Should I hire an ad agency or get someone in-house?

This is a common question we get at our agency. You see it all the time on places like Reddit and other forums. Which path you decide to take doesn’t really matter. No, really!

What matters infinitely more, is hiring for where along the growth cycle your company lands. The big thing is that it does not matter if you hire an agency, a freelancer, or someone in-house if they cannot do the job. At that point, it doesn’t even matter which group you slot them in.

This is the big “Aha!” moment we find when talking with people. Just because you hired an agency or someone in-house, does not guarantee that they can execute and do the job you hired them for.

Getting someone on board who can do strategy and confidently execute is almost more important than the fees or salary you pay them. The amount of money you are spending each month is relative to results. There is no standard fee structure but common ones are:

  1. % of ad spend
  2. hourly
  3. flat fee/project rate
  4. Commission
  5. Mixed model

Fee Options & Contract Length

A low fee option or a cheap salary that doesn’t deliver is equivalent to burning money. What you pay is only one factor, results matter too. Try to compare fees & pricing models against the results you will get. Especially if you want a profitable business. Lets look at two examples:

Option A: $40K/year and gets you a 2.5x return on ad spend (ROAS)

Option B: $60K/year and get you a 4X return on ad spend (ROAS)

Looking at both options, B is clearly the better of the two. What makes option A a challenge is the brand could be losing money each month and not even be profitable. This means on top of spending money on option A, you are also burning cash each month to fund a worse acquisition channel.

We call this the hidden cost of bad hiring. It happens all the time. People generally just look at what they spend each month and don’t take into account the deliverables.

In no way should anyone promise what ROAS they will be able to achieve. However, a brand needs to think about what results they need to achieve based on the money they spend each month hiring someone or an agency.

I think past work can give you more confidence. People’s results from other brands can help show that they have the goods to achieve similar results for your.

Hiring an agency or an in-house person isn’t as black and white, though. There are a lot of people doing good and amazing work in this industry. Similarly, there are just as many doing not so good work.

Also, look at your commitment period. Signing an agency to 3 – 6 months is not the same as getting someone on board for 12 months. Longer isn’t bad but length of contract should be another lens you use to view an agreement.

What Work Do You Need Done?

This may feel like an obvious question to ask but it’s not always easy. Part of being successfully in hiring is knowing the job that needs to be done. Some questions to ask yourself:

  • Do you just need help with paid ads?
  • Which ad channels do you need help with?
  • Do you need help scaling the ad account or making the ads profitable?
  • Do you need help to diversify away from Facebook?
  • Do we need to come up with new/clever strategies?
  • Should we find new channels to test out and trial?
  • Does our funnel (Landing pages, tracking, etc…) require optimization?

We see clients routinely reach out with many or all of those aforementioned questions. You should look at options that can help you with other challenges you could be having. Maybe you need help with…

  • Increasing average order value
  • Getting ad creative made since you lack a designer
  • Improving your site’s conversion rate as it is below 2%
  • Setting up your Klaviyo email flows and campaigns
  • Getting more user generate content (UGC) from customers
  • Acquiring more emails to grow your email list

You may not want one person or agency who can do everything and you definitely don’t want to put all your eggs in one basket by having one company do everything. It’s just good to know what issues you are having and which of those you’re trying to solve, when hiring.

Hiring Talent

Finding great people is hard. Extremely hard. Ask your network if they can recommend anyone. Look on Reddit to see who comes up based on questions you ask. If you talk with ad agencies, ask to speak with one or two of their current clients. See what clients think about them and how they work.

If you want to hire someone awesome, then you need to ask better questions. Questions that test what someone knows but also shows they are not giving you a fluff answer. It’s dangerously easy to sound like you know what you are talking about without giving an in depth answer.

We have helped a couple clients hire someone in-house to replace us as their agency. We grilled people until they either cracked or stepped up and showed they can do the work. This all came down to asking better questions because we know how to do the work. We knew when someone said something that was clearly wrong or didn’t make sense. Go beyond the surface level answers, and dig deeper.

In return, people you are talking to should ask you some questions. The people you work with should ask you about your marketing and business goals:

  • What is your revenue goal for 20xx year
  • Who is your ideal customers? What makes them ideal?
  • Anything I should know about your customers that might be unique
  • What is your cost per acquisition (CPA) or cost per lead (CPL) target
  • What is your average order value (AOV) or lifetime value ( LTV)
  • What percent of revenue comes from paid ads

Generally they should show they care about doing the best job possible. There are tons of questions they can ask but this is a great place to start.

Experience & Red Flags

Something I see clients mix up, is thinking that someone who says they have been working for 5 years on Facebook or Google ads means that they have 5 years of progressive experience. Rarely does number of years working translate into how experienced someone is. It is easy to settle or plateau in this industry.

A major red flag is anyone that won’t run the advertising out of your ad account. Don’t sign any agency or freelancer that wants to run ads out of their ad account (and no, they don’t get a discount from Google). You should always own (admin access) and have 100% access to your ad account.

They should also do an audit of your ad account and Google Analytics to make sure it is setup correctly. This can be done before or after you sign but an audit at some point should be done.

Now when most say they will give you a free audit, what they really mean is they will review your ad account in 2 hours and call it an audit. It’s really more of a high level review at best and not even close to an audit. What can they learn about your business in 2 hours?

In The End

If they sound to cheap, they might be too good to be true. Many agencies, freelancers and even in-house people will over-promise and under-delivery in their work. You should get a paid media report showing your ad spend and what business they are bringing in the door.

Also trust your gut in the end. Most brands hire fast and fire way too slowly. It can be scary to fire an agency but if you are burning money each month, how much worse can it get?