Insourcing vs. Outsourcing

There’s work to be done. That’s the good news. The next step is to identify the best way to do it. When you tackle a staffing challenge, there are generally two solutions at your disposal: insourcing and outsourcing. This is also true for agencies. There are real benefits and potential drawbacks to both. So, this is not about figuring out which option is better, but which one is better for you.

Insourcing results in the closest possible partnership between your operational team and your agency. There’s ample opportunity to ensure a deep focus and understanding of the brand since you both live and breathe it every day. Efficiencies can multiply when your insourced agency talent integrates more completely with your internal staff. Affording them a seat at the table means you benefit from their expertise in real-time with fewer communication barriers and maximum transparency. Afterall, you are all on the same team! Additionally, if you have significant spend levels there is a point where insourcing is more cost effective than using an agency.

On the other hand, outsourcing can be an especially good fit in a couple scenarios. Does your advertising fluctuate throughout the year? If so, outsourcing could result in good cost efficiency for your brand. When you aren’t ‘in market’ you aren’t carrying the expense of agency staff and when you need the team they are ready to go. Another big advantage is expertise. Malcom Gladwell said it takes 10,000 hours to become an expert at something. Outsourced agencies focus on the same tasks day in and day out developing deep expertise in those skills. In doing so they also get to see what other brands are doing. They learn from these experiences and can bring that expertise to your brand. Finally, turnover is something that they have to manage. In order to maintain competitiveness they need to keep staff trained and benches strong in case someone decides to leave the company. If you have an outsourced agency and they lose a team member there is a good chance there is someone else ready to fill that gap.

For non-seasonal businesses with high spend levels, insourcing can create a great opportunity for cost savings. If your business is seasonal, it is important to proceed a bit more cautiously. Insourcing changes a variable cost to a fixed one. When advertising spend dips, the relative cost of service swells, as those employees have less productive work to accomplish. The onus is on your team to remain current on cutting-edge techniques and technologies, since your insourced agency will only touch your brand on a day-to-day basis. And it’s important to plan for the higher risk of employee turnover. Ultimately, every business is unique. Your specific needs will dictate whether outsourcing or insourcing is the best fit for your company or project.

At FiveFifty, our goal is to be an effortlessly integrated partner to our clients. We genuinely feel the best work happens when the connection between your team and ours feels deep and transparent. To be frank, that’s not always something that brands want. However, we have found that when we can act as a natural extension of your organization, we can better serve you. We can bring a lot of the benefits that insourcing brings through our partnership, while helping clients minimize the cons of hacking it alone.