From the Trenches

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

Mike Sweeney | January 17, 2019

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 in 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 platforms like Fiverr and Upwork, and the latest Freelancing in America survey reports that one in three members of the U.S. workforce freelances.

While the availability of these resources points to change, it’s also clear that the supply is growing because the demand is growing. More and more businesses are looking to outsource some or all of their marketing. HubSpot reports that over two-thirds of B2B companies outsource at least some of their marketing, an increase from just a year ago.

What’s driving the increased interest in outsourced marketing as an option for all types of businesses, from startups to scale-ups to mature companies? Here are a few of the top contributing factors.

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 nearly one-third of their budget on marketing technology, and more than one-fifth on paid media. About a quarter of the budget is allocated toward core digital marketing activities, including paid and organic search, website, and email.

That growing focus on digital marketing and technology increases the need for marketing technologists, paid media specialists, SEO specialists, email specialists, and, in general, folks who have the ability to find new channels, models, and technologies to remain competitive. Can you staff all of that internally? 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. As a marketing leader, you need to be able to prove ROI quickly, so using a large portion of your time and budget to hire these specialists can easily work against you.

Marketing Talent Shortage

Wait … at the beginning of this post, I talked about the increasing abundance of outsourced marketing resources. How does that spell talent shortage?

In simple terms, marketing, marketing budgets, and the responsibilities of the marketing function are growing faster than the talent pool. LinkedIn’s May 2018 Workforce Report found a shortage of more than 230,000 people with marketing skills in the 20 largest metro areas it covered.

That creates multiple problems for businesses. First, hiring the right team becomes a long and expensive process. It either takes months to find the people with the right experience, or it takes months to train people who don’t have the right experience — and then work to retain them.

Either way, you have to play the long game. And that brings us to the next problem: We live in a time when companies need to move quickly to create customer experiences that impact key business drivers like brand awareness and revenue. If you don’t keep pace with innovation and changing technology, you’re going to miss key opportunities to speak to your audience.

It comes down to this: Is your company willing to spend the time and money it takes to find and retain those resources — all at the expense of making progress toward your 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.

The Need for Specialization

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. And 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 the company or firm, these specialties may be in high demand and may command top dollar.

Specialists will always have a place on my team. Like a kicker in football, a shot blocker in basketball, or a closer in baseball, sometimes you need someone who can do a specific thing and do it over and over again more times successfully than not.

Outsourcing, Insourcing, or Hybrid

All of this brings us 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 (the 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 you are 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.”

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.

Related Posts: