The rough, back-of-the-napkin math seems easy enough.
What do you come up with when you look at the costs for a CMO and a small team of salaried employees to support your goals? You assume a few hundred thousand at best.
Perhaps all you need is a Marketing Manager. But will this really cover your needs?
Whether you have a small, growing business or an established company looking to expand, you need to think about how your marketing should be handled and what’s the cost to do the job right.
We’ve done the real math so you don’t have to.
How much does building an in-house marketing team cost?
Businesses typically require marketing support that includes strategy, SEO, paid digital advertising, social media, design, development, management and reporting. This covers most of the bases from brand strategy to website design and driving conversions.
A Chief Marketing Officer is required for your strategy, planning and management. However, even if you skip this expense, at a minimum you would need to hire a marketing/SEO manager and a social media manager – and then likely outsource most of your design work at an added cost.
The average salary for a Digital Marketing Manager in Austin, TX is $98,790.
The average salary for a Social Media Manager in Austin, TX is $45,071.
If you incorporate outsourced graphic design and a Chief Marketing Officer, whose salary could range from $100,000-$300,000, your total labor costs alone could range from $250,000-$450,000 per year.
But wait. There’s more.
Along with salaries, you must factor in health benefits, workers compensation, paid time off, recruiting and on-boarding costs, and marketing tech stack/toolset.
If you prefer to manage your team in a central location, your overhead costs will include office space, desks, chairs, computers, office supplies, break room supplies, cleaning, and general liability insurance.
Where does that leave you?
Once all the real costs are tallied up, building a team of in-house marketers could set you back by upwards of $500,000 per year – possibly twice that amount depending on the depth and experience of your bench.
These numbers don’t even include your budget for advertising.
How much does hiring a marketing agency cost?
Not as much as you’d think.
Most agencies provide services based on two pricing models: Project-Based or Retainer-based.
The average retainer to secure the services of a marketing agency is approximately $6,000 a month. Naturally, this varies depending on your business size, type and needs.
Depending on the average hourly rate for services, for $6,000 a month you can expect to receive approximately 40 hours of dedicated access to marketing experts with decades of combined experience.
Here’s an example of how 40 hours a month might be used:
- Digital Strategy – 4 hours
- SEO (data collection, analysis, and strategy) – 6 hours
- Paid Ads (setup, management) – 10 hours
- Content Strategy – 2 hours
- Social Media – 6 hours
- Design – 4 hours
- Development (implementation, advisory and support) – 4 hours
- Project Management, Account Management and Reporting – 4 hours
Hiring a marketing agency results in a total labor cost of $72,000. When you insert your advertising budget, you’re running far leaner than the cost of building an in-house team.
Let’s do the numbers again with the assumption that you need a more robust marketing machine that runs multiple campaigns, frequent design, and consistent advertising.
For $12,000 a month you get a combined value of 80 hours of dedicated marketing expertise. At $144,000, you’re still well below the low end of $500,000 annually.
Do the numbers again with double that amount, and… well, you get the picture. By hiring a marketing agency, you save more money versus the cost of building an in-house team.
Pros and Cons
There are pros and cons to both scenarios
Hiring full-time marketing pros to join your company provides you with more access, more control, and maybe more accountability for hitting your numbers. But downtime and low productivity could eat away at the value you might get from this team.
Hiring a marketing agency provides you with a deep bench of experience across multiple marketing disciplines, a more robust toolset, and a fresh, outside perspective for your company. Cross-training and backup support manage the risk for downtime.
At the end of the day, the decision comes down to cost, value and efficiency.
What do you prefer?
Need a team to take your marketing to the next level? Give us a call. We’re here to help.