, so we ensure that our vendors are educated about our products and target audience. This allows them to make informed suggestions regarding strategy. We are always keen to work with people that understand our industry and this has been key to ensuring our marketing is successful. Our ads and campaigns are executed based upon insight, not guesswork, and managed on a daily basis. With this focused approach we can learn what works and what doesn’t in real time and adjust our focus accordingly.

There you have it. Outsourcing doesn’t necessarily mean losing control, nor being out of touch with what’s going on with your marketing.

Are you with a company that has run a successful online marketing campaign? Did you outsource, do it in-house, or use a combination of the two? What other areas of consideration would you add to this list? What questions do you have about outsourcing or going in-house with online marketing that haven’t been answered?


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