Weighing In-House Marketing Efforts Versus Third Party

In-house marketing vs third party, finding the right mix


How has the pandemic affected the shape of marketing teams? According to the 2021 State of In-Housing report from BannerFlow, it’s pretty much an even split in terms of how marketing teams shape up coming out of 2020. 

About 36% of teams are at a full digital competency model, or a marketing team with full digital ability with no regular external support needed. Around 33% have a marketing team assisted by specialized external agencies, and 30% have a hybrid marketing model: separate in-house agency set apart from the marketing team, with occasional contract work with other agencies.

Deciding what to in-house and what to keep with third-party marketing agencies isn’t always a decision guided by creative or inspirational juices, of course: 38% of those that had to decrease their headcount by up to five people also significantly decreased their agency spend since the pandemic, with both the in-house team and agency taking a hit, according to Bannerflow data. 

So, there’s the money factor. All told the report states that 32% of in-house teams have increased by one to two marketers, 32% increased by three to five marketers, 18% stayed the same, 16% decreased by one to two marketers and 2% decreased by three to five marketers.

In-House Marketing: Not “If” but When

Here’s what we definitely know: the way marketers work matters. Adobe spent $1.5 billion on software that supports it last fall. So marketers face the question of how to run their teams efficiently and effectively as customer shopping increases and the world loosens COVID-19-related regulations and social restrictions. What’s coming down the pike, and what’s the best makeup of a marketing team?

“I don’t think it’s a question of should you in-house some of your marketing, it’s really when should you and what. Those should be the bigger questions,” said Mike Brinker, Deloitte Digital’s performance marketing practice leader whose team addressed the matter in its March 2021 performance marketing report. “I think the days of being able to just outsource all your marketing are long gone for most organizations. … As marketers moved into digital many of them got stuck in that same kind of model where I’m just going to outsource all this, it’s all going to be done by somebody else, and I’m going to get some monthly, daily, weekly reports. And I’m going to trust them.”

That worked for a while. But data privacy wasn’t huge at the outset of digital. Now, though, with the pressure on marketing teams to have firm control over their customer and prospect data and comply with the sea of data privacy regulations, in-house marketing efforts are one sure way to better manage data on the first-party level. By 2022, the number of brands that fully outsource management of data is expected to fall by 52% compared to today, Deloitte Digital officials reported in March.

“You just can’t have an outside entity owning and controlling all your customer data and integrate it in a way that’s going to provide that customer experience, that end-to-end customer experience, in a seamless way,” Brinker said.

Related Article: Why Marketing Operations Got a Billion-Dollar Nod in Adobe-Workfront Acquisition

All Things Considered

In terms of “what” and “who” teams are bringing in-house, Bannerflow found content, media buying and design are the top skills marketing teams are in-housing. These in-housing efforts are leading to efficiencies in production, better time and attention given to the brand and greater control over brand messaging.

At the same though, Bannerflow officials found, the top three barriers for all brands to in-housing are:

  • Communicating the purpose of in-housing and gaining buy-in internally
  • Lack of knowledge around buying programmatically
  • Lack of funding to build a competent in-house team

Pros and cons aside, does the question of in-housing really come down to budgeting and resourcing? Are bigger marketing teams — think Coca-Cola’s or Sephora’s — blessed with simply being able to outsource whenever and whatever they like because of resources?

Brinker said he’s found no simple formula or patterns between large and small marketing teams in terms of what’s in-housed and what’s not. He works often with CMOs from many different-sized organizations and hasn’t found clear patterns. Small, scrappy marketing teams are in-housing out of necessity, while other larger teams are stuck in many ways with an outside agency because they’re too big to do it themselves but too small to have the budget to bring more resources in-house.

“Very few are exclusively in-housing,” he said. “Most are in some kind of hybrid where they’re doing a large portion of it but they’re still using agencies for specific areas.”

Running Fast With Trusted Agencies

One of the most important roles of the chief marketing officer is to constantly manage the program and administrative budget in order to invest where she can achieve the highest performance, according to Christy Marble, CMO of Pantheon Systems.

“Having run large multi-national marketing teams and small early-stage teams, there is always a budget ceiling of some sort,” Marble said. “Where and how you invest your marketing budget to achieve the highest outcome is an essential marketing strategy — and fluidly making trade-offs as markets, demand and priorities shift. Large marketing teams are in a better position to scale through in-house centers of excellence, shared services teams, but small agile teams can tap an outside agency to deliver a cross-functional center of excellence too. It can be a great way to scale when you are in hyper growth mode.”

In the hyper growth technology sector, Marble added, marketing leaders often need to tap trusted outside vendors in order to maintain the speed of innovation to keep up with their growth.

“Frequently,” she added, “the fastest option for us is to secure and onboard a trusted agency to ramp up a campaign or solve a data, process, integration or analytic challenge than it is to recruit, hire and on-board full-time employees. So we run fast with trusted agencies and once we have employees in-place then they take on the work in-house or in partnership with the agency. The agency becomes like an extension of our team.”

Related Article: 8 Tips for Building a Strong Relationship With Your Digital Marketing Agency

Great CX Skills and Servant Leadership Chops Are a Must

On an in-house marketing operations team, success will come if it includes marketers who have a keen sense for customer experience and servant leadership, according to Marble.

“In marketing operations, the decisions made about processes are everything,” Marble said. “How the tools are set up and who they are set up for determines how effective they will be. Are the marketers able to get the insights that they need to make decisions to improve program performance? Martech teams commissioned to achieve that are the lynchpin to successful marketing operations.”

Seeking Well-Rounded Generalists

From a skillset perspective, and especially when teams don’t have the budget for specialization, it’s better to hire well-rounded generalists early on, according to Agustín Rejón, head of marketing technology at B2B content marketing agency Velocity Partners. It’s important to remember, he added, the inherently multi-disciplinary nature of the marketing operations role; it’s a function that blends technical expertise with a creative, holistic approach to customer engagement.

“Most marketing operations professionals are used to — and enjoy — wearing many hats,” Rejón said. “So bringing this kind of talent in-house early can fast-track growth and set the foundation for a bigger, more specialized performance team.”

Supporting practices like content marketing and demand generation, marketing operations will take on the responsibility to orchestrate lead and customer communications while maintaining those campaigns and reporting on results and ROI, Rejón added. Over time, he said, this should be complemented with more specialized positions for key tactics like SEO, web and data analytics, campaign execution, email marketing and paid media.

Rejon sees the emerging role of the no-code operations manager, projected to be the next big role in tech, as factoring into the mix in terms of in-housing marketing. Supporting the need for companies to scale fast, no-code operations professionals are being asked to create internal processes and workflows for different departments — marketing, sales and even finance or HR — without reliance on IT or engineering support.

“This skillset,” Rejón said, “allows these teams to create internal processes without writing any code, just as marketing operations people have been doing for years, hence removing skills and speed as a limiting factor.”

Data Governance and In-Product Messaging Are Internal Pillars

What are common tasks most marketing operations teams keep in-house vs. common things these teams outsourcing? In-product messaging, experience and intelligence related to Product Led Growth (PLG) and the related test, learn and iterate motions are things that Marble of Pantheon likes to keep in-house.

“And when you have a really strong user experience and design team with the ability to constantly be collecting customer feedback on each test it is a really powerful rhythm for continuous performance improvement,” she added. “Having internal content marketers fully embrace the search engine optimization strategy and work collaboratively with the digital advertising and webOps team can have a powerful impact on digital performance. That is a long-term in-house strategy.”

Data governance and marketing strategy should be kept in-house as those are core functions that cannot easily or quickly be transitioned to another third party, according to Mike Remke, co-founder at Bonsai Data Solutions.

“Using a baseball analogy, the decision to outsource marketing operations should be used like a decision to go to the bullpen,” he said. “It makes good sense to use them for their specific set of skills for a given situation, but you would not let the bullpen pitch every inning of every game.”

Transparency and communication in the business relationship between agency and client are essential to make this work, Rejón said. “Agencies must ensure their clients can replicate the strategies they develop for them through detailed documentation, ideally in a written format, and an effective knowledge-sharing process,” he said. “This is particularly important in this new remote-first era.”

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