The Real Break-Even Point: When Does Going In-House PPC Actually Save B2B Companies Money?
Definitive Answer: The financial break-even point for moving B2B PPC operations in-house typically occurs when your total annual agency management fees, including all hidden costs, exceed the fully loaded cost of a single, competent in-house PPC specialist, which usually starts at around $90,000 to $110,000 per year.
This means a $7,500 to $9,000+ monthly agency retainer is the critical tipping point where internalizing the work becomes economically justifiable, provided the in-house team is given the right training and tools.
If you’ve ever found yourself asking,
“Are we really getting $10k a month worth of value from this agency?” you’re not alone.
When a B2B budget review comes around, the PPC line item is one of the first places finance and marketing leaders look to find savings.
It’s the constant tug-of-war between the predictable (but often painful) agency retainer and the perceived high cost of a fixed-salary internal hire.
The Specific Questions
How much does a fully loaded B2B PPC specialist really cost annually?
What is the minimum agency fee that justifies an in-house hire?
What costs, besides salary, should I include in my in-house vs. agency calculation?
What We’ll Cover
- How to calculate the actual cost of an in-house hire (it’s not just the salary).
- The three common agency pricing models and what they really mean for your budget.
- The crucial "non-cost" factors you must consider before firing your agency.
- Why you don't need a full-time PPC genius (and what to do instead).
💰 The In-House Cost Calculation: Beyond the Base Salary
So, you’ve started the in-house project. Maybe you’re fed up with the agency’s account churn, or perhaps your campaigns are so specialized that a vendor just can’t grasp the nuances. Great.
But here is the reality check: a $75,000 salary for a new PPC specialist doesn't mean your budget has only moved $75,000.
The number you need is the Fully Loaded Cost of an Employee (FLCE).
This is the number that makes finance happy. It is the number you must use to compare against a flat agency retainer.
What Goes Into the Fully Loaded Cost?
Think of it as the cost of having a human being in the company, not just their paycheck.
Salary: The base pay. Let's assume $75,000 to $90,000 for a capable B2B PPC specialist.
Taxes & Benefits: This is the big shocker. Payroll taxes, matching FICA, unemployment, and insurance add about 30–40% to the base salary.
Example: A $75,000 salary immediately becomes about $105,000.
Tools & Software: You can’t ask a specialist to operate blind. They need subscriptions for everything from bid management and reporting to competitive intelligence.
Budget: Plan for an extra $3,000 to $10,000 per year for essential tools like SEMrush, SpyFu, and advanced reporting dashboards.
Overhead & Training: This includes their laptop, desk space, and—crucially for a new in-house team—training and conferences.
Budget: Add another $2,000 to $5,000 per year to keep their skills sharp.
The takeaway: A specialist with a $75,000 salary costs your company about **$110,000 to $120,000 annually** just to sit at their desk and do their job.
🤝 The Agency Cost Breakdown: Exposing the Retainer
Agencies hide a lot of their fee structure behind vague "scope of work" descriptions. Before you can break even, you have to know exactly what you’re paying for.
There are three common models, and the one you have dictates your true break-even number.
1. The Flat Monthly Retainer
This is the easiest to calculate. You pay $X every month. This is the model that B2B companies who recently broke up with their agency are most familiar with.
Calculation: Monthly Retainer multiplied by 12 months.
The Catch: The agency gets paid the same if they do three hours of work or 30. Your internal team knows that.
2. Percentage of Ad Spend
The agency takes 10–20% of your total media budget. They have a direct incentive to tell you to spend more. Shocking, I know.
Calculation: Total Annual Ad Spend multiplied by Percentage Fee.
The Catch: If you’re a high-growth B2B that scales spend rapidly, your agency fees scale, but the amount of work doesn’t always. This can lead to your break-even point being hit fast.
3. Hybrid or Performance-Based
A lower retainer plus a percentage of ad spend or a bonus for hitting a specific CPA/CPL goal. This feels more fair, but it’s the hardest to benchmark against.
Calculation: (Base Retainer multiplied by 12) plus Variable Performance Fee.
The Catch: Did they hit the goal because they were brilliant, or because Q4 is always your biggest sales quarter? You have to pay extra either way.
🎯 The PPC Break-Even Point Formula
This is the only formula you need for the first phase of your decision.
The core financial break-even point occurs when your Annual Agency Cost equals the Fully Loaded Cost of One In-House Specialist.
Formula 1: Break-Even Point (Annual Agency Cost)
Break-Even Point (Annual Agency Cost) = Fully Loaded Cost of One In-House Specialist
Let’s use our conservative $110,000 Fully Loaded Cost of an Employee (FLCE) number.
Your company achieves the financial break-even point when your total annual agency costs reach $110,000.
Formula 2: Monthly Retainer Break-Even
To find the exact monthly fee that crosses this threshold:
Monthly Retainer Break-Even = (Fully Loaded Cost of In-House Specialist) / 12 months
Example: If your specialist costs $110,000 annually, the monthly retainer break-even is approximately $9,167 per month.
If your current agency management fee is consistently above $9,000 per month, it is now financially prudent to hire a full-time, in-house PPC specialist instead.
For those on a Percentage of Spend model, if your agency charges 15%, your break-even ad spend is **$733,333** annually ($110,000 divided by 0.15). Any ad spend over that, and you are better off with an in-house hire.
💡 The Alternate Path: You Don't Need a Full-Time PPC Genius
Hold on a minute. We’ve established that the financial break-even point is around $9,000 per month in agency fees. But that number hinges on the assumption that you must hire a $75k–$90k salary, fully-loaded specialist.
I’m here to tell you that’s a huge B2B misconception.
The old world of paid search required a full-time, hands-on operator. The new world, thanks to Google's Smart Bidding and automation capabilities, is different.
You do not need a $100k+ "paid search guru" to handle the day-to-day work. What you actually need is strategy, process, and expert oversight.
Shifting the Internal Role: Operator vs. Strategist
Instead of searching for that expensive unicorn, consider this more practical and cost-effective model, which leverages my training services:
Hire a PPC Operator (Junior/Mid-Level): This person focuses on the operational tasks. Think budget checks, maintenance, reporting pull-outs, and basic bid adjustments. I have trained people who have never done Google Ads to capably manage this workload.
Invest in a Fractional Strategist (That's Me): You bring in an expert like me for the high-level work: the 90-day strategy setup, campaign structure, advanced audience mapping, and monthly/quarterly deep-dive check-ins.
This drastically changes your Fully Loaded Cost of an Employee (FLCE).
The New Break-Even Calculation: Training Your Own
If you hire a bright, dedicated person—maybe someone already in your marketing department—at a $50,000 salary (FLCE aprox $70,000) and pair them with a fractional expert, your immediate fixed cost is much lower.
The goal is to get 80% of the maintenance done capably in-house with a junior resource, leaving the 20% high-leverage strategy to an outside expert.
The goal is to get 80% of the maintenance done capably in-house with a junior resource, leaving the 20% high-leverage strategy to an outside expert.
This is a maintenance-focused framework where the junior team member manages the basics and tracks key metrics, and the expert steers the ship during regular check-ins, preventing costly strategic errors. This approach makes PPC much easier to manage internally and yields better results for far less than the $9,000/month agency retainer.
✅ Practical Takeaway: Stop Paying Retainers and Start Building
The most common reason in-house teams fail isn't talent; it’s transition. You fired the agency, hired a junior operator, and now they are staring at millions of dollars in ad spend with no roadmap.
The biggest mistake is thinking you have to figure out the Build and the Train simultaneously.
You don't. That's what I do.
Stop Hiring Unicorns. Start Training Specialists.
If you're an in-house B2B team that has either just fired your agency or is actively planning an exit, your challenge isn't budget—it's execution.
My 90-Day Build & Train Program is designed to solve the two biggest problems at once:
- BUILD: We build the campaigns and tracking correctly from the ground up, tailored specifically for B2B lead generation.
- TRAIN: I train your newly hired junior operator in the core, repetitive tasks required for success, making the day-to-day PPC maintenance easy.
This path saves you the expense of a senior hire while giving you immediate, expert-level strategy.
