In-House vs Agency Marketing for eCommerce Brands

Coming from the brand world, I have asked myself this question many times. Should I hire an agency or should I just build the team in-house? Now I have been in the agency world for over two years, and unfortunately I still don't have a single answer!

It's a good debate, so let's work through it together. There are companies that should absolutely build their marketing teams internally. There are others that would unnecessarily inflate their P&L trying to recreate capabilities in-house that they could access more efficiently through an agency.

Most large brands have already landed on a mix.

Key takeaways:

• One marketing manager at the $166,790 median salary costs an employer about $238,000 a year once benefits are added.
• A seven person in-house specialist team runs about $1M a year in salary and benefits, before recruiting and software.
• In our hypothetical $20M brand, a hybrid model with three roles in-house and specialists rented costs about $640,000.
• 92% of brands with an in-house agency still hire outside agencies.
• Own your customer knowledge, strategy and P&L. Rent the specialists you can't keep busy full time.

The question to ask is what you should own

The question leaders making this decision should be asking isn't simply "Should we hire an agency or build an internal team?" It's "What capabilities does our business need to own, and which capabilities are more efficient to have an agency own?"

In my opinion, that distinction matters because eCommerce marketing has become increasingly specialized. A decade ago, it wasn't unusual for a strong digital marketer to manage paid search, email, SEO, analytics, and even portions of the website. I come from that world myself.

Today, each of those areas has evolved into its own discipline. Suddenly, the idea of hiring a few marketing generalists and expecting them to be experts across the entire eCommerce ecosystem becomes much harder to defend.

The real in-house cost isn't one salary

One of the biggest mistakes companies make when comparing an agency to an internal team is comparing an agency retainer to the salary of one employee. That's rarely an apples to apples comparison. If an agency gives you paid media, SEO, CRO, lifecycle marketing, analytics, strategy and creative expertise, the comparison isn't agency retainer vs one marketing manager. It's agency retainer vs the cost of assembling those capabilities internally. And bingo! The economics can change quickly.

According to the Bureau of Labor Statistics, the median annual wage for a marketing manager was $166,790 in May 2025. Salary isn't the full cost of an employee, either. In June 2026, wages were 70% of total employer compensation costs in private industry, and benefits were the other 30%.

Then there are recruiting costs, software, training, management time and turnover. SHRM's 2025 benchmarking puts the median time to fill a role at 44 days, and Gallup estimates that replacing an employee costs one half to two times their annual salary.

This is where the P&L conversation becomes important. A $5 million eCommerce company may need senior PPC expertise. It may also need CRO, sophisticated lifecycle marketing, SEO, analytics and creative strategy.

But does it have enough work in every one of those disciplines to justify five or six full time specialists? Maybe. In my experience, it doesn't, and that's one of the strongest economic arguments for an agency.

What a full specialist team costs

To make this concrete, here is what it would cost to hire one person for each discipline. We used the midpoint from the Robert Half 2027 salary guide for each role, and Salary.com where Robert Half doesn't list the role.

Salaries vary a lot by source and city, so treat these as midpoints. Indeed's job posting data puts a director of eCommerce at $145,129 on average, while Salary.com's median for the same title is $214,454.

Agencies let you rent expertise instead of owning all of it

I love the concept of “renting expertise”, keep on reading. That's the part of the agency model that is sometimes overlooked. You aren't simply buying hours, you're buying access.

You may need a very experienced PPC strategist, but you may not need 40 hours of that person's time every week. You may need a CRO specialist to analyze user behavior, develop hypotheses and structure an experimentation roadmap, but you probably don't need that person rebuilding your experimentation strategy every day.

A strong agency spreads those specialists across multiple accounts. That allows a company to access a deeper bench without carrying the full fixed cost of that bench. For the right company, that's a much more efficient use of the marketing P&L.

What agencies charge by discipline

Ask every agency how it charges. A percentage of ad spend ties the fee to your budget, so the fee grows as spend grows. A flat retainer is easier to plan around but needs a clear scope.

Paid media is where the specialist argument gets strongest

PPC has become increasingly technical, data driven, creative heavy and interconnected. The person managing millions of dollars in paid media needs to understand much more than how to launch a Google Ads campaign.

They need to understand bidding strategy, attribution, feeds, creative performance, landing page experience, conversion tracking, incrementality, profitability, and how paid acquisition fits into the broader economics of the business. Importantly, they need to recognize what works quickly.

An internal media buyer sees your account every day. A strong agency specialist may see what works and what fails across dozens of accounts, industries, platforms and experiments.

That doesn't automatically make the agency better. An internal employee will usually understand your product, margins, internal politics, inventory challenges and customers more deeply.

But agencies can have an advantage in repetition, and that exposure can dramatically accelerate learning. I see this every day: we work with many brands that have an in-house PPC generalist but use us to take them to the next level.

But agencies aren't automatically better

There is something I want to be very clear about: hiring an agency does not magically create expertise. A bad agency can be significantly worse than a strong internal team. Been there, done that.

Some agencies oversell senior expertise and then hand execution to junior employees. Others manage too many accounts per person, or optimize toward channel metrics rather than business outcomes. Agencies also lose people: Promethean Research puts North American agency staff turnover at 19% in 2025.

That is why companies shouldn't evaluate an agency based only on its list of services. The better questions are:

The advantage of an agency only exists if the agency actually gives you access to specialists. Otherwise, you're simply outsourcing your generalists.

The accountability question

There is another reason I believe agencies can work extremely well for performance oriented eCommerce companies: the relationship is naturally accountable. An agency is hired to perform a defined function for a defined investment, and that creates pressure.

Every month, the company sees the retainer leaving the P&L and should be asking: what did we get for it? That doesn't mean an agency can or should guarantee revenue.

No responsible marketing partner can control every variable affecting an eCommerce business. Inventory changes, pricing changes, competition changes, seasonality changes, websites break and consumer demand shifts.

That said, an agency should always be able to explain what happened, what it learned, what it changed and what it is doing next. The retainer should create accountability around progress, execution, analysis and business impact.

Internal teams need the same accountability, but it can become less explicit. That's normal: employees are part of an organization, not a vendor relationship. An agency relationship has a contract, a scope, expectations and ultimately a renewal decision, which creates a healthy pressure to keep demonstrating value.

Where in-house teams win

There are also areas where internal teams have an enormous advantage, and in my opinion the biggest is context. An employee sitting inside the company every day hears conversations an agency never will.

They know why inventory is delayed. They hear customer complaints, they know what sales is struggling with, and they see product roadmaps before they become briefs.

For businesses where marketing depends heavily on deep product knowledge (we have many of those clients), constant communication or rapid organizational change, that context can outweigh the benefits of external specialization. Researchers at Harvard Business School put it the same way:

Whereas “expertise, specialization, and objectivity” have long been the watchwords of external agencies (...), “efficiency, adaptability, and corporate influence” stand out as the mantra of today’s in-house teams.

Alvin J. Silk and Marta M. Stiglin, Harvard Business School Working Paper 15-093

Brand is another obvious example. Your brand shouldn't exist only inside an agency's Slack channel. Someone internally should understand your customer, positioning, commercial objectives, margins, priorities and long term direction well enough to make decisions.

The hybrid model: own the business, rent the specialization

For many eCommerce companies, the best answer isn't agency or in-house. It's both, and I see that happening successfully across verticals such as health and beauty and consumer goods. The ANA's research shows the same at large brands: 92% of those with an in-house agency still work with outside agencies.

The message is simple. Keep the people who need deep organizational context inside the company, such as a CMO, VP of Marketing, Head of Growth, eCommerce leader or brand leader who owns the marketing P&L. Then surround that person with specialists.

Paid media may sit with an agency. CRO may sit with an agency or specialist partner, and SEO may require technical expertise that doesn't justify another full time hire.

Email and SMS may eventually come in-house because the volume and customer knowledge justify it. Creative may be split between internal brand leadership and external production capacity, and the exact model should change as the company grows.

The important thing is that strategy and accountability never get outsourced completely. Someone inside the business still needs to own the number. The agency provides expertise and execution, and the internal leader provides context, priorities, commercial direction and accountability.

“In an ideal world, you’d always have both types of resources: deep, internal knowledge combined with an outsider’s perspective and experience.”

Rand Fishkin, co-founder of SparkToro (source)

Run the numbers for a $20M brand

Here is a hypothetical example to make the decision concrete. Take a $20M eCommerce brand that spends $40,000 a month on ads, which matches the 2.4% of revenue that companies put into paid media in Gartner's 2025 survey.

Gartner found marketing budgets average 7.7% of revenue, about $1.54M for this brand. Trade press coverage of the same survey puts labor at 21.9% of the budget and agencies at 20.7% (Chief Marketer), so about $656,000 combined. Gartner's respondents are mostly companies with more than $1B in revenue, so treat it as a reference point.

The hybrid version lands under the benchmark. The all in-house version runs about $350,000 over it, before recruiting, software or the 44 days it takes to fill each seat.

Your numbers will move with your city, your ad spend and the people you hire, so run this with your own figures.

Pros and cons of each staffing model

When does it make sense to bring marketing in-house?

There is absolutely a point where hiring internally becomes economically rational. If you're paying an agency for the equivalent of a full time person's capacity in the same discipline month after month, run the math.

If your paid media program has become large and complex enough to keep several senior people busy full time, building an internal acquisition team may make sense. Ezra Firestone, founder of Smart Marketer, described how far one good in-house buyer can go:

“I have one ads manager. He manages $15,000 to $20,000 a day in ads spend across Pinterest, Facebook, Google, and Instagram.”

Ezra Firestone, on the eCommerceFuel podcast (source)

If email and SMS require daily coordination across merchandising, promotions, loyalty, customer service and product launches, having lifecycle leadership inside the company may make sense. If your competitive advantage comes from producing huge volumes of brand specific creative, internal creative resources may become essential.

Set expectations before you move work in-house. In ISBA's 2023 study, 93% of advertisers expected faster turnaround from in-housing, but only 40% got it.

In the past, I never made this an ideological decision. It was purely operational and financial. Ask yourself: do we have enough ongoing demand for this expertise to justify owning it as fixed overhead?

If the answer is yes, hire. If the answer is no, renting access (I love this expression) to that expertise may be the smarter financial decision.

When does an agency make more sense?

An agency usually makes more sense when the company needs capabilities faster than it can hire them, when multiple specialties are required but none justifies full time headcount, or when the organization needs outside expertise to challenge an existing approach.

It can also make sense when flexibility matters. Employees are fixed costs, while agency relationships are generally more variable, so a company can expand, reduce or restructure an external scope much more easily than an internal organization.

There is also the management burden. Hiring doesn't stop when someone accepts the offer: employees need onboarding, training, career development, performance management, vacation coverage, leadership and eventually replacement.

Those aren't arguments against employees. They're simply real costs, both financial and operational, that belong in the calculation.

Conclusion

Ultimately, I don't believe companies should be trying to decide whether agencies or internal teams are "better." That's the wrong question. Instead, you should be asking: what should we own?

• Your customer knowledge? Own it.
• Your business strategy? Own it.
• Your P&L? Absolutely own it.

But every specialized execution capability? Maybe not.

From what I have seen in the past two years, the smartest eCommerce organizations build their marketing operating model around economics, expertise and accountability. Sometimes the right answer is hiring, sometimes it's an agency, and very often it's a strong internal leader surrounded by specialists who provide expertise exactly where the business needs it.

The goal isn't to build the biggest marketing department. It's to build the marketing capability your business needs without building a cost structure it doesn't.

If you're weighing this for your own team, tell us what you have in-house today and we'll give you an honest read on what to own and what to rent.

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