PPC Agency vs In-House: UK Founder's Cost Guide

I see this question pop up all the time, and the debate is usually framed completely wrong. It's not a simple choice between two options, like picking between a Ford and a Vauxhall. It’s a strategic decision about where your business is *right now* and where you want it to be in 12 months. Most founders get this wrong. They either hire an expensive agency too early and burn through cash, or they try to build an in-house team without understanding the real costs and end up with a mess.

The truth is, both paths can lead to incredible growth or be a catastrophic waste of money. The difference is understanding the trade-offs. You're not just choosing who clicks the buttons in Google Ads; you're choosing between speed and control, between immediate expertise and long-term asset building, between a variable cost and a fixed overhead. Let's break down the actual numbers and scenarios so you can make a decision based on maths, not marketing fluff.

So, what are the real costs of an in-house team in the UK?

This is where most business owners get their sums completely wrong. They look at a PPC Manager's salary on a job site – say, £45,000 – and think, "Right, that's my cost." That figure is dangerously misleading. The 'Total Cost of Employment' is a much bigger, uglier number. You've got National Insurance contributions, pension contributions, recruitment fees, software licences, training budgets, management overhead, and the cost of the inevitable mistakes a new hire will make.

A junior hire might have a lower salary, but they'll need constant supervision and expensive training. They'll also make bigger mistakes, potentially wasting thousands on poorly structured campaigns. A senior hire costs more upfront but should, in theory, get up to speed faster. But even they will have a learning curve with your specific business and industry.

Let's not forget the tools. A professional paid ads setup requires a suite of software for analytics, call tracking, competitor research, and creative production. A single seat for a decent tool can be hundreds of pounds a month. An agency spreads these costs across all their clients; you have to bear the full cost for just one team. Suddenly, that £45k salary is looking more like £70k-£80k in actual, out-the-door cost for your first year. And that's before they've even generated a single pound of revenue.

I've built a calculator below to give you a more realistic picture. Play around with the numbers. It's an eye-opener for most founders.

So how do agency fees stack up against that?

This is where it gets interesting. An agency looks expensive on a monthly basis, but when you compare it to the true cost of an in-house hire, the picture changes dramatically. Agency fees in the UK can vary wildly, but they generally fall into three buckets:

• Fixed Monthly Retainer: You pay a set fee each month, regardless of ad spend. This is common for smaller accounts or for specific project work. It gives you predictable costs.
• Percentage of Ad Spend: The most common model. The agency takes a cut of what you spend on ads, typically between 10-20%. This aligns their incentive with spending your money, which can be good or bad depending on the agency's focus on profitability.
• Performance-Based: This sounds great in theory – you only pay for results (e.g., per lead or a percentage of revenue). However, these deals are rare and often come with complex terms. They work best for businesses with very clear, trackable conversion events like e-commerce sales.

Let's say a decent UK agency charges you a £2,000/month retainer. That's £24,000 a year. Compare that to the £65k+ true cost of an in-house person. For that price, you're not just getting one person. You're getting access to a strategist, a copywriter, a data analyst, and an account manager. You're also getting the benefit of their experience across dozens of other accounts. They see what's working in other industries and can apply those learnings to your campaigns instantly. This is a massive advantage that an in-house person, working in a silo, simply can't replicate.

One campaign we worked on was for a home cleaning company. We got their cost per lead down to just £5. An in-house person might have taken six months to get there; we did it in weeks because we'd seen similar challenges with other B2C service clients. That speed is what you're paying for. You're paying to skip the expensive learning curve. An agency isn't a cost centre; it's an investment in rapid, expert execution. But you need to know what agency fees really cover to properly judge the value.

When does it actually make sense to hire an agency vs go in-house?

There's no single right answer, but there is a logical framework for making the decision. It mostly comes down to your monthly ad spend and the complexity of your business. Below is a flowchart that maps out the decision-making process I walk founders through.

If you're spending less than £2,000 a month on ads, honestly, neither option is great. An agency's minimum fees will eat up too much of your budget, making it almost impossible to get a decent return. At this stage, your best bet is to spend a weekend learning the basics of Google Ads or Meta Ads yourself. Your time is better spent proving the channel works before you commit serious money.

Once you're in the £2,000 - £15,000 per month range, an agency is almost always the right call. You have enough budget to make the fees worthwhile, and the agency's expertise will get you results far faster than you could on your own or with a junior hire. This is the growth stage where speed is everything.

Above £15,000-£20,000 per month, the maths starts to shift. The percentage-of-spend fees from an agency can start to look like a full-time salary. At this point, the conversation about building an in-house team becomes much more serious. You have proven demand, a stable budget, and the need for deeper integration between your marketing, product, and sales teams. This is the point where the control and focus of an in-house team can start to outweigh the speed and breadth of an agency.

So how do you find a good UK agency that isn't all talk?

This is the million-dollar question, isn't it? The UK is flooded with agencies, from one-man bands working out of their bedrooms to massive corporate networks in London. Finding the right one feels like finding a needle in a haystack.

First, ignore the vanity metrics and the flashy awards. They mean nothing. What you need to look at is their track record with businesses like yours. Ask to see case studies. Don't just look at the headline numbers; read the story. What was the problem? What strategy did they implement? What were the actual, tangible business results? If they've worked in your niche before, that's a huge plus. We've managed campaigns for everyone from medical recruitment SaaS to eCommerce cleaning products, and that experience means we can avoid common pitfalls that a generalist agency might fall into.

Second, get on a call with them. A good agency will offer a free initial consultation or account review. This isn't just a sales pitch. It's your chance to see how they think. Do they ask smart questions about your business, your customers, and your margins? Or do they just jump straight to promising you a "#1 ranking"? Tbh in paid advertising, you can't really promise anything. If they make wild promises, run a mile. Look for expertise and a realistic approach. The goal of that first call is for you to learn something valuable, whether you hire them or not.

Finally, look for transparency. How will they report on performance? How often will you communicate? What does the onboarding process look like? A professional outfit will have clear answers to these questions. Finding and vetting the right partner is a skill in itself, and it's probably one of the most important decisions you'll make, so it pays to get it right. If you're new to this, it can feel overwhelming, but there's a clear framework for hiring an agency even if you feel clueless about paid ads.

The Hybrid Approach: The Best of Both Worlds?

I mentioned earlier that this isn't a permanent decision. The smartest companies I see don't think in terms of "agency OR in-house." They think in terms of "agency AND in-house." The relationship evolves. You might start with an agency to get things off the ground quickly and establish a baseline of performance. They handle the day-to-day campaign management, testing, and optimisation.

As you grow, you might hire an in-house marketing manager. Their job isn't to replace the agency but to *manage* them. They become the strategic bridge between the agency's tactical expertise and the company's internal goals. They can feed the agency with insights from the sales team, updates on product development, and customer feedback that is gold dust for creating better ad copy and targeting. The agency, in turn, keeps the in-house manager up to date on platform changes, new strategies, and competitive trends.

Eventually, as your ad spend climbs towards £50k/month or more, you might decide to build out a full internal team. But even then, you might keep a specialist agency or consultant on a retainer for high-level strategy, auditing, or for help expanding into new, unfamiliar channels. For many UK startups, figuring out whether to start with an ad consultant or go the DIY route is the first major hurdle, and the hybrid model offers a path forward.

This tiered approach allows you to tap into specialist expertise exactly when you need it, without taking on the massive risk and overhead of a full-time team before you're ready. It acknowledges that your needs today won't be your needs in two years' time.

My Final Recommendations

There's a lot to take in here, I know. It's a complex decision with significant long-term consequences for your business's growth trajectory and cash flow. To make it a bit simpler, I've broken down my main advice into the table below. Use it as a quick reference guide to see which path aligns best with your current situation.

Remember, the goal isn't just to "run ads." The goal is to build a profitable, scalable customer acquisition engine. The 'how' is secondary to the 'what'. Focus on the outcome you need, and then choose the vehicle – agency, in-house, or hybrid – that will get you there most effectively at your current stage.

Ultimately, the choice to hire a PPC agency or build an in-house team isn't just a financial one; it's a strategic one that reflects your company's stage of growth. Making the wrong choice can set you back months and cost you tens of thousands of pounds. Making the right one can be the catalyst that unlocks your next level of growth. There are many factors to consider when building your paid ads team vs hiring an agency, but I hope this guide has given you a clearer framework for thinking through the problem.

If you're still unsure which path is right for you and want a second opinion on your specific situation, we offer a completely free, no-obligation strategy session. We can take a look at your current setup, your goals, and give you an honest assessment of what we believe would be your most profitable next step. Sometimes, the best advice is the one that doesn't immediately lead to a sale.

Hope this helps!