Anyone who follows my blog or LinkedIn posts knows I rarely speak in absolutes. Our world is just too nuanced. But I’m about to break my unspoken rule by stating a pretty big one:
As marketing salaries continue their skyward march, outsourced marketing is the only feasible model for growth-minded middle market companies that want a strong ROI.
There. I said it. (And it took a lot for me not to backspace, backspace, backspace.)
Before I go further, let me say unequivocally: I am NOT suggesting that outsourcing your marketing to our firm is the only way to go. There are other marketing firms that offer an outsourced marketing model and produce good work that gets results. We’re not the right fit for every business.
But if you run a middle market company and you’re serious about accelerating growth and getting a measurable return on your marketing spend, I’m convinced the only way to do it in this age of skyrocketing marketing salaries is to outsource.
Oh, How the Times Have Changed
In 2016, I hired a Marketing Manager with seven years of experience for $65,000 and no benefits. Today, a hire with the same credentials, performing the same role, would command low six figures. And that doesn’t include common benefits like medical insurance, 401k matching, or bonuses, which bumps the cost by $35k or more.
That’s not just my experience. It’s happening all over. Data from staffing giant Robert Half forecasted that starting salaries for professional occupations would rise by 3.8% in 2022 (they likely undershot that projection). And they listed “digital marketing specialist” as one of the most in-demand positions, expected to snag even bigger increases.
The further up the chain you go, the more startling the numbers become. The average salary for an in-house Marketing Director now stands at a whopping $181,405, per Emeritus. These professionals often operate like a Chief Marketing Officer (CMO), though they typically have not only less experience but less relevant experience and credentials than an effective CMO should. (Our blog on The Fractional CMO Fake-out lays out the troubling trend of unqualified CMOs preying on good companies.) So while this highly paid Marketing Director might be qualified to lead a marketing team, I wouldn’t be sure they could guide the marketing function, which starts with developing a strategic marketing plan based on discovery and research.
You can blame the pandemic, inflation, and remote work for driving up marketing salaries. But there’s a more fundamental factor at work, too: Companies are seeing the immense value and direct impact marketing can have on their top and bottom line, so they’re willing to pay a premium for marketing talent. Growth-minded middle market companies recognize that strategic marketing enables them to punch above their weight and achieve better results than competitors with bigger budgets. It’s hard to argue with that.
The Math Makes it Clear
Salaries aside, there’s a lot more than finance to consider when you’re deciding whether to outsource your marketing function or build a full in-house staff. As we addressed in a recent blog, it takes a diverse team of specialists to do growth marketing right. And ideally your core group has knowledge and experience in your industry, plus broad experience across many businesses. It’s just not feasible to assemble that type of team in-house.
But let’s say you’re a numbers person and you mostly want to know which model the math favors.
Here’s what the budget looks like if you hire a three-person in-house marketing department (a pretty lean model, given marketing’s complexity) at current average salaries vs if you outsource the marketing function. Of course, it’s fictitious, and every middle market company will have different needs, but it’s close enough for illustrative purposes.
Example of In-House vs. Outsourced Marketing Department Budget
In this example, not only do you save an estimated $150k+ by outsourcing marketing; you also get a wider team of specialists executing your marketing plan and driving predictable growth.
The reality is, hiring a lean team of three in-house generalists leaves you needing to outsource (and find budget for) critical functions like content development, graphic design, and paid media, at a minimum. And it leaves you without a seasoned CMO to set your marketing strategy and develop a research-based marketing plan.
So the estimated $150k in savings is conservative, especially if you hire from major metro areas (where salaries are growing at 25-35%) or you can snag a superstar or a specialist who knows how to leverage tools like AI and big data to drive even higher ROI (both of which you’ll pay a premium for). Never mind the high cost of turnover. And let’s face it: Job hopping for dollars no longer has the stigma it once did, and it’s easier than ever to do.
Whether the savings amount to $100k, $150k, $200k, or more isn’t the point. Once you hit six figures, that’s real money you could be spending on marketing execution that will drive more revenue, faster. Allocating too large a percentage of your marketing budget to salaries for FTEs—some of which you don’t even need full time—erodes your ability to generate results.
Why the Outsourced Marketing Model Works
And that brings me back to my bold opening statement: I firmly believe the outsourced model is the only way for a growth-minded middle market company to engage in marketing that drives measurable results.
When it’s done right, outsourced marketing is the best way to optimize both your marketing budget and your ROI. And soon, it will be the only viable way for middle market companies to turn marketing into a growth driver.
By getting just the right slice of all the marketing specialists you need, based on your specific marketing plan, you align your resources directly to your needs. (No highly paid senior professionals getting into the weeds on HubSpot.) By avoiding the pitfalls of hiring FTEs for roles you don’t need full time, you free up more budget to develop and execute a strategic marketing plan that makes a business impact. And by reducing your FTE hire commitment, you gain more flexibility to scale up/down and adapt as your environment changes.
Seven years ago, I would never have stated in absolute terms that outsourced marketing is THE only way for growth-minded middle market companies to engage in marketing that drives predictable revenue. But then again, seven years ago a pretty good Marketing Manager only cost you or me $65,000 in base salary.