Harvard Business Review (HBR) predicted in 2005 that there would be a fundamental shift in marketing operations. It stated that up until 2005 the domain of marketing was principally a creative one – or what it referred to as ‘right brain’ marketing.
The experts predicted that the proliferation of technology would result in the need for more ‘left brain’ marketing expertise, as the marketing sphere became increasingly analytic. To cope with the changing dynamic, HBR predicted that companies would gradually turn to outsourcing.
At the turn of the 20th century the global market for outsourced marketing services was worth $45.6 billion. By 2012, that figure had increased to $99.1 billion – more than doubling in 12 years.
While the outsourcing market has increased year-on-year, the definition of outsourcing has changed dramatically since 2000. In the early noughties, ‘outsourcing’ was simply a pseudonym for ‘offshoring’ – a way for companies to reduce costs, often at the peril of quality of service (QoS).
Thanks in no small part to the economic downturn, there has been a paradigm shift in how organisations structure and manage themselves. Small, medium, enterprise and corporate sized businesses, in both the B2C and B2B sectors, have had to learn how to do a lot more with a lot less.
Consumers and customers are demanding the very highest level of services, while CEOs, CMOs and other stakeholders are demanding tighter controls on spending. This has resulted in a reinvention of the word ‘outsourcing’, which has now become one of the most effective ways for organisations to achieve quality results within the confines of their budgets.
Outsourced services give companies access to world-leading talent, cutting edge technology and industry knowledge for a fraction of the costs that they would incur if they brought operations in-house. Nowhere is this new way of doing business more evident than in the marketing industry.
Below are three of the top reasons why companies may wish to consider outsourcing either part or all of their marketing needs.
Reason #1: You don’t have the expertise in-house
This reason could quite easily be called ‘cutting cost’. Although outsourcing ideology has changed over the years, the ‘bottom line’ is still at the heart of outsourcing and the fact remains that it is still a cost efficient way of doing business.
The first and most obvious reason you might look to outsource various aspects of your marketing operations is that you lack the specific expertise you need to achieve desired results. To carry out effective campaigns, you might need strategists, creative specialists, technologists, brand journalists, webmasters, SEO professionals, social media experts, event organisers; the list is endless.
Related reading: Find out what really goes on behind the scenes of a search agency
For many CFOs, the seemingly exponential resources that marketing demands can often be seen as a discretionary expense. In order to get industry leading talent on board, the only effective way of doing this is through outsourcing.
Reason #2: Lacking the technology
Historically, marketers have been technologically-deprived. Often chief technology officers and their marketing counterparts do not see eye-to-eye when it comes to how an IT department’s resources should be delegated and marketers are notoriously found somewhere towards the bottom of the priority list. This is problematic given that marketing is increasingly driven by technology.
Related reading: The digital marketer’s big data dilemma
The cloud-based applications market has provided some relief to this issue, negating the need for IT support and opening up access to tightly integrated, feature rich marketing technology. However, while this new software as a service (SaaS) model might provide marketers with cutting edge technology, extracting actionable intelligence from it still requires expertise. As Steve Jobs said, “It’s not the tools that you have faith in – tools are just tools.”
Rather than procuring state-of-the-art technology from the cloud, it often makes more sense to outsource the entire process, putting your faith in the hands of a strong marketing agency that knows how to put those tools to good use.
Reason #3: Mitigating risk
Legislation surrounding data and privacy is an ever-changing landscape. Aimed at tackling the challenges of globalisation, new technologies and ultimately strengthening a right to privacy, the European Union is in the process of implementing sweeping changes in privacy legislation. Many of these changes have an effect on marketing practice.
The US Patriot Act, the right to be forgotten, the Data Protection Act, advertising codes and regulations – the list of legal risks is arduous. Outsourcing your marketing functions to an agency with up-to-date market knowledge means you are also mitigating inherent risks.
The argument for outsourcing is strong
The marketing ecosystem is undergoing significant change. According to the Guardian, the total UK advertising market will hit £15.8bn in 2015. The proliferation of digital technologies and in particular mobile, means that the required skill set for marketers is rapidly evolving and this fast-paced environment is leaving many struggling to keep up. Research from Pitney Bowes suggests that the average British SME is only achieving 39 per cent of its planned marketing activity. With 87 per cent of SMEs stating that marketing has a positive impact on revenue, this under-performance equates to roughly £122 billion in lost revenue each year.
While there are benefits to building and maintaining a brand in-house, the reality is that many organisations simply do not have the time or the resources to do so effectively.
Outsourcing gets results
Find out how by outsourcing their search marketing, one of our customers saw a 99% increase in yearly impressions and a 250% increase in organic goal conversions!