How Should SMEs Structure Their Marketing Function?

June 27, 2026

Over the years I’ve worked with hundreds of SMEs and, if I’m honest, very few of them deliberately designed their marketing function.

Most arrived there by accident.

A website was built. A relationship was formed with a web developer. The web developer started helping with SEO. Then Google Ads. Things like hosting and email support. Then social media support. Before long, they had effectively become the marketing department.

There is nothing wrong with this. In fact, for many smaller businesses it is often a sensible and cost-effective place to start.

Quite a few digital marketing agencies are formed almost by accident. Web developers build websites, then help out with basic SEO, then get asked about Google Ads, then take on social media and before long find themselves running a digital marketing agency they never originally intended to create. Most are quite capable.

The challenge comes later.

Let’s consider how most businesses evolve over time, often via a series of decisions made over many years.

An agency gets appointed.
A freelancer gets brought in.
A marketing employee joins the business.
Somebody leaves or circumstances change.
A new supplier arrives, you switch agencies, or use multiple agencies for specific channels.
Another platform gets introduced.

Eventually, many SMBs and SMEs find themselves with a collection of marketing activities, suppliers and systems, but no clear ownership or direction.

SMEs often reach a point where it is perceived to be more cost effective and efficient to have around 150 hours per month from a single FTE than pay an agency for a fraction of that time. This starts a huge debate on the pros and cons of in-house vs agencies, and/or freelance contractors.

This is completely normal. I would argue it is one of the most common situations I encounter.

The Reality Of In-House Marketing

Many articles will tell you that building an internal marketing team is the answer. Sometimes it is indeed the right answer, but for many it is not.

Many SMEs underestimate what comes with employing marketing staff.

Performance reviews.
Career progression.
Technical mentoring.
Strategic direction.

A common challenge I see is business owners recruiting a Marketing Executive and then realising they don’t actually know how to manage a marketer, or that the individual simply isn’t up to the challenge or complexity of the different channels.

I’ve also seen the opposite occur on more than one occasion, with SMEs employing expensive Marketing Directors or Heads of Marketing when growth targets could be comfortably met within existing channels. Or alternatively, a Marketing Consultant, Fractional Marketing Director or Fractional Marketing Manager could have delivered the same outcomes for a fraction of the cost.

In fairness, many SMEs have to traverse this difficult phase where there is a genuine need for higher levels of support and they have to make a call. Sometimes they succeed. Sometimes they don’t. There is no right or wrong in these situations, as we all must make decisions as best as we can.

Agencies, Freelancers & Specialists

This is one reason agencies and freelancers remain so popular. For many SMEs, agencies or freelance marketers offer flexibility, specialist knowledge and access to skills that would otherwise be difficult to recruit internally or would carry significant wage requirements.

The downside is that multiple suppliers can sometimes create multiple competing or sometimes biased opinions.

The SEO agency wants one thing.
The PPC agency wants another.
The website developer has a different view.
And the business owner is left trying to work out who is right.

So What Is The Right Structure?

In truth, there isn’t one.

Some SMBs and SMEs operate extremely successfully with a trusted agency. Some SMEs build strong internal teams. Many use a combination of employees, freelancers, agencies and specialist suppliers.

Increasingly, I see businesses adopting hybrid models where internal resources are supported by external expertise and strategic guidance. With the latest terminology centred on fractional support, such as a Fractional Chief Marketing Officer, Fractional Marketing Director or Fractional Marketing Manager — in short, part-time contractors.

The structure itself is often less important than ensuring somebody is providing direction.

Because the biggest issue I encounter is rarely a lack of marketing activity. It’s a lack of coordination and someone who isn’t restricted by their contracted services, able to focus on growth with freedom.

Final Thoughts

Most SMBs can cope with agencies and fractional support. Most SMEs do not need a large marketing department. Nor do they necessarily need multiple agencies, freelancers and suppliers.

What they do need is clarity.

Clarity on objectives.
Clarity on priorities.
Clarity on accountability.

The best marketing functions I see are not always the largest or most sophisticated. They are simply the ones where everyone understands what they are trying to achieve and who is responsible for making it happen.

That may be an employee. It may be an agency. It may be a freelancer. It may be a consultant or Fractional Marketing Director.

The important thing is not the structure itself. It’s ensuring the structure supports the business rather than the business spending its time trying to support the structure.

“Get someone in place to let you get on with making money, rather than you getting bogged down.”

— A leading Management Accountant