Let’s look at the most obvious expense to start. An internal hire will require a salary while an agency will have a contract. The cost of that salary depends on a few things, such as the position you’re looking for, where your business is located, and more.

(*Stats gathered from Glassdoor)

Remember, these are average salaries meaning they account for employees in large cities (New York, Los Angeles, Chicago, etc.) where higher salaries are necessary. We’re not saying you have to offer your Digital Marketing Specialist $70K, but dipping too far below these numbers will scare away any qualified candidates. Oh, by the way, your employees expect timely raises, so these numbers will continue to rise.

When working with an agency, your costs depend on how much work you need done. Contracts can range anywhere from $1,000 per month to $80,000 per month. Many agencies charge by the hour or project, and that can range anywhere from $100 – $300 per hour.

Typically, an average contract size over the course of a year ranges from $30,000 – $50,000. There are obviously outliers that spend hundreds of thousands annually.

So, let’s compare. Would you rather hire an inexperienced marketing assistant for $40,000 who may or may not turn out to be valuable, or would you rather hire a team of marketing experts for a similar price?

Except…it’s…not…the…same…price…

Yes, let’s say you have the option of hiring someone for $40,000 and an offer on the table from an agency for $40,000. Those two numbers look exactly the same, until we dig deeper.

With an agency, that $40,000 is what you’re paying. No hidden costs. No upcharges.

With an in-house hire, that $40,000 simply represents what they’ll be receiving in salary. It doesn’t account for benefits, equipment, office supplies, training, tools, resources, miscellaneous costs, human resource costs and more!

Employee Benefits:

You have to offer most (if not, all) of these benefits to attract quality candidates. They include:

Health Insurance – this could be vision, dental, or even a complimentary gym membership.

Retirement – this includes 401K matching, profit sharing, and more.

Insurance – employees need life insurance, injury insurance (disability), and unemployment insurance.

Payroll Taxes – Good ‘ole Uncle Sam needs his money because you hired someone.

Bonuses – this includes holiday bonuses, performance bonuses, commission and more.

Paid Time Off (PTO) – whether you call them sick days or vacation days, employees need days off.

When working with a marketing agency, you’re not dealing with any of these additional costs! If an agency employee gets hurt or sick, you don’t have to pay for it. Even better? You won’t lose any production as their colleagues take on responsibilities.

Equipment:

Expect top-of-the-line work? You better provide top-of-the-line equipment. When working with a marketing agency, you don’t have to pay for their computers and other equipment expenses. Think about all the equipment a single employee must have in order to be successful in marketing:

Don’t forget about random office supplies (pens, paper, sticky notes, staples, scissors, etc.) and accessories for the electronics listed above.

It’s no secret that video marketing is not only an advantage for companies these days, but it’s essential. Every business in the world should have some type of video content to promote. Want to buy your employee his or her own equipment? Good luck!

Oh yeah, and your team has to possess the necessary skills to plan, produce, and edit video.

Tools & Resources:

Marketing agencies need to stay on top of current trends. As a result, they invest in various tools, website subscriptions, software and more. For the most part, agencies do not charge customers to use these resources because their employees would be using them anyway. Here is just a sample list of software and resources we use with their monthly costs:

SEMrush: this website gives you the ability to analyze your site’s SEO performance, as well as compare to your competitors. It breaks down organic and paid advertising results, keyword position rankings and much more. SEMrush costs $99.95 per month, or almost $1,200 per year.

Adobe: The Adobe Creative Suite is no longer an advantage for companies to utilize, but instead a necessity. From PhotoShop to Premiere, Adobe provides many options for businesses to improve their digital presence. The business cost for this is $79.99 per month or more than $900 per year.

Go-To-Meeting: while it may seem silly to include this, Go-To-Meeting is crucial for an agency to succeed. The amount of meetings needed, especially when multiple agencies and companies are involved, is insane. Keeping everyone on the same page is made much easier with GTM. It costs $468 per year.

Sprout Social: managing multiple social media accounts has never been easier – if you have Sprout Social. This site gives users the ability to schedule posts, engage with fans/customers, and analyze insights to name a few. It costs $99 per user, per month.

Marketing Automation: lead nurturing is made simple with the right marketing automation platform. Many businesses shy away from automation because they aren’t experienced with it and are afraid of high costs. Agencies can offer discounted pricing. We work with Hubspot, Pardot, and SharpSpring, all of which have varying costs per month.

Majestic: need a detailed breakdown of your SEO (search engine optimization)? Majestic is the tool for you. It provides valuable data that can help you update existing content and/or produce new content to attract more customers. It costs $99.99 per month.

Bright Local: Want to stay on top of your local listings and citations? Bright Local is the perfect tool. This platform has also added additional SEO features and is evolving into one of the best tools on the market. It costs $79 per month.

Hotjar: This tool allows you to see user activity on site; where your visitors scroll too, how often they click, and much more. It gives you an idea of how user-friendly your site is and where it can be improved. Hotjar costs $89 per month for the basic package.

Those are just the paid software. Agencies use many more free resources – many of which you’ve never heard of – to analyze websites, manage projects, compare competitors, research keywords and more.

Not only would you have to pay for all of those subscriptions, but you’d also have to ensure your hire knows how to use the tools. Which brings us to our next topic:

Training and Professional Development:

Employees don’t improve without investing in them. You want employees who want to get better. Companies must provide a path for their employees to grow professionally. This can be done in a few ways:

Training

There are companies in the marketing industry dedicated solely to providing online webinars and training. This training address current issues and marketing trends that allow participants to bring more knowledge to their respective companies. Agencies allow (or even require) their employees to join training sessions. Isn’t that better than paying for your employees to take them?

Certifications

Most marketing platforms, such as Google, Bing, and various marketing automation tools, offer certification courses. Think of it in terms of a doctor or auto shop. Do you want a doctor performing surgery who is certified or not? Do you want a technician replacing your brakes who is certified or not? These certifications cost money and require employees to undergo classes, which creates overhead time. Marketing agencies are already certified, meaning you don’t have to pay for it. Site-Seeker is proud to be certified in the following:

Google Ads, Google Analytics, Facebook, HubSpot, SproutSocial and much more.

Events

Want your employees to learn from the best of the best in the marketing industry? Conferences are the way to go. Content Marketing World, MozCon, Inbound, and Social Media Marketing World are just a few options. Some of these conferences are fairly expensive, with registration ranging anywhere from $500 to $3,000 per person. That doesn’t even include travel, lodging, and other related expenses. Marketing agencies like to keep their employees current with all trends and send their employees to events like this throughout the year.

HR Process:

There’s a lot that goes into hiring a new employee. Think about the amount of time and labor that the Human Resource department spends for each hire. Interviews, internal discussions, background checks and more all factor into each hire.

Many companies advertise their job openings on LinkedIn, Indeed, and other job sites. Each ad costs money and does not guarantee a quality hire. We’ve worked with companies who wasted years looking for that perfect employee – remember, the one who doesn’t exist? That’s a lot of time and money spent without anything to show for it.

Miscellaneous: