A mid-level in-house digital marketer costs about $114,500 in the first year once taxes, benefits, hiring, ramp-up, tools, training, equipment and your own management time are added to a typical $70,500 salary. That is about $9,540 a month, the same as roughly 75 hours of agency work at $125 an hour. Below that volume an agency or freelancer usually costs less; above it, every month, a hire starts to pay, if you can recruit, manage and keep the right person.
Four ways to staff your marketing, side by side
Each option buys a different mix of skills, hours and owner time, so the cheapest one depends on how much work you have and how many skills it needs.
| Option | What you pay for | Skills you get | Your time | Best when |
|---|---|---|---|---|
| In-house hire | Salary, taxes and benefits, hiring, ramp-up, tools, training, equipment | One person, usually a generalist | Hiring, plus about 3 hours a week managing | Steady work above about 75 hours a month |
| Freelancer | An hourly or project rate | One specialist skill per person | High: briefing, checking and coordinating each person | One defined task or a small budget |
| Agency | A monthly fee or a share of ad spend, often a setup fee | Several specialists: strategy, buying, creative, tracking | About 1 hour a week for briefs, approvals and reviews | Several skills needed at under about 75 hours a month |
| Fractional or hybrid | A part-time senior lead, plus an agency or freelancers for delivery | Senior direction plus specialists | Moderate: you work through one lead | You want ownership and strategy without a full-time senior hire |
Ad spend sits outside every row. It is the same whoever runs the account, so leave it out of the comparison. To run these numbers with your own salary, hours and rates, use the calculator on our in-house vs agency comparison.
The fully loaded cost of one in-house marketer
A hire costs far more than the salary on the job advert. Add every cost the business carries because that person works there, including the hours you spend managing them.
For one mid-level digital marketer in the first year: about $114,500
The salary is a typical published salary-guide figure, in USD. Pay varies a lot by market, so swap in what the role costs where you hire.
| Cost line | Amount | Basis |
|---|---|---|
| Salary | $70,500 | Mid-range figure in Robert Half’s salary guide |
| Taxes and benefits | $21,150 | 30% of salary |
| Hiring | $1,200 | Median internal cost per hire |
| Ramp-up | $8,800 | Assumption: about 3 months at half output |
| Tools and software | $2,400 | A lean stack, about $200 a month |
| Training | $1,250 | Average direct learning spend per employee |
| Equipment and space | $2,000 | Assumption: laptop, seat, desk or remote allowance |
| Your management time | $7,200 | Assumption: 3 hours a week, 48 weeks, at $50 an hour |
| Total | $114,500 | About $9,540 a month |
Where the data gives a range, this example takes the figure that favours in-house. Bureau of Labor Statistics employer cost data shows benefits at 30% of total compensation, which is about 43% on top of wages; we apply only 30% to salary because smaller employers often pay less.
Two costs are left out of the total on purpose. A recruiter typically charges 15% to 25% of first-year salary, which would add $10,000 or more. And people leave: median tenure for workers aged 25 to 34 is 3.0 years, and Gallup estimates that replacing an employee costs one-half to two times their annual salary. In later years hiring and ramp-up fall away, until a replacement brings them back.
The break-even point: about 75 hours of skilled work a month
Divide the hire’s monthly cost by an agency’s hourly rate and you get the volume of work at which the two cost the same. At $125 an hour, $9,540 a month buys about 76 hours.
The $125 rate sits inside the band most listed agencies charge, $100 to $149 an hour on Clutch, though some charge $175 or more. Change the rate and the break-even moves with it.
Read the result honestly in both directions. Per hour, the hire is cheaper: 1,700 productive hours a year puts them at about $67 an hour. But those are one generalist’s hours, while 75 agency hours can be spread across a buyer, a designer and an analyst. If your marketing needs, say, 20 to 60 hours of skilled work a month across several skills, a full-time hire means paying for hours you do not use, or for skills the person does not have.
A hire costs less per hour. An agency costs less until you need about 75 hours of skilled work every month.
Most agencies quote a monthly fee rather than hours, so ask how many hours and which roles a quote covers. Our guides to what a marketing agency costs and to percentage of ad spend vs flat fees cover the market ranges.
What each option does well, and where it falls short
None of the four is better in general. Each has a real strength and a real weakness, and the right choice is the one whose weakness you can live with.
A dedicated hire
Lives inside the brand, is there when you need them, and costs less per hour at full-time volume.
- Strength
- Knowledge stays in the business
- Weakness
- One person’s skills, and fragile if they leave
A specialist by the hour
Marketplace medians run from about $20 to $45 an hour for PPC, though experienced specialists charge well above that.
- Strength
- Low cost, easy to start and stop
- Weakness
- Uneven quality; you manage the joins
A team on a retainer
Several specialists and experience from many accounts, for less than one salary at low volume.
- Strength
- Breadth of skills and cross-account insight
- Weakness
- Account-manager changes, shared attention, fees
A part-time senior lead
The middle half of fractional marketing chiefs charge $125 to $200 an hour, for strategy and ownership.
- Strength
- Senior judgement without a senior salary
- Weakness
- Direction only; delivery still needs hands
Agencies have known weak spots. In one marketing relationship survey, 48% of clients named delivery issues as the main reason they left an agency, and client reviews often mention account managers who move on. When an agency relationship ends, much of the reasoning behind past changes can leave with it.
In-house has its own. A marketing chief at a sports league who moved work in-house told Digiday the team got more for its money, but lost the wider performance insight agencies gain from running many kinds of campaigns, and found media buying took more time than expected. A marketing VP who brought digital marketing in-house twice, at large companies, said the move was mainly about cost, and would still keep programmatic and video with an agency.
Freelancers split opinion too. In one founders’ discussion, a commenter argued that a wrong freelancer costs less and is easier to replace than a wrong agency; another replied that a lone freelancer rarely pushes back on your ideas.
When each option is the wrong choice
Ruling options out is often the clearest way to choose.
When an agency is the wrong choice
- You have more than about 75 hours of steady, always-on work every month, and the skills to manage a hire
- The work depends on daily, close knowledge of the product, such as fast-moving launches or constant stock changes
- Your budget sits below the minimums agencies set, which most commonly sit at $1,000 to $3,000 a month for paid media
- Your fee is a share of ad spend and spend has grown to the point where the fee exceeds the cost of a team
When in-house is the wrong choice
A hire is a fixed cost for a variable need, so it fits poorly when the need is small or uneven.
- The work needs several skills, such as buying, creative and tracking, that one person is unlikely to cover well
- Your volume is well under 75 hours a month, or swings with the season
- Nobody in the business can brief, judge and develop a marketer
- You need results sooner than a new hire can usually reach full output
Matching a full in-house team is a bigger step again. A manager, a specialist, a designer and a copywriter at mid-range guide salaries come to $323,500 before benefits, and about $440,000 a year once loaded.
The hybrid option: own the strategy, rent the skills
A hybrid keeps ownership of marketing inside the business and buys specialist skills from outside. It is the norm at large advertisers, and it scales down well.
For a smaller business, a hybrid usually means one in-house marketer or a fractional lead who owns the plan and the numbers, with an agency or freelancers on specialist channels. A practitioner who ran ad spend at a large agency and later led an in-house team made the same case in a public discussion: keep a core of competence inside the company, and use agencies to fill the gaps.
Worth knowing: whichever option you choose, keep the ad accounts in your name. Google’s advertiser guide says a third-party agency must set up a separate Ads account for you, and Google gives account admins control of billing and user access. Keep admin access yourself, and the history stays with you if anyone leaves.
Work out your own numbers
Our comparison page has a calculator that runs this sum with your own salary, hours and agency rate, and the full comparison as a PDF you can share with your team.
Questions to answer before you decide
Your own answers decide this more than any average does.
How many hours of skilled work do we need each month?
How many different skills does that work need?
Who will manage and judge the work?
How soon do we need results?
What number will we judge the work by?
Set it in advance, from your own orders or CRM, whoever does the work. On our services page, each service sets out its scope.
What owners ask about in-house vs agency marketing
Is a freelancer cheaper than an agency?
Usually per hour, yes, and for one defined task a freelancer is often the cheapest good option. The gap narrows once you need several skills, because you then hire, brief and coordinate several freelancers yourself, and that time has a cost.
What is a fractional marketing team?
It is senior marketing leadership bought part-time, often a fractional marketing chief working a set number of hours a week, paired with specialists who do the hands-on work. It suits businesses that need strategy and ownership but not a full-time senior salary.
Should my first marketing hire be a generalist or a specialist?
A generalist usually fits a first hire, because early marketing covers many small tasks across channels. Bring in specialists, freelance or agency, for the channels where depth matters most, such as paid media or tracking.
Can we move from an agency to in-house later?
Yes, and it is easier when the ad accounts, pixels and analytics already sit in your name with you as admin. Ask the agency to document what it changed and why, and plan an overlap so the new hire learns the accounts before the agency steps back.
Is in-house cheaper when we spend a lot on ads?
It can be, especially when the agency fee is a share of ad spend, because the fee keeps rising with spend while the work does not rise as fast. At high, steady spend, compare the fee with the fully loaded cost of a team before you renew.