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Nearly Two-Thirds of B2B Companies Outsource Marketing — Here’s Why

Mike Sweeney | May 28, 2020

Do some searching on outsourced marketing and you’ll find the following: definitions and benefits of outsourced marketing, marketing firms that offer outsourced services, and reasons NOT to outsource marketing. What’s missing is discussion of the broader business and marketing trends driving the recent resurgence of outsourced marketing. But it’s not just some broad business and marketing trends fueling this transformation. The marked increase of available outsourced marketing resources plays a part, too. While the number of advertising and related services agencies has remained fairly flat since 2007, that represents just one form of outsourced marketing. Tens of thousands of marketers in a variety of categories maintain profiles on freelance platforms like Fiverr and Upwork, and the latest Freelancing in America survey reports that 35 percent (57 million people) of the U.S. workforce freelances.

While the availability of these marketing resources points to change, supply has grown because the demand grew. More and more businesses continue to look to outsource some or all of their marketing. In fact, HubSpot reports that nearly two-thirds of B2B companies outsource a portion of their marketing.

What’s driving the increased interest in outsourced marketing as an option for all types of businesses, from start-ups to scale-ups to mature companies?

 

Top Factors Contributing to the Increase in Outsourced Marketing

Specialization Supports Marketing Success

Still asking your marketing manager to run your AdWords lead generation program? Perhaps your marketing director is still writing copy for all your vertical-focused brochures? Or have you put your marketing coordinator in charge of social media because “she is young and gets this stuff”?

Too often, business leaders try to force their marketers into functions outside their core roles, rather than hire (or outsource to) true specialists. I get it — there are dozens of specialties, from cause marketing to mobile marketing to public relations. And inside those specialties are dozens of sub-specialties. Depending on the nature of your company, these specialties may be in high demand and may command top dollar so trying to get the job done with someone already on your staff can be tempting.

CMOs’ Changing Budgets

Gartner’s most recent annual CMO Spend Survey revealed that marketing leaders’ priorities are shifting — and therefore, so are their budgets. Now, they’re spending about a quarter of their budget on marketing technology (down slightly from last year) and a quarter on paid media (up 10 percent from last year). The remainder of marketing leaders’ budgets are split fairly evenly between internal labor and outsourced agencies.

The continued focus on digital marketing and technology increases the need for strategy but also for experts in narrow fields like marketing technology, paid media, SEO, email. In general, this means there’s higher demand for folks who have the ability to find new channels, models, and technologies to remain competitive. Can you afford to staff all of that marketing specialization internally, especially post pandemic? These specialists tend to come at a higher price than generalists, so unless you have Amazon, Google, or Apple recruiting budgets, that’s a tough trail to blaze — and a slow one at that.

And consider this: You might not need the senior-level specialist or strategist full time. As a marketing leader, you need to be able to prove ROI quickly and effectively, so outsourcing for senior-level expertise can make sense project by project. It’s also frequently a cost savings over an FTE .

Marketing Spend is Changing

Outsourcing for Flexibility

The flexibility of hiring contractors rather than full-time employees has always had its lure. It’s easy for employers to shift gears if organizational priorities change. And making a switch if your contractor or agency isn’t working out is not nearly as costly or time consuming as it is with an FTE. As companies struggle to get back to business post pandemic, employers will likely look at outsourcing work that would have gone back to furloughed employees as a way to remain flexible but still take advantage of expertise in specific areas.

Companies today need to move quickly to create customer experiences that impact key business drivers like brand awareness and revenue. As employers look for strategic leadership as well as specialists, the current business landscape may not offer the opportunity to find and retain those resources in-house — especially at the expense of making progress toward marketing goals.

The Expanded Responsibility of Marketing

What do vloggers, social media managers, chief listening officers, data scientists, and content marketing specialists have in common?

Ten years ago, there were very few of them walking the earth.

But that’s not necessarily the primary place where marketing expansion is coming from. Responsibilities that either didn’t exist previously or responsibilities once managed under a different department are now shifting to marketing.

Areas like sales enablement, sales operations, and even inside sales used to reside largely within traditional sales structures, but no longer. And the marketing technology function? Didn’t even exist a decade or so ago, and now it occupies the fastest-growing budget in the marketing mix.

One of the solutions for the increased need for new roles/skills and the expanded responsibility of the marketing department? Outsource so you can tap into the expertise of skilled specialists who can jump in without a learning curve.

 

Choose Your Marketing Model: Outsourcing, Insourcing, or Hybrid

All of this brings you back to a primary marketing decision: Should you keep all of your marketing in-house, outsource all of it, or use a combination of the two (a hybrid model)? That decision depends on your unique situation, budget, goals, culture, existing FTE talent, and a host of other factors.

If you have the budget available, strong support from top leadership, and the capacity to consistently prioritize marketing activities, you may be better suited for insourcing. Building a modern marketing team of experts can run your department hundreds of thousands of dollars in salary and benefits (see the chart below for U.S. average compensation). If you lack the budget for a fully staffed team of specialists or aren’t seeing results from your current marketing activities, it’s probably beneficial to look into outsourcing or a hybrid approach.

No matter what decision you land on, it starts with evaluating where your company is now and where you’d like to be. For a closer look at your options and for help determining which is right for you, download our eBook, “Insource, Outsource, or Hybrid: How to Build the Most Effective Marketing Team.”

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About Mike Sweeney:

As Right Source’s co-founder and CEO, Mike Sweeney creates, plans, and implements our vision, mission, culture, and strategic direction as well as serving as an advisor to our clients. Mike received a bachelor’s degree in business administration with a major in marketing from the University of Notre Dame and has more than 20 years of experience in B2B marketing strategy, including digital, content, and marketing technology. You can find Mike on Twitter and LinkedIn, or read his other posts.