Outsource marketing

From CEOpedia | Management online

Outsource marketing is the practice of entrusting the company's marketing demands to a third party. Experts are hired to develop and execute business marketing strategy and campaigns (Emiliani, Gregory & Swartz, 2018).

Outsourcing indicates to a contractual relationship for delivering business services by an external provider. Simply put, a company pays another company to do work for it. Outsourcing consists of entrusting a supplier with activities outside the core competencies chosen by the organization (Sharpe, 1997).

The need of outsource marketing in business company

The idea of marketing products or services to the public is such a central function to a business that it requires a significant amount of attention. As a result, companies wishing to convey aspects of their product or service offerings can do so in creative but sometimes costly ways. As a more profitable alternative, outsourcing has become an extremely popular modern business activity. Once seen as an alternative reserved for large multinationals, outsourcing has become a viable business solution for any organization to improve its market position, reduce costs and improve its overall quality. While many corporate activities such as information and human resource management were done "in-house", advocacy for outsourcing most of these efforts keep going and more and more they are becoming a global business trend (Sartore, Taylor, & Walker, 2009).

Common services that marketing agencies provide to business companies (Emiliani, Gregory & Swartz, 2018):

  1. Branding,
  2. Content marketing,
  3. Creative development,
  4. Data analytics and optimization,
  5. Email marketing,
  6. Market research,
  7. Social media,
  8. Public relations,
  9. Search engine optimization,
  10. Web development.

Factors driving marketing outsourcing

The main factors that have led to an outsourcing trend are (Dinu, 2015):

  • lower labor and operational costs is one of the main reasons why firms decide on outsourcing,
  • the lack of specialized employees in certain parts of the commercial,
  • cheaper labor accessibility, without compromising quality,
  • ability and opportunity to focus on other profitable business,
  • share risking with another company,
  • thanks to delegating responsibilities to external agencies, companies can get rid of difficult functions to manage and control while realizing the benefits.

Outsource marketing benefits

The outsourcing activity is one of the most extensive and profitable in the world. The decision to outsource marketing activities is important for many businesses and it has many advantages (Dinu, 2015), (Emiliani, Gregory & Swartz, 2018):

  • companies have access to better and higher quality talent than they normally could attract or afford in an in-house service,
  • outsourcing eliminates the need for an in-house team, thus reducing overhead - customers can operate with a bare minimum marketing team or even none at all,
  • it reduces the need for multiple agencies, all marketing requirements are fulfilled by one, centralized agency,
  • the company can specialize in its main object of activity, what ensures higher profits,
  • flexibility in responding to service needs,
  • transfering corporate resources to core activities,
  • lower costs,
  • better and faster services,
  • access to qualified resources.

Crucial components to successful outsourcing

Three behavioral factors that influence the quality of the relationship between the service provider and receiver are identified (Lee & Kim, 2005):

  • shared knowledge,
  • mutual dependency,
  • organizational linkage.

Current findings further reinforce these claims by identifying psychological factors as crucial in fostering the commitment and trust. These "process" variables all have the characteristics necessary for the satisfaction of users and the company in general.

Examples of Outsource marketing

  • Digital Marketing: This involves activities such as Search Engine Optimization (SEO), Social Media Advertising, Website Design and Content Marketing. Companies may hire an experienced agency to manage their online presence and engage with customers through various digital channels.
  • Email Marketing: Companies can outsource the process of creating and sending emails to their customers. This includes designing creative emails, customizing messages for different customer segments, and using data analytics to target and measure the success of campaigns.
  • Public Relations: Companies may outsource their public relations (PR) services to a specialized agency that can help them to build and maintain relationships with key influencers and media outlets. This includes creating press releases, managing media relations, and organizing events.
  • Market Research: Companies can outsource the process of gathering and analyzing market data, such as customer surveys, focus groups, and competitor analysis. This data can be used to inform decisions on product development and marketing campaigns.
  • Advertising: Companies can hire an agency or a freelancer to develop creative advertisements and execute campaigns across various channels, such as print, radio, television, and digital.

Limitations of Outsource marketing

Outsourcing marketing can be an effective way to enhance your company’s marketing efforts, but there are a few potential limitations to consider. Here are five limitations of outsource marketing:

  • Lack of Control: Outsourcing your marketing strategy can sometimes result in a lack of control over the process. You may not be able to monitor the progress of the project as closely as you would if you handled it internally.
  • Communication Barrier: There may be a gap in communication between the company and the marketing agency, resulting in a less effective campaign.
  • Cost: Outsourcing marketing can be expensive, particularly if the marketing agency charges a large fee for its services.
  • Lack of Ownership: When you outsource your marketing, you may not experience the same level of ownership as you would if your team handled the project internally.
  • Confidentiality: When you outsource your marketing, you may need to share confidential information with the third party. This could put your company’s sensitive data at risk.

Other approaches related to Outsource marketing

The following are other approaches related to Outsource marketing:

  • Affiliate Marketing: Affiliate marketing is a type of performance-based marketing in which a business rewards affiliates for each visitor or customer brought by the affiliate's own marketing efforts.
  • Social Media Marketing: Social media marketing is the process of creating content to engage with customers on social media platforms, such as Facebook, Twitter, and Instagram.
  • Content Marketing: Content marketing involves creating, publishing, and distributing content in order to attract and retain customers.
  • Search Engine Optimization (SEO): SEO involves optimizing a website for search engine algorithms in order to increase its visibility in organic search results.
  • Pay-Per-Click (PPC) Advertising: PPC advertising involves placing ads on search engine results pages and paying for each click-through to the website.

In summary, Outsource marketing involves working with experts to develop and execute marketing strategies and campaigns, as well as other approaches such as affiliate marketing, social media marketing, content marketing, SEO, and PPC advertising.

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Author: Paulina Olszewska