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The Pros and Cons of Inhouse or Outsourced Marketing efforts

Jeff Kershner

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May 1, 2005
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To outsource or bring in-house your dealerships marketing efforts - that's always the question...

What do you think?
What has been your experience?
 
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John.H

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Nov 12, 2018
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John
Well there's definitely benefits to either one. I'll try and say this as unbiased as possible, transparently - I work on the Vendor side of the business.

Here's a short Pros & Cons list I've made, just to put things into perspective:

Pros of Hiring Marketer(s) In-House:

* You can control the sources in which you advertise on.

* You'll deploy advertisement campaigns in a more timely manner.

* Your chances of being in non-compliance lawfully are certainly lower. (things are most likely pre-approved before ran)

* The methods of advertising may be more lucrative. Fresh eyes bring innovation to the table.

* Quick resolution in the event a campaign were to go south. (less bottlenecks & moving parts on the dealer side)


Cons of Hiring Marketer(s) In-House:

* Most new hires are inexperienced.

* Benefits, paperwork, and standard procedure of a new hire.

* Might cost more than a Vendor.

* Likeliness to fail is much greater.

* Will need time to fail and learn from mistakes.


Pros of Hiring a Digital Vendor for Automotive Sales Marketing:

* Likeliness of running a successful campaign is much greater.

* Usually very hands-off and requires little intervention.

* Problems are usually resolved much faster. (comes from experience)

* Usually more cost effective than hiring somebody in-house.

* Understands the complexities of advertising in the automotive business.

Cons of Hiring a Digital Vendor for Automotive Sales Marketing:

* Non-innovative. Tends to stick to one thing that works, and is reluctant to try anything different.

* Campaign customization only exists in small Digital Vendors. Big Box Vendors don't typically customize things specific to tastes and objectives.

* Usually slow in support, and slow to correct problems.

* Can be clunky integrating the way they work into your operations.

* Pretty hard to attribute their services to Sales Metrics without taking a deep dive into things.
 
Apr 22, 2009
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Ryan
We should do this exercise for other areas.. BDC, and Warranty are a couple that come to mind.

I'm outsourcing our warranty admin to a small super niche company that handles GM dealers. What a beautiful thing!!

For a lot of smaller dealers it's so hard to justify a full time wage for warranty admin and the service manager is typically slammed with a million other things.

A few of my thoughts on what I'm outsourcing vs doing in house

In-House

- inventory photos
- Videos (90% of them)
- Social Media
- Email Marketing

Outsource:

- Warranty Admin
- BDC (sales and service)
- 80% of Graphic Design
- PPC and Facebook/Insta Ads (I still have a lot of input in the campaigns just not messing around with creating copy, loading photos, building audiences)
- Used Car Detailing for recon (don't have the space)

Would love to hear what other dealers are doing. @Jeff Kershner - Maybe this should be it's own thread.
 
Mar 21, 2012
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Ryan
To outsource or bring in-house your dealerships marketing efforts - that's always the question...

What do you think?
What has been your experience?
Unless you're a large group, I would advise most dealers against this path. It's so difficult to find and identify the "unicorn" candidate that has the skills to handle everything necessary nowadays. Hiring the wrong person for this role can easily cost your dealership $100K+ in wasted ad spend, missed sales/service opportunities, and compensation.

That being said, our group has brought everything in-house. 10 years ago, I started as a Northwood college intern at one store and have now built a 14-person in-house digital marketing agency for our 62-rooftop group.

Our in-house digital marketing agency consists of:
  • Digital Marketing Director - me :)
  • Performance Manager - Hosts monthly performance meetings with each store going over last month's stats and strategizes for future months.
  • Paid Ads Manager - Manages all digital advertising campaigns across Google, Microsoft, Facebook/Instagram, Waze, Hulu, Spotify, Snapchat, LinkedIn, and Pinterest.
    • 2 Paid Ads Specialists - Assists Paid Ads Manager in launching and managing digital advertising campaigns.
  • Website Marketing Manager- Manages all aspects of our online web presence.
    • 2 Website Support Specialists - Audits, tests, and coordinates with vendors to fix.
    • Developer - Creates custom software and web apps for our internal staff.
  • Content Writing Team
    • Communications Manager - Manages our internal and external communications activities including press releases, employee spotlights, community philanthropy, etc.
    • Technical Writer - Creates informational content for our websites (model overviews, comparisons, etc).
    • Blog & Social Media Writer - Creates engaging content to be shared on social media and our blogs.
  • Reputation & Community Manager - Replies to all online reviews and social media interactions.
  • Videographer- Visits each store shooting videos for use on our websites, Facebook ads, etc.
  • Graphic Designer - Designs graphics for in-store promotional materials, online ads, etc.

The pros of having our in-house agency:
  • Innovative - We're always staying on the cutting edge and are more reactive to change than most vendors.
  • Save Expense - Digital ad spend is probably where we save the most money. Since we manage everything in-house, there's no management fees or markup. And more importantly, there's little waste.
  • Better Performance - Despite what they say, most vendors offer cookie-cutter solutions with average performance. Vendors are focused on scalability - servicing as many dealers as possible with as little staff expense as possible.

The cons of having our in-house agency:
  • OEM Mandates - Over the past few years, OEM's have started tightening the reigns on digital advertising by requiring dealers to use their preferred vendor(s). This often means that we're forced to decide between getting co-op dollars and using a sub-par vendor or forego the co-op dollars and continue in-house.
  • Constant Change - The digital marketing space is constantly changing so we have to stay abreast of new platforms and policies. (Google HEC ads, Facebook iOS 14, etc)
  • Vendor Barrage - If a dealership has a bad sales month, they can't just cancel vendors on a whim, having an in-house agency is a long-term commitment. The dealerships are also constantly barraged by vendor pitches so they have to have full faith that our in-house agency does a better job.

As dealers continue to consolidate into larger groups, I truly believe having an in-house team is a necessity to be able to effectively create strategies to compete against Carvana, Vroom, etc. Lithia's Driveway.com is the perfect example of this.

Whereas, single-point stores and smaller groups should primarily rely on outside vendors but should still have someone in the dealership focused on managing those vendors.
 
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Jun 11, 2021
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Jo
The cons of outsourcing are less significant than the clear benefits of the service. This is what ensures its growing popularity around the world. The main advantages of external management are the reduction of gross costs and the freeing up of the company's resources for conducting core activities.
The contractor performs the same functions as his partner in the form of a full-time division of the enterprise. The obvious benefits of outsourcing personnel associated with the delegation of personnel management processes are attracting an increasing number of successful entrepreneurs. Experienced businessmen prefer outsourcing to maximize the efficiency of the company.
 
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Reactions: Ryan Everson
Apr 16, 2021
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Stanley
I would prefer the outsourced one, because you can get real benefits and reduce the cost. You need to hire different people but you are not able to know about their knowledge and results (if to speak about in-house marketing). If you hire a company - they know how and what to do. I think the same is in BDC services, because this is our strong point and it really works.