In this post, we answer two of the most frequently asked questions:
- When is an online marketing agency or advertising agency worthwhile?
- To what extent can a company do its own marketing?
This article is intended for executives, marketing managers, and sales operations. We often encounter these questions either in the start-up phase or in the course of restructuring and company growth. As already indicated, the answers are very individual, because it depends on the goals and needs of a company.
We approach the solution of the problem on the basis of typical case studies from the already outlined spectrum:
- Company foundation/start-up phase
- Growth phase/expansion
- Change process (e.g. in the course of digitization)
Marketing Agency vs. Do-It-Yourself Marketing
Case study 1: Starting a business – effective marketing for startups
A new company is founded. The founders of the startup plan to develop a new segment within a gap in the market, they want to establish a pioneer brand in the medium term.
The question “Outsourcing or not?” is posed for the first time by the founding team. Do they manage the tasks of the young company on their own or are investors brought on board?
A start-up on your own requires a high level of personal commitment in all areas, including marketing. As a rule, one of the founders is appointed as CMO 1 take over the marketing management and drive marketing strategically and operationally.
As a rule, a budget is already planned for this. The corporate identity is developed, a logo and a design guide are needed. A website is developed and the first advertisements are placed. All this does not require an agency and can be done by amitioned laymen. The one-off measures will soon be followed by regular marketing processes. The following pros and cons are to be weighed:
Arguments for marketing outsourcing in the startup phase
- The founders can concentrate on organization, value creation and cooperation.
- Good agencies have experience in planning marketing concepts “from scratch”.
- A fixed marketing budget for a well-known agency is easy to argue, e.g. to investors.
Arguments for setting up your own marketing department
- Marketing competence in your own company makes the company more independent.
- Short distances and spontaneously planned budgets ensure greater responsiveness in marketing.
- Start-ups in particular should develop their own in-depth knowledge of the market, customer, competition and product.
Case study 2: Companies in organic growth
Ballance and control are two important qualities that companies in growth markets or booming segments should unite. The growth of all business units must be balanced so that markets are served according to their possibilities and no gaps are presented to the competition.
In principle, there is no longer any decision for or against agencies at this stage. The mixture of in-house marketing and agency management is decisive for success. Marketing managers now decide in which areas agencies will deliver better results than their own teams. Typical areas that are almost always outsourced are market research, design, and certain disciplines of online marketing.
In this phase, the tasks of the sales and marketing teams change towards marketing strategy, marketing control and key account management. The marketing management sees itself as a growth hacker and strives to processualize scalable growth drivers. If this succeeds, then the company grows and various cost units and ultimately largely independent strategic business units emerge.
Case study 3: Marketing in the digital change process of a company
As a third and final case, we look at established companies that want to meet new requirements. A typical example of this is the transition of traditional family, industrial or commercial companies into the “digital age”. Such companies usually already work with advertising agencies that have served well in the print, broadcasting, PR, market research and digital channels in the past.
Digitalization means that data becomes more available and richer. Customer and cooperation partner data is centralized in data warehouses. All areas of the company face the challenge of relinquishing control over their data and having to extract the essentials from the wealth of merged data. However, the digital change process not only affects data communication, but also the type of internal collaboration.
Traditional agency cooperations are not automatically involved in this change, but must be consciously included. This is also a leadership process that management should encourage and steer. In the change process, the question is not whether agencies or internal teams take care of marketing, but how internal and external marketers work together efficiently and effectively.
Conclusion: It’s all in the mix!
In conclusion, it can be said that the individual decision must be made in every phase of a company’s life. Every company needs internal marketing controlling and must also determine the marketing strategy for itself.
Agencies come into play at various points. They provide strategic experience, can examine markets deeply, bring current incentives and understand customers and competitors. Internal marketing teams develop a deeper understanding of how to translate corporate goals into market activities and collect customer feedback. You can also cost-effectively implement the “daily business” of marketing.
The optimum of agency work and internal marketing must be redefined year after year. This leaves the only sensible advice for all companies that want to choose between agency and internal teams: The decision between marketing agency and marketing team is not a one-time thing, but belongs as a regular process in the marketing plan between budgeting and action planning.