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QUESTION: As a marketer, what portion of your business are you happy to outsource and what would you only ever do in-house?

1

Adrian O’Donoughue

Marketing manager, Harley-Davidson Australia

Call me a control freak, but my ultimate would be not outsourcing much at all. The internal marketing team knows the brand inside and out – they alone are responsible for success.

If an outside partner doesn’t deliver it reflects directly on the internal management. Being able to directly influence all variables would be the dream of many a marketer.

Obviously commercial realities largely dictate otherwise – at present, Harley-Davidson Australia outsources almost as much as we in-source, primarily due to headcount restrictions. It’s not a bad place to be and it works very well most of the time. Given free rein, things would be different though.

Economic factors aside, there are numerous clear benefits to working with creative external partners who bring good ideas and more to the party. Having people working for your brand with greater exposure to the big bad world, including non-related industry challenges, stimulates more open thought.

For this reason, not to mention the sheer indulgence, the luxury of an in-house ad agency is not something I would pursue even with a bottomless budget. Similar applies to areas like public relations where an external agency can develop potentially useful contacts across a broader range of media.

Administrative functions like call centres don’t really make sense to keep internally, as your own limited staff can add greater value to the business. A heavy events focus with significant schedule gaps also requires a flexible workforce that often can only be achieved through outsourcing.

Sure, it costs more to outsource, but the benefits generally outweigh the detriments. One thing I always want to keep complete ownership of is strategy development.

2

Derek Taylor

Managing director of direct marketing, PMP Limited

With many businesses doing it tough in the current market, marketing budgets are often the hardest hit. This leaves many marketing departments under resourced and over burdened, having to deliver the same work with tighter budgets. 

For marketing directors in this situation, outsourcing part of the function becomes a necessary option, and even more attractive when the outsourced provider brings specialist expertise to the process.

Whether outsourcing is specifically suited to your business or not will depend on a range of factors, but it’s not simply a matter of saying, ‘I’ll hand over 60 percent to make things easier for my staff’.

Before determining whether to outsource at all and what services to outsource, it’s best to establish what resources and capabilities are available in-house, and how these can best be supported and supplemented with specialist providers.

Benefits to outsourcing include:

  • being able to pay a fee for service, without salary requirements
  • access to specialist tools, input and advice, and
  • freeing up scarce internal resources.

Some businesses are reluctant to outsource marketing needs for fear of losing control, and this can be a legitimate concern.

The best outsourcing, however, is done as a partnership with a trusted provider, who works closely with the marketing team to ensure skills, expertise and, where necessary, know-how and intellectual property are applied to helping the marketing function perform to the highest possible level.

In PMP’s experience, outsourced marketing services typically include: print, design, customer profiling (targeted or mass), direct mail, distribution, online strategy and creative input.

3

Karen Ganschow

Executive director of relationship marketing, Telstra

This is a challenging question because the simple answer is ‘depends’. I am not sure there is a magic ‘portion’. In my view, it comes down to the nature of the activity and whether it is strategically critical to a business’ competitive advantage, versus is it a business capability that is actually better undertaken by external vendors or specialists?

As a big brand, we seek the services of a number of creative agencies to develop our promotional campaigns, but the consumer insights and targeting that underpins any major promotion we develop in-house. The core competitive advantage of knowing our customers is critical and is too important to outsource.

I always like the quote from Jack Welch from GE, who says, “We have only two sources of competitive advantage: the ability to learn more about customers faster than the competition, and the ability to turn that learning into action faster than the competition.”

Activities central to our competitive advantage would be challenging to outsource. We have developed a rich retail hands-on experience in T-Life, our Telstra branded stores and manage the retail experiential elements in-house. We also, however, work with important partners like JB Hi-Fi to support other key customer shopping segments.

The management of our online search has evolved in the reverse way. We started externally as we simply did not have the skills in-house at the time, but now we understand how powerful it can be and the need to constantly optimise and track to sale. Now, we run our search activity within the business as part of our end-to-end online marketing program. 

So the one-word answer is still ‘depends’ – it all depends on your organisation’s ability to differentiate to win.

4

Nicole Selah

Australian marketing manager, Gloria Jean's Coffees

At Gloria Jean’s Coffees we have dedicated in-house resources in the areas of brand, promotions and local store marketing. Our mission is to be proactive leaders in communicating, planning and servicing relationships with our coffeehouse guests, franchise partners, internal stakeholders and our external agencies.

Our responsibility is to develop the marketing strategy so it aligns with our overall business plan; however, the execution of this strategy has ownership beyond the in-house marketing team and extends to our external agencies.

Outsourcing to agencies allows us to capitalise on their expertise and resources, which brings a new perspective to our marketing programs. 

We recently appointed our advertising agency, 303, which is a key partner in bringing our strategies to life. The agency created our national brand campaign, including the development of television advertisements, utilising a team of experts in this field. In the specialist field of digital marketing, we engaged their digital team to bring a fresh approach to our internet advertisements and new website. 

When it comes to outsourcing it is really about assessing the need or level of support required and the cost benefit as to whether this can be satisfied by an internal resource or alternatively engaging a supplier who has a full team of experts available to service your needs.

We view all our agencies as long-term partners who are an extension of our marketing team. We work as an integrated team and build relationships with agencies.

This ensures we are all aligned in understanding the Gloria Jean’s Coffees brand, the marketing direction and together take ownership of the business objectives.
I believe it is this integrated approach that has contributed to the success of the brand.

5

Scott McClellan

CEO, AANA

This could be a good time for contractors and consultants to contact national advertisers.

Economic uncertainty will tempt many advertisers to outsource work rather than hire new staff. Others will take the opportunity to review existing supplier arrangements with a view to getting better ROI.

With redundancies on the rise and a freeze on hiring in many businesses, the option of outsourcing is considered a way of maintaining productivity while at the same time reducing overheads and financial risk.

But I would argue that cost saving should be a secondary consideration – more important is the fresh perspective an outsider can bring, along with the breadth of experience and insight gained from working on a variety of projects for different clients.

Few national advertisers have access in-house to all the technical and analytical expertise needed to bring complex modern marketing strategies to fruition, a challenge that will only increase with growing media fragmentation. As a result, marketing directors have become skilled managers of outsourced suppliers. The best arrangements are true ‘partnerships’ where the supplier has a stake in the final result. 

As marketers become increasingly reliant on outside help, however, they need to be careful to ensure that key decisions driving the marketing strategy behind company brands remains fully under their control, otherwise they may discover they have outsourced their own function.

5 Comments

attractivo-design
  • Wrote on 5 Nov, at 03:46PM
Agree with Nicole's comments here.

Agencies are like an extension of an internal marketing team. Outsourcing can be leveraged in areas where the company don't have (or have limited) resources or expertise.

Great response, Nicole!

Cheers,
Grace Chau

http://www.attractivo.com.au
walterf
  • Wrote on 6 Nov, at 10:26AM
Actually outsourcing is too broad a term to use to generally describe the activity.

There is traditional outsourcing where you subcontract an activity to a third party that takes upon them the charge to deliver an end result. These subcontractors would be generally working for a number of clients. Ideal where you have an intermittent need.

However the growth area is in the second form where you use remote staff (generally offshore) to augment your inhouse team on a long-term part time or full time basis.

This is a fast growing option where the benefit of this approach is that you are able to develop long-term staff that can understand your business and become an active and productive team member. The reason low cost offshore staff is used is that it allows you to add talent and skills to your business that previously you were not able to because of cost. This method is being used by many online businesses, as it is an excellent model to grow a business and adds scalability but is also being used by other businesses to increase flexibility and competitiveness.

Cheers, Walter Fulmizi
www.remotestaff.com.au/139sig
Danie Nel
  • Wrote on 10 Nov, at 05:24PM
Outsourcing has spread the net wide for better creative synergy - however, creative thumbprinting from an agency's point of view have diminished. Being a freelancer however, I would like to believe the unrestricted creative resource that is availalble in outsourcing is worth the cost.

Danie Nel
South Africa
waqasanwar
  • Wrote on 17 Nov, at 10:14PM
Hi
Can you please give me some important point on this topic?
"WHAT DO MARKETERS DO IN 2009"
Regards
Waqas Anwar
Charm
  • Wrote on 24 Nov, at 09:59PM
I think, if given the choice, almost every company would like to have everything inhouse if possible. Who wouldn't want complete experts in every field working for you that also knows your brand inside out. But because this is not possible without going bankrupt, companies now days try to group skills together.

Being a young marketer today, many companies now are demanding not only skills in marketing, pr and advertising, but also graphic design, web design, SEO, facebook (although this one's an easy one) and more. With universities barely teaching enough to secure a job when you graduate, we end up having to almost stand up to super man and wonder woman trying to fit the gaps for companies wanting to do things in house for lesser cost.

http://www.teacup.topstitched.com.au

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