Marketing, advertising and other creative services have been outsourced for years, but it was only recently that companies began working with third parties to carry out strategic, analytical and high-value operations as well. According to a 2004 survey of marketing executives by Forrester Research, 53 percent of respondents wanted to outsource more than half of their marketing activities. A majority of businesses already outsource advertising activities.
Lead management outsourcing is projected to grow 10 percent every year. In 2011, despite a sluggish and recovering economy, marketing outsourcing revenue grew by 7 percent. It is clear that more companies are turning to outside experts for services like direct email management and customer analytics.
Market surveys indicate that the two primary reasons that companies outsource marketing and advertising processes are cost reduction and quality improvement. Marketing service providers can also provide the sought-after management and analytics expertise that many companies lack (Outsourcing Marketing, Harvard Business Review 2005).
Lower cost per project, higher return on investment, faster delivery, and availability of specialized talent are also attracting marketing executives to outsource services, according to industry studies. The need for marketing domain expertise and innovation is projected to grow further as digital media and the Internet continue to make traditional engagement channels less effective.
Many marketing service providers are rising to the occasion by offering sophisticated marketing analytics using computer models. These algorithms can determine detailed customer preferences, competitive landscape and other data to assist in developing advanced marketing strategies.
Many marketing firms continue to provide transactional marketing services, such as customer call centers, sales force deployment and staffing, but those that offer dynamic, innovative and end-to-end marketing solutions are likely to grow their market share significantly in the near term. To gain the most value from marketing outsourcing engagements, executives must become proactive brand ambassadors and drive a customer-focused culture within their own organizations and within their suppliers as well. Service providers should be seen as partners that create long-term value, instead of mere contractors that need to be controlled.
Marketing and Advertising Outsourcing: Challenges and Solutions
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Advertising and Marketing Outsourcing to the Philippines
Companies that outsource marketing and advertising functions often do so for strategic reasons. Some outsource all non-core functions, while others outsource higher-value activities because they lack the marketing resources to cope with rapid or sudden business changes.
Both SMBs and larger companies may realize that they lack the expertise to execute certain marketing functions successfully. When effective marketing that requires number crunching and high-level analytics is outside an organization’s purview, a specialist provider can fill the resource and human capital gap. Marketing analytics and database marketing are commonly outsourced, for example. An outsourcing provider with marketing domain expertise will be able to provide strategists, analysts, auditors, product specialists, brand managers, e-commerce professionals, content developers and other expert marketing staff. It can be expensive to source this group of high-caliber professionals internally and in a location where talent is unavailable.
Marketing efforts are becoming increasingly technology driven. Organizations often lack the necessary marketing tools, and even companies in high-tech industries may not prioritize marketing initiatives. Developing marketing tools and analytics applications can tax internal resources. Working with a specialist provider with an arsenal of marketing applications and leading-edge technology is a superior alternative. Vendors have experienced marketing staff who know how to use the right tools effectively.
Fixed labor, infrastructure and overhead costs typically account for the largest portion of an organization’s marketing budget. On top of these are the hidden costs of scaling the workforce, maintaining in-house marketing assets, and of delays caused by attrition and lack of support. Outsourced functions and projects mean better overall flexibility. A three-year database outsourcing contract, for example, is easily scalable depending on the business requirements.
Custom marketing solutions provide tangible business outcomes for clients, helping them grow profitably while reducing costs. Advertising and marketing outsourcing to established locations such as the Philippines can deliver results amid many challenges faced by organizations. Unlike traditional marketing agencies, a reliable service provider such as Sourcefit aims to be a trusted partner that delivers long-term value.