Increasingly, clients are looking at ways to outsource big parts of the marketing, PR and/or marcom function. It’s a trend that current economic and technological underpinnings support and one that’s likely to to accelerate, so figuring out what works and what doesn’t should be on every manager’s to-do list.

Some things to consider:

• Take a look at what works in your industry and consider it — but don’t be beholden to it. Generally, low-margin businesses insource more than high-margin ones; you’ll see more insourcing at a low-margin retailer than at an industrial manufacturer (where there’s often a hybrid insource/agency approach), and more outsourcing still in luxury goods. Any industry’s conventional wisdom is a form of crowdsourcing, and a chance to learn from the group wisdom of others. The danger in going with that conventional wisdom comes when you’re doing something fundamentally disruptive in your industry — lots of good industry innovations have failed in the market because the innovation changed the market… and no one changed the marketing model.
• Understand your campaign cycle and what it means for your marketing. Every product or service has a life cycle driven by external, client-focused factors (buying seasons, trends, budgets) and internal factors (R&D, amortization of equipment, sales process, etc.). Many of those will clearly point to the advantages of in-house or on-call staffing.
  Factor in your distribution by channel and geography. Generally, the larger your geographic distribution of marketing messages and the greater the number of channels being hit, the more you need to outsource. Why? Because the odds are you don’t need Joe Who Knows The Best Prime-Time Media Buy In Helsinki all that often. Now and again, but not all that often.
• Everyone thinks in terms of consultant fees; be the person who thinks about the real costs of insourcing. If you’re an SMB, budget ratios matter as much as budget numbers. A $10 million company allocating 5% to marketing doesn’t have endless dollars to throw around, and hire-vs-outsource decisions can come down to not just results, but raw dollars of spend.

  Consider: Hiring and firing employees is expensive, while negotiating outsourced services is much more controllable. Buying outsourced services (particularly if you structure it as purely a la carte or retainer-plus-as-needed services), gives you more budgeting freedom; in contrast, once you hire someone in-house you need to keep them active, even if it’s with things that are below or above that skill set.

So what does this all come down to? Every situation varies, and the variables I’ve outlined play a huge role in how efficiently you can outsource big portions of the marketing/marcom/PR function. But overall, you can generally start by looking at:

OUTSOURCE:
1. Strategy
2. Branding
3. TV
4. Media buying
5. Direct mail
6. Talent services
7. Campaign development

INSOURCE:
1. Routine design of collateral, Powerpoints and other sales/field marketing materials
2. Day to day web design (you don’t want to wait)
3. Catalog production
4. High-volume copy writing

Notice anything missing? That’s right: Media relations. Across a range of industries, this is a wild card that can go in-house or outsourced depending largely on the nature of the news released, the product/news cycle and other factors. Both solutions have merit, depending on how big a role PR plays in your mix.

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