Should my company bring digital marketing in-house or outsource? Try a combo of both

Digital marketing has proven itself to be one of the most effective types of marketing. Email, social media, content marketing, search engine optimization, digital advertising - each of these tactics can be essential to business success in 2020.

Especially during a crisis when your customers can't make it into your retail location. That's probably why as many as 95% of organizations have increased their digital marketing budgets in recent years, according to DigitalMarketingInstitute.com.

Right now is the time to change your mindset when it comes to a “budget” for digital media marketing. Social media is the best way to communicate with your customers, and putting your dollars into creating content, and pushing digital ads should be on your radar. Especially for businesses that are currently pivoting to provide e-commerce products and services.

We know that we need to put some of our marketing efforts toward social, but we're often not sure where to start. Here are some of the things to think about when setting a realistic digital marketing budget for your business.

How much you should spend depends on your business?

According to Google Ad management company WorkStream, the general rule of thumb is that a brand-new business should spend more (about 12%-20% of their gross revenue) on their marketing efforts because they are not known. It typically costs more to gain new customers than to keep the ones you currently have. Established companies should be contributing 6%-12% of their gross revenue to marketing efforts, as a whole.

Of course, this is definitely not a hard-and-fast rule.

If you're an established business looking to expand into new channels, you may want to temporarily increase your marketing budget to gain new customers.

The same goes for smaller businesses: If you have more business than you know what to do with at the moment, scale your budget back for a bit and reinvest the allocated money into production efforts.

Your budget is dependent on where you are in your business journey and what you realistically want to accomplish with your marketing.

This part is key.

Be realistic. If your company wants to spend zero dollars on digital marketing, then it's really just a self-fulfilling prophecy that your social media and digital marketing efforts won't work. You have to invest in it.

Looking back on marketing efforts

The beauty of digital marketing is that it allows you to gain an understanding of which tactics are working for your brand and which are a waste of resources. Before moving into the future, dive into your analytics to see what is currently working, what roadblocks you are experiencing, and how much you are currently spending on everything.

Dive into your analytics on your website, social media, your customer resource management system, and Google to get a general overview of your sales.

Ask yourself:

Which platforms am I getting the most sales (online, retailers, or in-store)?

Where is that traffic coming (this is easy to determine online; for in-person customers, you can keep a log of where people heard about your business)?

Create a spreadsheet list of everything you spend your marketing dollars on. Add once-a-year fees, monthly expenses, and don't forget to add costs for the time spent implementing and managing any of these tactics by your internal team (how many hours per tactic multiplied by their pay, or add how much you are currently paying to outsource).

Some digital marketing tactics to add to this spreadsheet:

Social media - strategy, photography, video production, graphic design, copywriting, community management, etc.

Software and tools

Paid digital advertising

SEO, blogging, website and hosting

Email marketing

Ongoing training

Some other marketing tactics that are not digital:

Cost for winemaker dinners

Print ads

Event marketing

Flyers or brochures at hotels, etc.

Telemarketing

Public relations efforts

Marketing efforts for local activities (i.e., city parades, 5K runs, or community rebuilding efforts)

Knowing which marketing activities are getting the best return on your investment allows you to add additional funds into making those tactics even better, and subtract funds from tactics that are not delivering sales (if sales are your digital marketing goal). Get together with your team to brainstorm ideas on how to make what's working even better, or how to fix what may not be working. Create a game plan from this brainstorm and take action!

Outsource, or do the work internally?

Of course, one of the biggest questions about expanding marketing efforts is, “How can I be the most cost-effective with marketing?”

There are a few options for brands. They can do all of the work themselves, hire an outside digital agency or freelancer (like myself) to help with specific parts of marketing, or ignore social media completely - which you know I do not recommend.

When working with an in-house person (or team) is better

If you are looking to hire someone for your company, right now is a great time to do so just for digital marketing. Full- or part-time, there is always enough work for this person.

In the past, a winery's wine club manager or a restaurant manager was in charge of everything that digital marketing entails. And when business got busy, digital was the first thing to stop.

Hiring an in-house digital marketing manager is ideal if you can find someone who has experience with all of the above tactics. Digital marketing isn't just about taking pretty pictures or writing copy; the candidate has to be excited about learning, because digital marketing is always evolving (this is why I love podcasts about digital marketing).

This option is ideal if you can find the right person to work at your company, or if you want to do it all.

When outsourcing is your best option

With an agency or freelancers, pricing is typically based on individual services. Their hourly rate is higher, but they account for every minute of working toward the deliverables. This way, a business only pays for exactly what is needed. They are also usually experts in their field who are hyper-focused on one or a few tasks.

By outsourcing to experts, a business can also cut out the overhead costs associated with having an internal team. You would hire for the services you need, when you need them.

You can either outsource all digital marketing efforts to one or a few different places, or you can hire an agency to stand on record. You can outsource for one-time projects, like creating a digital marketing strategy, a big photo shoot for a new line, or graphics for a current promotion.

You can also hire out on an ongoing basis, like you would if you hired an agency to take over your email marketing newsletters, public-relations efforts, or social media accounts.

This is ideal if you are a super-small business and only have a few people on your team, or if you're a medium- to large-sized company that wants to ensure your current employees are focused on their own jobs.

Taylor Eason, a digital marketer who used to work internally at J Winery and Gundlach Bundschu and now owns Cork & Fork Digital Media, says that the decision is more nuanced than finding someone who can take a pretty picture.

“The deciding factor is whether a business can afford to hire the right talent in-house. Someone who can achieve the desired goals,” she said.

She has seen first-hand that while social media marketing is often done in-house, for many brands it is unfortunately done poorly or without a strategy in place.

“Platforms like Instagram and Facebook run on algorithms and reward accounts who are consistently posting and being ‘social' with other people. Regrettably, these days it's not as easy as throwing a post at Instagram and checking off that box.”

Costs range depending on what your needs are, so get a few bids, or talk to your marketing colleagues before going with one company or freelancer to work with.

My two cents: Try to compromise

Often, especially when it comes to social media, you want to have someone who is available to share content at your location, whether it's behind-the-scenes details of winemaking during harvest or a fun thing that happened at the restaurant.

Outsourcing all of your work means that the agency or freelancer can't necessarily be at every event, and your social media audience may miss out on some of the fun activities you'd like to post.

You also want to make sure that whoever is in charge of actually connecting with your audience online understands the culture of your business.

And most of the time, finding a digital marketing manager who is great at everything may not be realistic. In that case, hire someone part-time to be in charge of the day-to-day social media, but then outsource a photography session once a quarter, pay for in-person or online training, or find a freelance website manager to take care of your online sales and write some company blog posts.

No matter how you market your business, investing time and energy into your strategies and identifying what works for you is important. There are so many ways to make digital marketing a vital part of your company. Treat it as a priority, and you give your business the chance to flourish.