In-house vs Marketing Agency Cost: Ultimate Breakdown

In one of his interviews, billionaire Mark Cuban said the two most common factors for business failure are bad budgeting and bad marketing. When it comes to weighing marketing agency costs versus DIY marketing or the economics of running an in-house marketing team, both of these factors overlap.

No surprise, then, that so many businesses get it wrong.

Data from the U.S. Bureau of Labor Statistics shows that 7 out of 10 businesses fail within the first decade, and most of those fail within the first 5 years.

So, businesses are like baby elephants — they’re both extremely vulnerable and face high survival risks in their early stages of life. The choices you make for your marketing can literally determine whether or not your business survives to become a big elephant. No pressure.

Fortunately, help is at hand. In this guide, we’ll break down everything you need to know about hiring a marketing agency versus managing your own marketing team: costs, pros, cons, heuristics for decision-making, and much more. Let’s launch your business to big elephant territory.

Does My Business Really Need a Marketing Agency?

Before allocating any resources (whether time or money) towards marketing, it’s crucial to align your efforts with clear business objectives. Here’s a step-by-step approach.

  1. Define Your Business Stage: Are you a startup seeking visibility, an established business aiming for expansion, or somewhere in between?
  2. Set Tangible Goals: Whether it’s a sales target, user acquisition, or market penetration rate, having clear metrics helps assess marketing needs.
  3. Understand Your Market: Recognize if your product or service caters to a niche audience, competes in a saturated market, or introduces an innovation.

Categorize your business based on its stage (Startup, Growing, Established) and market type (Niche, Competitive, Innovative). This will guide your marketing strategy’s direction and intensity.

Marketing Strategy Framework: Business Stage vs. Market Type Matrix

Business Stage Market Type
Niche Competitive Innovative
Startup A B C
Growing D E F
Established G H I
Table: Marketing strategy framework
  • A (Startup-Niche): Focus on community building, local SEO, and word-of-mouth marketing.
  • B (startup-competitive): Invest in differentiating content, influencer partnerships, and targeted advertising.
  • C (Startup-Innovative): Prioritize educational content, PR campaigns, and influencer engagements to introduce the innovation.
  • D (Growing-Niche): Expand community outreach, engage in partnership marketing, and consider loyalty programs.
  • E (Growing-Competitive): Strengthen brand positioning, optimize advertising for better ROI, and enhance customer engagement.
  • F (Growing-Innovative): Roll out version 2.0 based on feedback, focus on customer testimonials, and expand PR efforts.
  • G (Established-Niche): Cultivate brand loyalty, explore expansion opportunities, and optimize existing marketing channels.
  • H (Established-Competitive): Reinforce brand leadership, diversify marketing channels, and invest in market research.
  • I (Established-Innovative): Continue innovation marketing, focus on global expansion, and fortify brand reputation.

Using this matrix, you can pinpoint your position and get a general direction for your marketing strategy. Then delve deeper into the specific tactics and channels that align with your position in the matrix.

Do I Need a Marketing Agency for Business Growth?

Marketing isn’t just about running ad campaigns or deciding on promotions and discounts. It’s a recipe that involves strategy, tactics, and execution. Here are the two key factors you need to consider to figure out if you need marketing help:

1. Your Business’s Core Value Generator

Every business, especially in its nascent stages, has a core value proposition or a primary competency. This could range from product innovation in tech startups to exceptional customer service in retail businesses. The decision to outsource marketing or manage it internally should align with this core competency.

If marketing isn’t central to a business’s value proposition, then it might make more sense to outsource it, allowing the business to focus on its primary strengths. What stands as the primary value generator for your business?

2. Resource Constraints

New businesses typically operate with tight budgets and limited manpower. So, while marketing might be a critical need, they may often lack the expertise or resources to manage it effectively in-house. Outsourcing specific marketing functions can provide them access to expert skills without the overheads of hiring full-time employees.

Pros & Cons of In-house Marketing Team vs External Marketing Agency

As budding entrepreneurs and new business owners stand at the crossroads of their marketing journey, a pivotal question emerges: Should they navigate the complex landscape of marketing independently or seek the expertise of a professional agency? Here’s a refined perspective on this decision, tailored specifically for those in the early stages of their business venture.

External Marketing Agency: Benefits and Considerations

1. Aligning with Core Value Generation: If marketing isn’t central to your business’s value proposition, an agency can provide the expertise, allowing you to focus on your primary strengths. With their diverse experience from working with various clients, agencies can offer insights tailored to your specific business needs, be it for a local store or a tech startup.

2. Resource Realities: While engaging an agency involves costs, you get value beyond just the price tag. You gain access to a suite of marketing tools and diverse expertise without the commitment and overheads of full-time hires.

3. Scalability and Flexibility: As your business evolves, agencies offer the flexibility to scale your marketing efforts. You can adjust the scope of agency engagement based on your growth, without the long-term commitments associated with permanent hires.

The In-house Team or DIY Route: Benefits and Considerations

1. Core Value Integration: If marketing is intertwined deeply with your core value, managing it internally ensures you retain complete control. This way, every campaign, message, and strategy aligns closely with your brand ethos.

2. Cost Implications: Taking the reins of marketing can be cost-effective, especially if you or your team possess foundational marketing skills. However, it’s essential to factor in the non-monetary costs: the time and effort that could be diverted from your primary business functions.

3. Adaptability and Transition: Managing marketing internally offers adaptability. You can pivot strategies rapidly based on feedback or market dynamics. Moreover, many businesses adopt a phased approach, starting with outsourcing to learn from experts, then gradually transitioning specific functions in-house as they stabilize.

How to Know When to Hire a Marketing Agency

A business operating at full capacity (utilizing its resources fully to sell goods or services) may not need additional marketing. Unused capacity, indicating potential for increased sales, suggests a need for marketing, and an agency might be essential if the business lacks the bandwidth or marketing skills.

Here’s how to assess your readiness:

  1. Essential Marketing Skills: Rank your proficiency in areas like content creation, market analysis, digital tool usage, and campaign management. Use online quizzes or tools to gauge your proficiency.
  2. Tools at Your Disposal: Do you have access to essential marketing tools like analytics software, email marketing platforms, or design tools?
  3. Learning Curve: Identify areas you’re lacking in and estimate the time and resources needed to bridge the gap.

Explore platforms like HubSpot Academy or Google’s Grow resource center that offer free courses to help you elevate your marketing game.

Pro tip: Utilize budgeting tools or templates tailored for marketing. They can help in allocating funds efficiently across various marketing avenues without overshooting your financial capacity.

Decoding Costs: In-house vs Marketing Agency Cost

Any evaluation of cost is incomplete without also considering value; the two are quite distinct. For instance, a startup might find it cost-effective to manage social media content in-house but might lack the skills for PPC campaign management or advanced SEO. Here’s how to weigh both factors to arrive at a well-considered decision.

How Much Does a Marketing Team Cost?


Typically, salaries are the biggest cost involved in maintaining an in-house marketing team. Depending on the role and region, annual salaries in the U.S. vary greatly, ranging from $30,000 to $170,000 per year. The table below gives you accurate ranges for different roles.

Role Annual Salary Range
Marketing Assistant $28k – $40k
Marketing Coordinator $34k – $47k
Marketing Associate $34k – $51k
Marketing Specialist $38k – $56k
Marketing Analyst $43k – $63k
Marketing Project Manager $43k – $72k
Marketing Manager $49k – $82k
Marketing Executive $49k – $82k
Marketing Director $58k – $113k
Marketing Vice President $119k – $192k
PPC Analyst $34k – $49k
PPC Manager $37k – $56k
SEO Specialist $33k – $65k
SEO Strategist $39k – $59k
SEO Team Lead $40k – $73k
SEO Manager $51k – $78k
SEO Director $67k – $111k
Social Media Coordinator $30k – $43k
Social Media Specialist $33k – $50k
Social Media Analyst $35k – $56k
Social Media Manager $34k – $58k
Social Media Strategist $38k – $63k
Social Media Director $42k – $88k
Table: Typical salaries for marketing roles across the U.S. Source:

Tools & Software

Necessary for analytics, content creation, and campaign management. Monthly costs can range from $50 for basic tools to $1,000+, depending on the tool. The table below offers estimates of the median monthly cost per user for the different types of marketing tools that most businesses typically need. As you can see, the costs can quickly add up.

Type of Tool Median Monthly Cost per Licence
Social media management $50
Brand monitoring $250
Email marketing $115
CRM $600
SEO $300
Image editing $30
Layouting $10
Video editing $50
Table: Typical median monthly cost per user for different various marketing tools

Other Overheads

Overheads can include training and development, office space, utilities, benefits, and so on. Given that marketing is constantly changing, continual training is essential to keep teams updated. Training costs can average around $1,200 per employee annually.

Another cost is office space, which varies widely from $30 to $100 per square foot, based on where you are in the U.S. Most offices require about 150 to 175 square feet per employee. In other words, adding one to three employees to your team in marketing roles can mean a cost of $5,000 to $50,000 in monthly real estate costs alone.

How Much Does It Cost to Hire a Marketing Agency?

The cost of hiring a marketing agency largely depends on the extent of engagement. A specific task, such as a PPC campaign, might cost between $500 to $5,000 based on complexity, while a comprehensive partnership, overseeing various marketing aspects, can range from $2,500 to $20,000+ monthly.

It’s worth noting that agencies have varied pricing models, which can affect your costs:

  • Retainer: A fixed monthly fee, usually based on a package of services.
  • Project-Based: Pricing based on specific projects or campaigns.
  • Performance-Based: Costs tied to specific performance metrics.

Real Examples of Marketing Agency Cost

  • Content Marketing: Instead of a dedicated team, you might consider outsourcing content creation. A single high-quality blog post might cost between $50 to $500, while more extensive content like eBooks could range from $500 to $5,000.
  • Marketing Plan Development: If you’re unsure about your marketing strategy, hiring an external consultant to craft a plan might range from $1,000 to $15,000, based on depth and expertise.

By understanding the relationship between the scope of work and the associated costs, you can make more informed decisions about your marketing investments, ensuring you get enough value for your marketing dollars.

Fractional Marketing: The Best of Both Worlds

The mange-it-in-house-versus-hire-an-agency dilemma is a classic conundrum that most small businesses deal with. Fortunately, there is another way.

Fractional marketing teams have emerged as a compelling solution for businesses looking to bridge the gap between hiring a full in-house team and outsourcing to an agency.

By engaging with fractional teams, you can access a diverse set of high-level marketing expertise without the commitment of full-time salaries. This approach provides the flexibility of tailoring a team specifically to your business’s current needs, allowing for scalability and adaptability.

What’s more, you benefit from specialized skills for specific campaigns or projects, without the overheads of a large team. In essence, fractional marketing teams offer a cost-effective, dynamic, and expert-driven approach, combining the best elements of in-house and outsourced marketing solutions.

What to Do if You Can’t Afford a Marketing Agency (or Your Own Team)

Don’t give up. You still have options.

Many universities in the U.S. have business schools or management departments that offer guidance and assistance to new businesses and entrepreneurs, even if they’re not directly affiliated with the institution. This kind of outreach is often provided through business incubators, accelerators, or consulting programs. Here are some examples:

  • Small Business Development Centers (SBDCs): Funded in part by the U.S. Small Business Administration (SBA), SBDCs operate in partnership with universities and colleges across the country. They provide a wide range of business support services, including consulting, training, and research, to entrepreneurs and small businesses. Check out the SBA website for more on SBDCs.
  • The Anderson School of Management at UCLA has the Price Center for Entrepreneurship & Innovation, which conducts research and outreach activities. They often engage with the community and provide resources and events for entrepreneurs.
  • Harvard Business School: Through its FIELD program, MBA students often work on consulting projects for real-world businesses, providing insights and recommendations. Contact the FIELD program administrators to see if you can get assistance.
  • Stanford Graduate School of Business offers the Stanford Latino Entrepreneurship Initiative, which aids Latino business owners through research, education, and networking.
  • Michigan Ross School of Business at the University of Michigan operates the Zell Lurie Institute. The programs are intended primarily to help their students and alumni, but they often support local businesses as well.
  • Foster School of Business at the University of Washington operates the Consulting and Business Development Center, which provides consulting services to businesses, with an emphasis on those owned by minorities, women, and veterans.

Next Steps

You’ve thoroughly researched the pros, cons, and costs of a marketing agency versus an in-house marketing team. Whether you need help with digital ads, SEO, web traffic, conversions, or something else, SparkLaunch offers expert marketing assistance for as little as $400 a month.

Don’t let marketing be the thing that’s holding you back—schedule a completely free, no-obligation call to break your business out of its growth plateau in just 20 minutes.