Should You OutSource Marketing? Behind The Numbers

a row of pie charts and graphs show how to outsource marketing to get positive ROI

One of the biggest questions C-level decision makers and business owners face each year is how to deal with their largest financial line item (and most important investment) – people. People drive organizations from both the top down and the bottom up. They are its lifeblood. However, having the RIGHT people in the RIGHT roles is what propels a business forward. Enter the marketing department. How many people do we need? What roles are critical? Should we outsource our marketing – any or all of it? Let’s go behind the numbers and reverse-engineer salary and revenue expectations.

Outsource Marketing vs. In House Marketing: Titles and Salaries

There’s four “basic” marketing functions and on most in-house marketing teams, as well as a few others that usually ride along with them. We’ll cover them from a financial perspective.

Web & Graphic Designer/Developer: Most companies have someone that codes in-house if they have even a moderately robust website. This person usually covers a graphic design role for any print work as well. The mid-level of web design/dev salaries in the U.S. is right around $71,500. The bulk range goes from $54,000 to $86,000.

SEO/PPC/Digital Ad Manager: Digital advertising (Adwords, BING Ads, online display advertising, etc) is a necessity for most companies. As is generating organic traffic from SEO. Again, this is usually one and the same people in most organizations. The mid-level PPC manager or SEO is making $57,200 currently. The bulk range goes from $48,500 to $63,300.

Social Media Manager: Everyone is enamored with social media these days. So much so that many companies have a dedicated manager for daily activities across a variety of sites, as well as any paid programs that fall within social channels. The mid-level salary for this role is $55,700. The bulk range goes from $49,300 to $62,100.

Copywriter/Blogger: An in-house copywriter is more of a new function. In the not-so-distant past, entry level admins were doing copy, marketing managers were doing copy, even sales people were in on the gig. As companies realized the importance of the written word to their brand, more copywriters started showing up in-house. The mid-level copywriter is making $52,400. The bulk range goes from $44,200 to $57,300.

[WANT TO LEARN HOW TO OUTSOURCE MARKETING TO GET A POSITIVE ROI? CONTACT US NOW!]

These are the ‘core positions’ on most MarCom teams. There’s always the option that hybrid roles are used (the developer that does PPC management, the content marketer that also mans social media outlets, etc). And we didn’t touch on things like video production, trade show coordination or media planning/buying. Most in-house teams also have a marketing coordinator or two (entry level, salaries in the lower $40’s usually). They are really just arms and legs for senior staff. A hot title that more and more companies are hiring is a digital strategist. This person ties all digital channels together. Their salaries range from the upper $70k range on up to 6 figures (and beyond).

Considering that your company may use hybrid positions, or that it may have “gaps” to fill with the roles above, just having the basics sort of covered can easily put you in the $150k to $300k range in salary alone. To absorb those roles and actually create ROI, your company likely needs to spend $1.5 million to $3 million annually in overall marketing (media spend, trade shows, web enhancements, salaries all combined).

There’s the rub. Most companies with net revenues between $2 million and $10 million annually are spending LESS than $1 million annually on marketing. Many are spending less than $500k. Salaries become a disproportionate element in the equation at that level. Especially if you account for the benefits and HR considerations tied to those salaries, which make the financial impact closer to 1.5 X the cost of the salary alone.

Outsource Marketing Cost/Benefit Analysis

Let’s say that the social media and organic/digital ad positions above were outsourced. First, the salaries (more than $100k) come off the books. Then the associated benefit and HR costs along with them (another $50k). That $150k becomes a tool to use for moving the business forward.

Here’s what that looks like in real terms. Considering a company like ours, you will spend $20k to $30k of that on outsourced marketing services or digital marketing consulting. The remaining $120k gets rolled into hard costs. Often times actual media spend. It often creates completely separate channels that weren’t funded before. Like this:

Outsource Marketing Partner: $30,000
Programmatic Media Buy: $45,0000
Top Industries AdWords Campaign: $50,0000
Trade Show Collateral & Direct Mail: $25,000

The right partners will focus on ROI. Putting another $100k plus to work through hard costs will generate a multiple of that in sales. The benefit of swapping in-house talent for a blend of outsourced talent and additional spend literally creates enough revenue to “buy the staff back” in other areas two, three, or even ten times over. Although the marketing staff was reduced, the dollars were actually used on activity that will fuel overall growth and additional hiring.

It’s not uncommon for the saved salaries to translate right into other salaries elsewhere. The line item above can quickly be transformed to look like this:

Outsource Marketing Partner: $30,000
Senior Sales Staff Hire: $75,000
Junior Sale Staff Hire: $45,000

In this scenario, the marketing continues forward without interruption. However, the internal salaries are shifted to sales roles. The sales activity (forecasted over time) becomes a driver for even more growth and even greater return.

One of the greatest benefits, though, is having a team of true experts working on your business who actually focus on ROI. Many mid-level employees are “learning on the job” and are, unfortunately, somewhat inefficient. Studies show that if you aren’t spending money teaching these hires on-site, your business may suffer (which is another expense to consider). This is also remedied with a great outsource marketing partner filling some of the staff roles above.

Outsource Marketing tl;dr

For all you skimmers, here’s a quick wrap. You can move marketing staff budget a number of places and drastically increase your ROI, either through increased media spending or other hard costs, or by swapping roles on a 1:1 basis after absorbing the cost difference of outsourcing. If you’re looking at a summer fiscal, and need to forecast growth without growing expenditures, outsourcing some or all of your marketing functions could be lucrative. To learn more about how this strategy can work for you, please contact us today. We help companies solve their digital marketing needs with a focus on ROI.

Author Jason Keeler

Jason is a Digital Strategist and Digital Marketing Consultant. He’s spent more than a decade working in Ad Agencies on businesses ranging from start-ups to Fortune 500 companies like General Electric and U.S. Bancorp.

More posts by Jason Keeler