The document discusses how outsourcing marketing functions has become an essential business strategy for companies to reduce expenses in a changing economy. It provides evidence that over 70% of companies outsource for lower costs and access to specialized talent. Outsourcing marketing allows companies to focus on core operations while gaining the expertise of marketing firms. As more marketing activities are outsourced, companies still need in-house marketing executives to oversee outsourced work. The best outsourcing arrangements are collaborative partnerships that create shared value for both companies.

1. PROPELLING BRANDS FORWARD
or expand often will that find outsourcing is a cost
Outsourcing Your Marketing: effective decision to fulfill certain corporation
New Business Model Emerges functions. She adds that outsourcing has become an
as Companies Look to Reduce essential aspect of business strategy and this includes
the marketing function.
Expenses in Changing Economy
“Outsourcing allows a company to put more focus
Gail Guge, APR, CBS
on product development and overall operations. It
Wilkin Guge Marketing eliminates the need to hire or maintain full-time
staff and avoids tasking overworked staff,” says
The benefits of outsourcing have moved well beyond Lake. “Marketing firms help companies market their
cost savings according to recent surveys and research products and services without extending their in-house
presented at the 2008 Sales and Marketing Summit. marketing staff. They can often provide the same
This development has caused companies to re- service as an in-house marketing department, but at
evaluate their outsourcing tactics and consider half the cost.”
outsourcing more functions including marketing. “Outsourcing provides access to specialized skills
It has also necessitated a more collaborative approach and expertise,” says Jim Hughes, founder of The
between outsourcer and provider. Brand Establishment, an organization that certifies ad
In a recent survey by Pricewaterhouse Coopers agencies across the country. “This includes the value of
(PwC): “Outsourcing Comes of Age: The Rise of an external perspective and viewpoint, plus immediate
Collaborative Partnering,” results show 76% of reduction in overhead costs. Handled properly, it also
respondents sited lower costs as the top reason to creates a legion of brand ambassadors.”
outsource, but nearly the same amount – 70% - said
they outsourced to gain access to talent. Additional
motivators include farming out activities that others
can do better, 63%; increasing business model
flexibility, 56%; improving customer relationships,
42%; and developing new products or services/market
segment expansion, 37%.
PwC found that IT services are the most outsourced
at 57%. And 33% of companies are now outsourcing
their sales and marketing. And a prior PwC survey
found that growth companies that outsource grow
faster, larger and more profitably than non-outsourcers.
According to Laura Lake of About.com, it’s not
a secret that companies that downsize, re-prioritize
(cont. on reverse)
news & muse about the least understood yet most oversold subject — brands.

2. Top Reasons Why Companies Say They Outsource
1. 76% - To lower costs
2. 70% - To gain access to talent
3. 63% - To farm out activities that others can do better
4. 56% - To increase business model flexibility
5. 42% - To improve customer relationships
6. 37% - To develop new products or services/market segment expansion
Source: 2007 Pricewaterhouse Coopers Survey: “Outsourcing Comes of Age: The Rise of Collaborative Partnering”
If you think about it, most companies already She quickly cautions that companies still need a
outsource a portion of their marketing function— marketing executive in-house to drive and quarterback
advertising. But what about customer research, public the process and serve as the conduit between the
relations, interactive, direct-mail management, creative organization and the outsourced agency.
development, lead management, ROI-tracking and
“The skills required of the marketing manager are
customer analytics? Increasingly, expertise in other
rapidly changing. Today, managers are like ringmasters
marketing areas lies outside your own walls. And
in a circus; they must understand how to access the
that is why more and more companies are turning to
skills they need, since in practice they are relying on a
marketing partners.
variety of in-house and outside suppliers to get the job
“The outsourcing of marketing activities is catching done,” adds McGovern.
on; in fact, in a recent poll of marketing executives,
The best outsourcing arrangements are partnerships.
53 percent reported plans to outsource most of their
Suppliers should not be regarded as mere contractors,
marketing activities,” explains Harvard Business
since contractors do not always perceive a long-term
School professor Gail J. McGovern in the March 2005
stake in the project’s success. The value created should
issue of Harvard Business Review.
be seen as shared value.
McGovern offers a unique perspective: Before
So as you look for ways to grow your company in
joining the HBS faculty in 2002, she was president
hard times it might be time to think outside of the
of the Fidelity Personal Investments unit of Fidelity
box and consider the benefits of outsourcing your
Investments, serving four million customers with $500
marketing: a marketing department if you don’t have
billion in assets.
one; more horsepower if you do.
Wilkin Guge Marketing is the Inland Empire’s largest business and
brand development firm. We help companies thrive beyond their
expectations by providing uncommon strategic thinking brilliantly
communicated. Here, brands leap and business bounds.
If you would like to brand speak with Gail Guge, Andrew Wilkin or
Jim Hughes, please call 909-390-1239. To subscribe to Momentum,
please visit www.wilkinguge.com.