Why an in-house vs agency cost comparison is mission-critical
Choosing between building staff or hiring partners affects every dollar of growth capital. A disciplined in-house vs agency cost comparison clarifies total expense, expected output, and hidden risks before you lock in headcount or sign a long-term retainer.
5-Year Financial Snapshot
| Cost Category | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | 5-Year Total |
| In-House Salaries (4 FTEs) | $320k | $333k | $347k | $361k | $376k | $1.74 M |
| Payroll Taxes & Benefits | 25 % | 25 % | 25 % | 25 % | 25 % | +$435k |
| MarTech Licenses | $28k | $32k | $35k | $38k | $41k | $174k |
| In-House 5-Yr Cost | $2.35 M | |||||
| Agency Retainer ($18k/mo) | $216k | $223k | $230k | $237k | $244k | $1.15 M |
| Performance Bonuses (10 %) | $22k | $25k | $28k | $30k | $33k | $138k |
| Required Internal Liaison (1 FTE) | $80k | $83k | $86k | $90k | $93k | $432k |
| Agency 5-Yr Cost | $1.72 M |
Note: Figures use 3 % annual inflation.
Output & Speed Benchmarks
| Metric | In-House Build | Outsourced Agency |
| Time to First Campaign | 5–6 months (hire/onboard) | 4–6 weeks |
| Channels Covered | 2–3 until headcount grows | 5–7 from day one |
| Creative Volume / Qtr | ~40 assets | ~120 assets |
| Average ROAS (Yr 1) | 1.8× | 3.2× |
| Tech Innovation | Slower—budget-dependent | Faster—shared stack |
Hidden Factors in an in-house vs agency cost comparison
- Turnover Risk – Replacing a senior strategist averages 150 % of salary
- Knowledge Decay – Agencies cross-pollinate learnings from dozens of clients.
- IP Ownership – In-house keeps data/control; agencies can claim process IP—check contracts.
- Scalability Ceiling – Internal teams hit bandwidth walls; agencies flex with demand spikes.
- Compliance & Training – Certifications and legal updates sit on your P&L internally.
Decision Matrix
| Question | Lean In-House | Lean Agency |
| Is marketing core to competitive moat? | ✔ | — |
| Do you need multi-channel scale fast? | — | ✔ |
| Can you afford specialist salaries? | ✔ | — |
| Is budget predictability critical? | — | ✔ |
3 Winning Hybrid Structures
- Internal Strategist + Agency Production
- Agency Lead + In-House Content Creators
- Project-Based Agency + Seasonal Freelancers
These blends lower risk while preserving flexibility.
Frequently Asked Questions
Q: What about culture fit?
Culture weighs heavily—but measure it after you run the hard in-house vs agency cost comparison. Data first, vibes second.
Q: Can I start with an agency and transition in-house?
Absolutely. Many brands use outsourced experts for 18–24 months, then absorb proven playbooks internally.
Q: How many FTEs equal a typical agency retainer?
On average, one $18k/month retainer ≈ two mid-level specialists plus their software .
Conclusion
Your 5-year in-house vs agency cost comparison reveals more than price tags—it exposes speed, scope, and strategic risk. Plug your real numbers into the calculator, weigh hidden factors, and choose the model that maximizes profit while safeguarding agility.
