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Marketing Outsourcing For Cost Savings
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  • Jim O'Donnell

Stretching your Marketing Budget through Outsourcing

Rent or buy, lease or own, in-house or outsource? These are important questions which every senior executive must answer on a frequent basis. The decision to assume full-time ownership of an asset, as opposed to contracting on-demand, can often be a function of cost. Just as a manufacturer of a product might outsource a short run production of a specific part to a supplier instead of investing in machinery to produce that part themselves, an executive team must strategically consider the long-term cost-benefit of hiring full-time workers versus bringing in a team of seasoned external advisors.   When a marketing campaign or an online strategic initiative is being considered, there is almost always a case to be made for outsourcing, not only from a cost perspective, but from a strategic perspective as well.

Reduce the Cost of Benefits with Outsourced Marketing

Outsource Marketing To Reduce CostsRegardless of the size of a company’s operation, employment benefits for a full-time employee can often fall between the range of 1.25 and 1.4 times an employee’s base salary (source). In the case of an employee earning $50,000 per year, this translates into an approx additional cost to the company of between $62,500 and $72,000. Not included in this calculation are the ancillary costs of onboarding an employee such as recruiting expenses, employment taxes and overhead (computer, electricity, office space, for example). These costs are precisely the reason why so many companies rely on contracted labor to help operate their business. Just as no one would second-guess the decision to outsource a tax accountant around tax time, or engage a third party customer service center to mitigate costs, considering an outside marketing agency is a matter of dollars and sense.

Ebbs and Flows of Marketing Demand

Fluctuating demand is another reason a company might consider an external marketing team as a means of stabilizing costs over the long run.   Throughout the course of a calendar year, a company will encounter a series of challenges and opportunities, many of which require varying levels of marketing attention.

The scheduled launch of a new product in summer may require a comprehensive marketing strategy that runs in parallel to the product launch and that bolsters the efficacy of the salesforce.   This could come in the form of the development of promotional materials, advertising campaigns, or even development of the packaging that will ultimately house the product. When the new product achieves traction in the market, it makes good business sense for the marketing activities to be refocused on analyzing the metrics of various campaigns and assessing the rate of payback associated with the launch.   If a business relies solely on an internal team, even during times of the year when there is less need to devote resources to marketing, the company is beholden to the “sunk costs” of employing a full-time marketing team.

By developing a relationship with an outsourced marketing agency, an executive team has the flexibility of managing financial and human resources in real-time.   The marketing needs of a business can change dramatically from one year to the next or even from project to project. Having an external team that caters to the ebbs and flows of marketplace demand can, therefore, translate into dividends on the balance sheet and contribute to the overall health of the business.

Leverage In-House Marketing Resources

Outsource Marketing Or InhouseFor companies with an in-house marketing team, even among larger enterprises, the depth and breadth of expertise may be limited to a narrow set of core competencies.   An in-house marketing team may be savvy in product marketing, digital marketing or print marketing, but it is rare to find a team that is proficient in all three.

An external marketing and SEO agency, by contrast, typically maintains a stable of marketing professionals all with unique skillsets and diverse areas of expertise.  To borrow a baseball analogy, if it is the bottom of the ninth and the team requires a left-handed closer adept at throwing fastballs, the team that is forced to rely on the right-hander they have on staff who throws only change-ups is the team who stands the prospect of losing. With an outsourced marketing agency, your management team can have easy access to all of the “pitching” specialists required to win in the marketplace.

Cost Savings Of Outsourcing Company Marketing

As with all aspects of business, the ability to have easy access to strategic options may very well mean the difference between profit and loss. If a situation calls for an internet marketing strategy heavy on search engine optimization (SEO), or creating on online campaign for a new target audience, it often makes more sense to contract with outside professionals with a proven track record of results than to train existing staff members on areas that may be completely foreign to them.

Overall, when considering whether to insource or outsource a marketing team, the cost-benefits analysis will be a fundamental determining factor. The costs associated with hiring a fully-functioning team of marketing talent can cause internal costs to balloon for a number of reasons, not least of which are the costs to employ, the fluctuation of demand, and the need for diversified expertise.  An outsourced marketing agency can help control these costs, especially when launching an online marketing campaign that encompasses the complex components of SEO, content management, social media and analyzing campaign metrics.

Author: Jim O'Donnell
Jim ODonnell has had a business management consulting practice for over 25 years along with a varied online marketing experience for over 15 years. His business models are characterized by Savvy Business Strategies first before integrating the online marketing initiatives that support the client company's mission and business objectives.

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