In-House vs. Ad Agency Marketing: Pros and Cons (With Tips)

Updated February 3, 2023

A team gathers around a table, working on a project, with documents, notes and drafts in front of them.

Marketing can be one of the most important tools for driving a business's success. Some companies find it easier to partner with external marketing groups to manage their brands' ad presence, while others prefer to work with in-house teams. Finding the right marketing resources and choosing the right marketing strategy for your business can boost your profits and attract more customers. 

In this article, we discuss the differences between in-house versus ad agency marketing and consider the pros and cons of each strategy, followed by steps and tips for working with each one.

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What is in-house marketing?

In-house marketing is a department within a company that performs marketing services exclusively for that company. These employees use in-depth knowledge of the company and its needs to craft marketing strategies or campaigns without the help of a third party. Small-to-medium-sized companies usually use in-house marketing, and most teams have a marketing manager, content writer, SEO and analytics expert, social media manager, paid ads specialist and CRO-focused developer.

Read more: What Are In-House Ad Agencies? With Benefits and Tips

What is an ad agency?

An ad agency is a third party that handles all of a business's marketing and advertising matters. These agencies often have the strategies, connections, resources and team members to promote a business effectively. Ad agencies often run TV, radio and other types of commercials. Some ad agencies also specialize in certain areas, such as PR, digital marketing or content creation.

Read more: How Do Advertising Agencies Work?

In-house marketing vs. ad agencies

In-house marketing and ad agencies both have positive and negative attributes, but the usefulness of each one depends on your business. Here are some characteristics of each group:

Pros of using in-house marketing

Here's a list of pros of using in-house marketing:

  • Cost: Many companies find that in-house marketing costs less to fund and maintain. This is especially useful to small companies, where saving money allows other departments to receive adequate funding for other business ventures or improvements.

  • Communication opportunities: When a company opens communication between the marketing team and other departments, it can be easier to collaborate and share information and resources. This can allow a marketing team to complete projects faster and lead to new advertising ideas or opportunities.

  • Brand familiarity: An in-house marketing team is often familiar with all aspects of their company and industry, which gives them the advantage to assess the company's needs thoroughly and create a marketing strategy that best fits the current demands.

Cons of using in-house marketing

Here are a few cons of using an in-house marketing team:

  • Limited skills or experience: You may have to prioritize what skills or experience you want on your marketing team due to the limited number of people that can be on the team. An in-house team might not have as many skills or experience as employees of an ad agency.

  • Talent recruitment time: To build your marketing team, it may take an extended period to find, interview, hire and onboard new candidates.

  • Idle creativity: An in-house marketing team may eventually rely on the same creative styles or strategies, which can affect the success of your company's ad presence.

Pros of using ad agencies

Here are some pros of using ad agencies:

  • Marketing fluency: Ad agencies often have experience working with hundreds of clients, which means they have knowledge of many marketing strategies and practices. They may suggest plans of action that a company hasn't considered, which can open opportunities for future innovation.

  • Resources and connections: Ad agencies may also have access to resources that in-house marketing teams can't afford or have minimal experience using, such as software, equipment and other tools. They may also have connections to other companies or advertising platforms that provide more exposure for a company.

  • An abundance of creativity: Since ad agencies usually have a large number of employees and specialties, they can often offer new and innovative marketing strategies. This allows your company to stay relevant within its industry and experiment with new opportunities more often.

Related: Your Guide to Improving Your Creativity at Work

Cons of using ad agencies

There are a few cons of using an ad agency for your marketing needs:

  • Too many clients: Ad agencies often have numerous ad campaigns to manage, so they may not be able to dedicate enough time or energy to a specific company's needs. This may also include long wait times for deliverables or projects.

  • Less in-depth knowledge of each company: A company may have to spend extra time informing an ad agency of its audience, brand, goals or culture to create adequate marketing strategies.

  • Less content control: You may have less creative control over what an ad agency develops, since they often oversee the entire production process. This may lower your connection to the finished product.

How to choose between in-house marketing vs. ad agencies

Here are a few points to consider when choosing an option for your company:

1. Consider how fast the company needs to improve its marketing strategies

It can sometimes be easier to hire an ad agency if a company needs a quick and easy way to adjust how it markets itself. For example, a competitor might have released a new product that you want to outmatch in sales.

An ad agency can be the most time-effective way to advance your company's brand presence. If a company is in a position that allows time to build a specialized in-house marketing team, that might be the better option.

2. Measure the company's budget

One of the most important things to consider when choosing between an ad agency or an in-house marketing team is a company's budget because that determines what kind of service a team can afford. It can be helpful to browse different ad agencies' prices for your specific needs and compare them to the cost of hiring and maintaining an internal marketing team. You may also benefit from meeting with your financial department to discuss these numbers.

Related: 10 Useful Tips for Planning a Budget

3. Analyze the company's needs

It can be helpful to analyze a company's needs to determine what it can gain from using different marketing groups. This can include long-term and short-term goals, areas that need improvement or potential opportunities.

If you only need a few aspects of your marketing campaigns managed, an in-house marketing team might be the better option. If the company requires a complete redesign of its marketing efforts, an ad agency might be more beneficial.

Tips for working with an in-house team

Here are a few tips to help you work with an in-house marketing team:

  • Consider your team's workload. A team may be more likely to create profitable work when they have a reasonable amount of work. If your team is overworked, you can prevent a decrease in product quality by hiring new members or reducing the number of active projects.

  • Take your time choosing the right candidates for your team. You can plan ahead by determining what roles your in-house marketing team needs to perform effectively. You and your recruiters can find the right candidates by thoroughly analyzing applications and hosting in-depth interviews by asking role-specific questions and asking about experience and skills.

  • Advocate for regular workshops or training. Your team is more likely to stay motivated and produce exceptional work when they're encouraged to keep learning, honing their skills and tailoring their craft to evolving technologies and strategies.

Related: 7 Ways To Collaborate With a Team Effectively (Plus Tips)

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Tips for working with an ad agency

Here are a few tips to help you work with an ad agency:

  • Research different companies before choosing an agency as your partner. You can examine their areas of specialty, what type of resources they have, contract information and prices. It can also be helpful to research an agency's online presence and look at employee and customer reviews.

  • Set expectations early. It's important to discuss information such as success metrics, goals and acceptable behavior with the ad agency with whom you partner. This prevents miscommunication and allows you to focus on a common goal.

  • Stay flexible. Your company may benefit from experimenting with new strategies, listening to new ideas and altering routines.

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