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):
- Content marketing,
- Creative development,
- Data analytics and optimization,
- Email marketing,
- Market research,
- Social media,
- Public relations,
- Search engine optimization,
- 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.
- Dinu, A. M. (2015). The risks and benefits of outsourcing. Knowledge Horizons- Economics, 7(2), 103.
- Emiliani R., Gregory A., Swartz G. (2018). The Complete Handbook to Outsourcing Marketing. Catalyst marketing research.
- Lee, J.-N., Kim, Y.-G. (2005). Understanding outsourcing partnership: a comparison of three theoretical perspectives. IEEE Transactions on Engineering Management, Vol. 52, 43-58.
- Sartore, M., Taylor R., Walker M. (2009). Outsourced marketing: It's the communication that matters. Management Decision, Vol. 47 No. 6.
- Sharpe, M. (1997). Outsourcing, organizational competitiveness, and work. Journal of labor Research, 18(4), 535.
Author: Paulina Olszewska