The Real Cost of Marketing Operations: Should You Consider Outsourcing?

Business leaders understand the importance of marketing operations. Leverage your marketing efforts, gain insights, organize, and automate tasks for efficient performance. But, building a marketing operations team is a complex process. Is it best to develop one internally or to partner with an agency for marketing operations managed services?

Often, the question of in-house vs agency comes down to price.

You can expect the costs of recruitment and development to pile up quickly if you choose to build internally. But how much does it cost to outsource your marketing operations to proven professionals?

In this blog, we’ll explore the costs of investing in a MOps agency partner, and how a hybrid model may offer the best approach for your company.

What’s the cost of marketing operations?

Marketing operations are essential, but cultivating and retaining a fully staffed MOps team can cost your business considerably. If that’s the case, you’ve likely considered outsourcing MOps to a dedicated agency. 

Outsourcing MOps streamlines your efforts as agencies can provide a one-stop solution for all operational needs. Engaging an agency can reduce or even eliminate many of the associated costs of marketing operations. For example, there’s no need to spend time on recruitment and development—an agency employs reliable professionals well versed in the latest technologies and best practices.

Considerations for Outsourcing

Expertise and cost-savings make outsourcing MOps an appealing option for many businesses. Consider these advantages of outsourcing. 

Capabilities

Agencies employ dedicated experts in marketing operations. Their experience and insights help effectively leverage data gathered throughout the entire marketing funnel. And because they exclusively focus on marketing operations, they can often deliver on proven initiatives that minimize your risk. 

Conversely, inhouse teams must be cultivated. Extensive time and money investments are necessary for recruitment, development and retention. Outsourcing is more fluid and adjustable to your organization’s dynamic.

Efficiencies

Typically, agencies prove to be more efficient for your business. Scale your team at will based on the size and bandwidth-needs of the project at hand. Or target specific channels with laser-focused precision. 

Another way that agencies boost efficiency is that they can work from proven frameworks. By focusing on reliable techniques and approaches to each campaign, agencies can deliver repeatable results more quickly.

Employee Retention

MOps is a highly specialized and sought-after field of expertise. That makes the role highly competitive. Many businesses that attempt to build an internal team see high turnover rates due to qualified experts that leave over time.

Additionally, a decentralized internal approach can lead to lower employee satisfaction. The extra responsibilities of MOps duties may seem more like a burden than an opportunity. To fill in the gaps, it may be more prudent to engage an agency. 

Agencies simplify the overhead costs and relieve employees who may feel overwhelmed or who don’t have the bandwidth to effectively handle MOps and martech. 

Organizational Fit 

A good agency functions as a true partner so you’ll get the most out of your marketing operations efforts. They’ll also demonstrate effective communication that clearly showcases the results of their work.  

Adaptability is crucial for your partner agency. That way, they’ll fit neatly into your existing structure while guiding you into the future of marketing. 

Hybrid Model: The Best of Both Worlds

While agencies boast many of the features your business needs to organize and implement marketing operations, many business leaders prefer to remain in control of their internal data and analysis. If that’s the case for your company, consider a hybrid model. 

In this model, a small internal team is assisted by an agency, to help manage your MOps efficiently. The partner agency functions like an extension of your business’s marketing department, rather than a separate entity entirely. 

A hybrid model lets you maintain control while having direct access to a team of experts. While it may not be perfect for every business, it provides an alternative to in-house and full agency control. 

Cost Assumptions of a Marketing Operations Agency

To understand the differences in costs between in-house, agency, and hybrid models, consider the cost assumptions below.

Team 

An average in-house team may consist of more “marketers” than actual Marketing Operations specialists. At an agency, you have access to the exact expertise you need.

Typically, a Marketing team of 6 people includes only 1 marketing operations specialist with maybe one other person available to support projects. When utilizing an agency, you could work with as many MOps specialists as the project demands, whether that’s 1 person part-time or 10 people full-time.

Efficiencies Gained

Companies see an increase of 20 percent efficiencies gained when leveraging an agency’s specialized expertise. 

Cost of Turnover

Turnover rates average about 20 percent, and talent acquisition costs an average of 75 percent per salary. Plan on allocating 20 percent annually to your internal operations payroll.

Availability

In a year, there are approximately ten paid holidays and three weeks of vacation. In the end, that leaves 1,410 available hours.

People

A fully loaded, in-house, mid-level MOps specialist costs about $120K a year, or $85 an hour. A fully loaded, in-house, senior MOps specialist can command $150K a year, or $106 an hour.

Conversely, MOps experts at an agency can command $175 per hour for mid-level, and $200 per hour for senior employees. 

Talent Acquisition 

The Society for Human Resource Management (SHRM) estimates the average replacement cost of a salaried employee to be six to nine months’ salary. For an employee earning $60,000 per year, that totals approximately $30,000 to $45,000 in recruiting and training costs.

Costs of an In-House MOps Team

This example uses the assumptions above to break down the cost of an in-house MOps team, outsourcing to an agency, and using a combination of both in a hybrid model. As you can see, outsourcing or taking a hybrid approach is often the most cost-effective solution for many companies. 

Let’s look at the different cost of marketing operations under three models: in-house, marketing agency, and hybrid.

Conclusion: A Hybrid Approach to Marketing Operations Offers A Balance

While cost may factor into your decision, industry leaders suggest it should not be the deciding factor. Instead, capabilities, efficiencies, employee retention, and organizational fit should be primary concerns. Outsourcing or taking a hybrid approach can offer a balance between cost and efficiency that helps improve ROI.

If you’re interested in learning more about MOps managed services, drop us a line here.  

Your marketing technology experts.

At Digital Pi, we use technology to connect revenue to marketing efforts. We fuse marketing strategies, processes, data and applications to make marketing technology solutions work for clients' businesses.

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