To Build a Marketing Team or Hire an External Agency

When starting a company, one of the considerations after fund raising is marketing.  The decision here is whether to hire an external marketing agency, or build an indigenous marketing team.  This is not always so straightforward.  Marketing is a specialised role, and any serious business needs specialists to grow their market share. 

The strategic advantage of having an in-house marketing team is that they have intimate knowledge of the business.  They are directly invested in the success of the company, and its products or services.  The company is its sole concern and focus.  On the other hand, an external marketing agency would have a greater breadth of knowledge and industry contacts.  They would likely be more exposed, and be more current with industry trends.  We need to weigh between business intimacy and market currency.  An in-house team would know the company and its offerings better, while an external team would likely know the wider market better.  This depends on what the company needs at the moment, and there may be different solutions for different markets, or a combination of either. 

At the very beginning, when cashflow is tighter, the budget is a larger consideration.  An in-house team is a greater initial cost than an external marketing team.  The hiring process, and the set-up is a cost in terms of time and opportunity, since an in-house team would need time to get up to speed.  This is why businesses hire an external marketing agency.  An external agency does not have the cost of recruitment, payroll, taxes, and training, as well as supply.  They are hired to provide results and other costs are amortised across several other clients.  A marketing department is a major investment, and unless the returns justify it, it is not a cost a business should bear yet. 

The third consideration is time pressure.  Coming up with a marketing strategy requires time for market research.  When customer growth begins to plateau, when there is pressure from new offerings by immediate competition, or when a new market is sought to offset loss of share in an existing one, it would make sense to hire an external agency, which is agile enough to develop a campaign on short notice based on their knowledge of current trends. 

In general, a better approach would be to hire an agency to handle marketing and get things off the ground.  As market share and the company grows, the next step is to invest in an in-house marketing team whose role is to chart out a long-term overall strategy for the brand.  They work with the external agency, not replace it.  An external agency would still be hired for specific products, specific target demographics, or specific markets.  The marketing department works with the agency, exploiting their creative process while steering the overall branding in a direction desired by management of the company. 

Marketing is an ongoing process.  It is part of the corporate imaging and branding of the business and the products and services it offers.  There is no contention in the need for having marketing professionals, experts in the field.  It is only a matter of balance between an internal department, or an external agency.