In-house vs. Outsourced Paid Media: An Unbiased Cost Comparison

So, you have finally given in to the urge to open your own bean-to-bar chocolate boutique down the street where people can take a bite of their childhood delights and saunter down the road every evening. 

You have also decided to take your business to the next level with a marked online presence so that the orders keep coming in! You are producing great content and even dabbling in email marketing with exclusive discount coupons for regular customers. However, brand awareness or conversions are still not as great as you’d like them to be!

Yes, dear friend, you may need to invest in paid media marketing activities such as running pay-per-click (PPC) campaigns, sponsored social media ads, banner ads, and video ads on the right platform to target your ideal consumer profiles (ICP), in this case, anyone with a sweet tooth (or someone who’d choose chocolate slabs over broccoli!) 😉

While a digital marketing agency can help you with both your paid and organic campaigns, a paid media agency focuses on creating and executing campaigns that are promoted through paid placements like video ads, pay-per-click (PPC) ads, banner ads, pop-ups, and sponsored social media posts. 

Now you need to make a decision and quite an important one!

To insource or outsource your PPC activities to a paid media agency? Also, what are the costs involved in both options?

We at Mavlers have a team of 120+ professional PPC experts and 50+ dedicated resources deployed over the past 12+ years. Having catered to the paid media needs of 7000+ global clients, we have felt the aches and pain points of those on the other side, those in your shoes, to be precise. 

In this blog, we will attempt to offer unbiased and honest answers to the following concerns,

• Benefits of outsourcing to paid media agencies
• Cost of outsourcing
• Factors affecting the cost of outsourcing 
• Benefits of hiring in-house paid media professionals
• Cost of hiring in-house talent
• Factors affecting the cost of in-house
• Comparison: outsourcing to paid media agencies vs in-house 

We contacted Nisarg Joshi, our paid media expert at Mavlers, to offer honest and unfiltered insights so that you are better equipped to decide for your brand/agency. 

Let’s hit the ground running, people!

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Benefits of outsourcing to paid media agencies

In order to make an informed decision, it is quite important to understand what benefits are included in the costs of both. Therefore, let’s begin with understanding the pros of outsourcing your PPC needs to a paid media agency. Let’s take a deep dive into what’s good with this option!

1. Expertise and experience

One of the ways to efficiently and quickly achieve your paid media KPIs is to partner with an agency that has been around for quite some time and is familiar with the ins and outs of paid media industry trends, local audience, and demographic preferences, and knows what works and what doesn’t!

Interestingly, some niche paid media agencies cater to the PPC needs of a particular industry, such as healthcare or dental firms. They know which keywords to target, how to bid efficiently, and how to get the maximum bang from minimum ad spend. Yep, they know the tricks of the trade, and you can benefit from their knowledge and expertise. 

If you are considering a cost-benefit analysis of agencies vs freelancers, we suggest reading our blog “Can An Offshore Agency Match The Pricing Offered By A Freelancer?”

Partnering with a paid media agency can help you gain access to increased clicks, conversions, impressions, and subscriptions across different marketing channels/platforms, such as Google Ads, Bing Ads, Facebook Ads, Instagram Ads, YouTube video ads (skippable or non-skippable).

They can help deploy conversion-tracking codes, split testing to see what works best, launch new landing pages, etc. With expert professionals on board who have the skills and expertise to get the job done well, you don’t need to worry about the learning curve!

Some of these agencies can help you with strategizing as well as execution. At the same time, some focus entirely on the execution part with ongoing recommendations to get the most out of your paid media campaigns. 

Before you choose a particular paid media agency, we suggest you look for badges or credentials such as Google Partner and Microsoft Advertising Partner.

2. Quicker solution with reliable results

Let’s face it: we hate to wait! 

If you were to set up and run your own paid media campaigns, you would need to learn from many hits and misses, trials and errors before you hit the bullseye. Even if you were to hire a paid media specialist with experience in your industry, they will take time to understand your brand tone, messaging, vision and ethos before they can come up with campaigns that convert. 

However, when you partner with an agency that has industry-specific knowledge and is familiar with the latest PPC trends, they will help you save time and money and develop campaigns that convert quicker. 

You spend less time and effort hiring and training the right people, and you achieve quicker results when partnering with a paid media agency that knows what they are doing. How cool is that?!

They can also help you track and audit existing campaigns with specialized campaign audit reports. 

3. Cost-effective

Outsourcing almost always works out to be a more cost-effective option in the long run as you save on the costs of hiring, training, retaining in-house professionals, and paying employee benefits. 

When you partner with an agency, they will help align your paid campaigns with your KPIs and take ownership of the end results. 

The management fees and one-time set-up costs charged by agencies might initially seem like a heavy investment, but in the long run, they will even out and prove more cost-effective. 

4. Ready-to-use tools and resources

Partnering with a paid media agency ensures they have the requisite tools, software, and tech stack in place. This means you won’t have to spend extra resources (time and money) to buy these tools and train your in-house resources. 

You can rely on the agency’s tech stack and expertise as you focus on other core business verticals. 

Cost of outsourcing to paid media agencies

In order to give you clarity on the pricing offered by paid media agencies in general and the costs of different paid media activities (like paid social media marketing and PPC) in particular, we are going to split it up!

• Digital marketing agency (that offers paid media services)
• Social media agency
• PPC agency

At a high level, you can expect to pay USD 25 to 49 per hour globally for hiring a digital agency on Clutch (that offers paid media) and USD 100 to 149 per hour for a social media agency. 

Cost of outsourcing to digital agencies that offer paid media services

Interestingly, if one were to compare the salaries of different marketing talents and the average cost of hiring a 100-hour retainer with a small digital agency, it would work out to $10,000 – 15,000, equivalent to hiring two to three marketing personnel at different levels! 

Though the costs vary depending on the project and service, on average, the cost of hiring a digital agency (that does paid media) on Clutch varies from USD 25 to 49 per hour globally.

At Mavlers (an Indian offshore digital marketing agency that offers paid media), we charge approximately USD 25 per hour (for different paid media services). 

Even though the scope and nature of the paid marketing services opted for are major factors influencing the final costs, factors such as the portfolio size of the agency you seek to partner with and their geographical location also have a role to play. 

Those with a proven ability to deliver results and a huge clientele will likely charge more, citing the trust factor, rather than a newbie who has yet to make a mark for themselves.  Also, if they are located in regions where labor costs run high, it will be reflected in the numbers in your final bill. 

Cost of outsourcing to social media agencies

An important point to note is that the advertising costs for services such as social media marketing and PPC are not included in the agency fees and must be accounted for separately. 

The real cost of hiring a social media marketing agency on Clutch is USD 100- 149 per hour. 

The cost is influenced by factors like the company’s expertise and the scope of delivery. The average hourly rate of different social media services offered at digital marketing agencies ranges between USD 25 and USD 49. At Mavlers, we charge approximately USD 25 per hour for SMM services. 

The SMM services could range from Facebook advertising to influencer marketing, Instagram, LinkedIn, Pinterest, Reddit, Snapchat, TikTok, and Twitter advertising. 

The factors affecting the cost of hiring a social media marketing agency are;

1. Engagement criteria
2. Resources utilized
3. Tools deployed for content creation, scheduling, and publishing
4. Location

The following infographic depicts social media marketing companies’ hourly rates by location.

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Cost of outsourcing to PPC agencies

Let’s now delve into the costs involved in outsourcing PPC services.

While the real cost of hiring a PPC agency on Clutch can range between USD 100 and 149 per hour, the ultimate monthly PPC cost may vary from a few thousand dollars to tens of thousands of USD.

At this point, it is important to note that the agency fees are separate from the Google Ad campaigns budget. 

There are multiple campaign management services that PPC agencies offer to their clients, such as;

1. Audience and keyword research
2. Managing bids
3. Ad spending
4. Copywriting ad copy and creating ad designs
5. Tracking conversions
6. Creating landing pages
7. Optimizing metrics

The services you opt for will have a role to play in the final bill. Here’s a look at the average hourly costs for each channel that companies may use for PPC advertising;

1. Amazon Advertising: $25 – $49
2. Baidu Advertising: $25 – $49
3. Google Ads: $100 – $149
4. Bing Advertising: $100 – $149
5. Spotify Advertising: $25 – $49
6. Yahoo Advertising: $25 – $49
7. YouTube Advertising: $25 – $49

To gain a deeper understanding of the costs of outsourcing PPC advertising at Mavlers, you may read our blog titled “How Much Does A PPC Project Cost At Mavlers?”

The location of the offshore PPC services agency can play a major factor in the final costs. Check out the infographic below to make the right decision;

If you want to view the costs of outsourcing other digital marketing activities, read our blog “How Do Offshore Digital Marketing Companies Price Their Services?”

Factors affecting the cost of outsourcing to paid media agencies

The final cost of outsourcing to paid media agencies will be affected by the following factors:

1. Ad platform

Every advertising platform has a different pricing structure for running ads, making it difficult to predict the cost of an ad campaign accurately. In addition, the management fees also vary according to the media spend range and the agency you choose to partner with. 

Also, remember to factor in the one-time initial set-up fees that paid media agencies usually charge, in addition to the management fee, to set up your ad account and get the campaign up and running. The initial campaign setup and optimization cost at Mavlers can range from $500 to $2500.

One-Time Account Set up covers the following:

• Business Understanding & Competitor Analysis
• Target Audience Identification
• Targeting Research
• Ad copy creation (offline) & Setup on the dashboard after approval
• Account setup
• Campaign creation (offline) & Setup upon the dashboard after approval
• Tracking and goal setup for respective platforms & Google Analytics
• If it is an existing account, then accounts hygiene check-up with an account audit process
• Make sure the relevant accounts are linked and we have edit access for those accounts
• Importing goals and audiences from Google Analytics

Some marketing channels, like Google Ads, Facebook, Instagram, and LinkedIn, allow businesses to choose between a cost-per-click (CPC) or cost-per-mille (CPM) depending on their online marketing campaign goals and target audience demographics. 

For instance, if you are a garment manufacturer targeting Gen Z audiences, trying to build brand awareness initially, then choosing a CPM model on Instagram, TikTok, and Google Ads may make much more sense than running ads on LinkedIn, which is great for B2B advertising.

2. Location

The location of the offshore paid media agency and where you plan to run your ads will affect the costs. 

Running ads in densely populated areas will cost more simply because more people will view them. Hence, advertising in larger, denser markets like Chicago and New York might prove to be more expensive, while smaller regions like Montpelier or Milwaukee might be more affordable.

That being said, it is essential to target the right audience. If you run a brick-and-mortar store, it makes sense to run local ads as well to rank for “near me” searches in your industry niche. 

The location of the offshore paid media agency you partner with will also have a role in the final costs. Agencies price their services depending on the cost of living in their region, expertise, knowledge, and experience. 

3. The size of your company

The greater the size of your company, the larger the media spend budgets, and the management fees charged by the agency will be proportionally higher. 

Such enterprises have complex goals, diverse audiences, and a varied selection of products/services that they want to advertise. 

Smaller firms/agencies, on the other hand, have limited budgets and would like to focus on fewer products/services. Such campaigns could be less complex, resulting in lower agency fees.

4. Agency experience & expertise

Paid advertising agencies with their fair share of experience and expertise in delivering results across a section of the client base will generally charge more than the new entrants. 

Here, you pay for the expertise and insights the established paid media agencies bring to the table. This is not to say that competitive pricing offered by newer agencies indicates their skillset! 

Benefits of hiring in-house paid media professionals

Building an in-house paid media marketing team comes with the following benefits.

1. Greater control & coordination

Building an in-house paid media marketing team gives you greater control over the campaign strategy, planning, execution, bid management, processes, and end results. 

You can always oversee every little detail and make changes, recommendations as and when they arise. 

2. Easier & more direct communication

With an in-house marketing team, you always have the option to communicate your marketing needs, goals, and objectives, changes in industry trends, or consumer demands as and when they arise.

3. 100% employee focus and flexibility in segmenting the in-house resource’s time

Hiring an in-house marketing team ensures that they will work only on your brand and its campaigns, unlike an agency, which might have multiple clients to cater to. This is not to say that agencies will not offer dedicated or committed investment toward your goals and projects. 

Depending on their skill sets, you can also deploy the same resource to cater to different service needs. For instance, PPC experts can be asked to tweak the ad copies or come up with more effective ones along with their campaign optimization and execution efforts. 

4. In-depth company knowledge/ brand familiarity

Another profound benefit of hiring in-house paid marketing professionals is the fact that they are quite familiar with the brand tone, target audience demographics, and local flavor. They are also privy to the brand vision and company goals, which ultimately translates into better, fine-tuned, and more effective paid marketing campaigns. 

Cost of hiring in-house paid media marketing talent

Let’s take a look at some numbers.

As per the findings of Salary.com, the average cost of hiring a PPC Specialist in the USA will be  USD 73,276 as of January 26, 2024 (it can range anywhere from USD 68,288 to 78,814, depending on education, experience, and skills). You can also factor in USD 22,886 as annual employee benefits. The total annual remuneration package for an in-house marketing coordinator comes to a neat figure of USD 96,162! 

According to the findings of Payscale, the average base pay in the US for;

• a social media manager is USD 57,230/ year
• a SEM specialist is close to USD 52,962 annually

These figures do not account for overheads like retirement benefits, gratuity, paid time off, assets, training, and healthcare.

Factors affecting the cost of hiring in-house paid media professionals

The following factors are known to play a role in taking the cost of hiring in-house marketing professionals up or down.

1. Initial sourcing, hiring costs

When you begin the process of hiring and sourcing paid media experts for your brand to build an in-house paid media marketing team, you spend a lot of time and money on not just different job board subscriptions and HR professionals but also expertise and credentials verification. 

2. Training and software costs

As a business owner, you also spend a considerable amount of time and money on training your new hires in the business processes as well as acquainting them with your paid marketing goals. 

You will also need to invest in buying relevant tools and tech stack to ensure seamless campaign execution. If your team is not familiar with using these tools, you will also have to train them, which will increase the costs.

3. Hidden costs

When you choose to hire an in-house team, you pay not just their monthly salaries but also for perks and benefits such as health insurance, retirement plans, etc.

 The cost of maintaining a workspace (office rent, utilities, supplies) and physical assets such as laptops must also be accounted for. 

Comparison: Outsourcing to paid media agencies vs in-house

In our sincere attempt to help you make the right decision for your firm’s paid marketing needs, we would like to present a handy pros, cons, and cost comparison table of both models. 

So, what’s next?

Now that you are clear on the costs of hiring an in-house marketing team vs. outsourcing to paid media agencies, you can decide on the path to take for your paid media marketing needs. 
You might want to familiarize yourself with the digital media activities that are best catered to in-house and those that you may consider outsourcing.