What is outsourced marketing? It is an innovative model for providing marketing services, with the help of which experts evaluate, plan and implement an individual sales and marketing strategy to stimulate business growth.
There are various scenarios for transferring fully or partially marketing functions to the outsourced 3rd party. However, the owners of companies face challenges every time how to best promote their products and services, how to convey value to the consumer, how to attract new customers and at the same time optimize costs.
Gartner’s survey of CMO spending estimates for 2021-2022 shows the dramatic and lasting impact of the global pandemic on marketing budgets. Despite a budget cut of more than 15% in 2020, many CFOs expected that budgets would recover in 2021. However, the research data shows that the budget optimism of 2020 was misplaced: marketing budgets fell to 6.4% of the company’s total revenue in 2021, compared with 11% in 2020.
“This is the first time that marketing budgets as a percentage of the company’s total revenue have recently fallen below 10%, and this is the lowest figure in the history of the Gartner CMO spending study, ” said Ewan McIntyre, co-chief of research and vice president analyst in the Gartner for Marketers practice. “However, these cuts have been a slow burn over the course of the last year, where many marketing budgets have not recovered what was originally lost” (https://www.gartner.com/)
Thus, one of the main post-pandemic business issues for owners of small companies and startups is the proactive promotion of their products using new technologies in conditions of a limited budget.
In the previous article, we briefly reviewed the main advantages of marketing outsourcing for startups and small companies. Оutsourcing of non-core business processes will minimize critical errors, reduce order lead time, scale down lack of experience, reduce unmanageable workload, lessen the main costs of starting a business for equipment and technologies, administrative, sales, and marketing costs.
According to research from The Manifest, at least 50% of small businesses outsource digital marketing and HubSpot estimates that two-thirds of B2B organizations outsource marketing services.
Large corporations are outsourcing even more. From 38 to 48% are outsourced to the following areas of marketing: data sourcing, call center, creative development, analytics, programmatic media, search media, marketing strategy, web development, SEO, data management, user journey development, marketing technology, campaign operation, email, decisioning. The turbulent 2020 showed the advantages of online and gave a sharp growth to new marketing technologies. The latest Gartner’s study shows changes in CMO strategies: increased spending on digital marketing, paid media, and personal brand building. Also, at the top of marketing priorities: converting leads into customers, traffic growth, rising profits by expanding services for current customers, increasing ROI, improving the link between marketing and sales, and reducing the cost of attracting leads. One of the key needs of companies today is to create a customer experience that affects brand awareness and revenue.
The relevance of digital marketing and innovative technologies causes a rethinking of marketing strategies and the requirement for experts in narrow areas, such as marketing technologies, paid media, SEO, email. And this means that there is a demand for people in the market who can find new channels, models, and technologies to be competitive. Can a small company or startup afford such a large number of experts within the company, especially after the pandemic? Such specialists are usually more expensive than general specialists, so if owners do not have a budget for recruiting such expert personnel, they need to think about outsourcing.
In addition, new functions from other business areas have been transferred to marketing. Responsibilities that either did not exist before or responsibilities that were once managed by another department are now transferred to marketing.
For example, some areas of expertise that the sales department previously had, such as sales promotion, sales operations, and even internal sales. And, the function of marketing technologies, which did not even exist a few years ago, and now it is the fastest-growing sector in the marketing structure.
One of the solutions for the increased need for new expert roles or skills and the expanded responsibility of the marketing department is outsourcing. This is an opportunity to take advantage of the experience of qualified specialists who can effectively perform their tasks without a learning curve.
The flexibility that outsourcing gives in hiring freelance employees is always attractive for businesses. This makes it easy to switch tasks and processes if the company’s priorities and strategy change. And this flexibility of switching allows owners to save costs and a lot of time, compared to hiring a full-time employee. As companies struggle to get back to the previous level of business status after the pandemic, owners are likely to focus on partial outsourcing in specific expert areas, which may later return to laid-off employees.
Marketing is one of the most important areas for investment in the development and rapid scaling of a business. However, many companies cannot allocate enough time and resources necessary for the development and implementation of a marketing strategy. Outsourcing one or more marketing functions provides many advantages – from reducing costs and the ability to scale quickly to gaining access to the latest tools and expert industry experience.
