In an article in the Harvard Business Review a few years ago, Gail McGovern and John Quelch argued that outsourcing marketing can lead to better quality and lower costs. They were arguing this primarily in the context of analytics and direct marketing, since most companies did not have in-depth expertise within their organizations to scale and manage these functions effectively and efficiently.
Of course, companies have long outsourced advertising, market research and PR needs, but have often had a tendency to keep analytics and direct marketing in-house. In the past few years, since that article was written, direct marketing has only become more complex with the explosion in social media. Companies are struggling to manage multiple digital channels in an environment where the skills to manage these channels is very hard to hire for. The amount of consumer behavior data that is being generated by these media and the need to not only listen in but make sense of these conversations and distinguish the irrelevant from the important has become a daunting task indeed. One of our media clients saw traffic on their already heavily trafficed sites increase by 30% through the course of last year, driven largely by increased activity on mobile apps and devices. This, in turn, doubled the amount of data that was generated by this activity and had to be analyzed, so we could help them continue to customize the user experience across platforms
This exponentially increasing complexity has made the case for outsourcing marketing very compelling and urgent. In particular, the process of direct marketing has become more complex and requires sophisticated work flows and very skilled, specialized individuals who can work across multiple channels and incorporate sophisticated models and triggers. A company that is focused on getting their marketing operations right runs the risk of not devoting sufficient time, energy and management focus on getting the customer marketing strategy right. Outsourcing the execution of marketing campaigns, while retaining the ability to monitor and modify the campaigns through sophisticated dashboards and response attribution mechanisms, can ensure control but free up management to focus on areas such as improving the customer experience, optimizing customer value and maximimizing return on marketing investment. This is particularly true in Business-to-Business marketing where companies often struggle with budgets, scale and finding people with the right B2B marketing skills that also know how to work effectively with sales, managing lead flow effectively to the sales force and measuring impact
One of our healthcare clients thought about bringing their marketing database, which we had been hosting, in house. However, once they understood the complexity of the campaigns that were being managed, which included coordinating between their ad agencies, call centers and fullfillment houses, they decided to have our team continue to execute campaigns on their behalf. This arrangement has provided them with a great deal of flexibility while allowing them to focus on bringing new brands to market and ensuring that their partners are coordinating their efforts for maximum benefit to their overall marketing efforts .
Outsourcing can help reduce overhead, improve focus, broaden your skill base as well as your perspective and improve your speed to market. Do you have an example of how companies have successfully used this model? Or failed at it? We would love to hear from you.