Going In-House Isn’t Always The Cost-Cutting Move You Think.

I recently got into an argument with another agency owner who seems to believe that cutting costs and doing great creative work can’t share the same place in a marketer’s mind. He felt that Chief Marketing Officers across the board are fine with settling for “good enough” work these days by bringing their team in-house rather than hiring an agency and that doing so is a cost-cutting move.

I can’t agree with that logic because CMOs have a short window of opportunity – less than 2 years on average. And in that window, it is unlikely that creative work deemed merely “good enough” is less likely to produce very positive results. Yet I won’t get into a subjective argument about which tends to be more creative and strategic, in-house or outside source because in some instances, the in-house route works out fine. More than fine, actually.

But I have a big problem with the uniform “in-house is cheaper” stance. That doesn’t always pan out, particularly if you value having a strong creative product across a variety of mediums. I also have a big argument with the notion that if one outside source doesn’t produce results, going in-house because you “can’t do any worse” is the way to go. Actually, in a lot of ways, you can do worse. Much worse.

Believe it or not,  I’m not trying to sell you exclusively on doing things externally. But if you want it done right and want it done strong and consistent, getting positive results from an in-house agency requires building and maintaining a strong team. That costs money if you’re going to build a team of any sort of substance.

Beyond money, to build and maintain a strong in-house house team, you need talent and versatility.

Let’s start with the shell of a creative unit. Creative Director. Copywriter. Artist. Production Artist. Hire outside exceptional, dependable people for this. You can’t turn Bob in Accounting into an artist just because he took a Photoshop class at the local community college.

Planning on buying and negotiating media? Throw a Media Buyer onto the list. If the Creative Director’s going to wear that hat too, bump up their salary even more.

You plan on using the Internet in some capacity, correct? Let’s give you 2 web people, one who can do front-end web design and one who can do back-end programming. It’s rare to find a web person who can do both sides well and if you do, you’d better bring the bucks for that one. One of your artists can handle all manner of front-end web design? Good for you. Then bump up their salary even more.

At this point, you could conceivably be at at least $500,000 for the year and probably much more. And I haven’t touched upon a Strategic Planner/Account Planner, a very useful and important function to have.

Am I forgetting anything? That’s right, of course – the media you’re actually going to buy. That costs money too. But since you’ve spent as much as you have on staff overhead, cutting costs big-time here could very well mean cutting out entire media choices. Choices that offer reasonable avenues to connect with your target audience.

I also haven’t included the vast technological software your staff will continually need in order to create, research, plan and more. If you think those can be had for cheap, you obviously haven’t seen what a new copy of Adobe Creative Suite runs these days.

On the other hand, let’s say an outside source knocks on your door with creative talent, experience and all the other right things you’re looking for. They cost $5,000 a month for what you need, including talent and resources. But you’re spending $60,000 a year for their services vs. over $500,000 for your in-house team.

In this example I’ve outlined, if we’re looking at the argument on the basis of cost-cutting, you will put substantially more money into your in-house team than you will by hiring outside help.

Regardless, this debate is not as black-and-white as some would make it out to be. It doesn’t have to be an all “in-house” or all “external hire” situation, folks. In fact, a relationship that encompasses some in-house people collaborating with agencies or consultants just might be the best-of-both-worlds answer you’re looking for too.