Best Practices in Outsourcing the Advertising Best Essay

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Best Practices in Outsourcing the Advertising

Best Practices in Outsourcing Advertising:

Outsourcing is the most prevalent strategy companies are using today to control costs, increase their time-to-market, and gain access to expertise they may not be able to afford on their own. Outsourcing advertising and other areas of marketing reduced one large banks' budget by 40%, with smaller banks gaining a 30% cost improvement using outsourcing over hiring and retaining their own in-house staffs (Russell, 1997). Outsourcing advertising and creative production projects to India has increasingly become commonplace, with both Lifebuoy and Fair & Lovely brands outsourcing pan-Asian production and European production to Indian advertising firms (Businessline, 2005). IT outsourcing, the largest proportion fo total outsourcing completed globally has steadily increased from 19% of total IT budgets (AMR Research, 2003) to a projected level of at leas 30% by 2015 (Goodman, Ramer, 2007). Outsourcing will continue to flourish across all industries, as IT continues to lead its growth, advertising, marketing, public relations, lead generation and marketing program management will follow. The key factor for this transition is the fact that as company databases, systems, and IT architectures continually evolve to be more customer-centric, the continual outsourcing of every facet of marketing, including advertising will continue.

For the firm considering creating their own advertising department vs. outsourcing this function, there are several factors to keep in mind. It is the intent of this analysis to evaluate these factors, keeping them in the broader context of how the global economics of marketing are shifting more towards speed of response, accurate and clarity of marketing strategy execution (McGovern, Quelch, 2005).

Creating an Advertising Outsourcing Decision Framework

Instead of just chasing the lowest-cost provider of advertising and creative services or attempting to drop marketing costs significantly through aggressive bidding for outsourcing services, the better approach is to concentrate on first creating a framework for evaluating which aspects of advertising can be reliably outsourced. Obviously not every aspect of advertising can be outsourced; the results would lead to more lost time and profits than the effort would be worth, as studies have shown

(Patrick, 1994).

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What is needed then is a framework for evaluating which type of advertising projects can be outsourced successfully, for the lowest cost and the highest quality. This is the first and most significant best practice of outsourcing advertising and media strategy that has emerged from the analysis completed for this analysis. What the framework that prioritizes which advertising project to outsource and which to keep in-house must also do is keep marketing focused on its core strategies first (Morrall, 1995). While outsourcing gets much attention as a cost reduction strategy, it is actually more effective for stripping away extraneous tasks and projects that detract from the core focus of a business, including making its marketing more focused and effective (McGovern, Quelch, 2005). What emerges from the analysis done on this first best practice is the fact that advertising outsourcing done for cost reduction alone is in fact a worst practice that leads to inferior, often unusable results. The focus needs to be on offloading advertising that can be reliably and effectively done outside the company, so that the core focus on marketing execution can be attained with a minimum of distraction. Examples of companies who have used this strategy successfully are shown in the following table, Best Practices In Advertising and Marketing Outsourcing Framework, based on several of the sources used for this analysis.

Table 1:

Best Practices in Advertising and Marketing Outsourcing Framework

Marketing and Advertising Activity

Advertising Management

Advertising Program Development

Analytics of Advertising Effectiveness

Customer Experience Integration

Commonly Outsourcing Functions

Defining Advertising Strategy

Advertising Campaign Schedule planning

Program design

Advertising theme design

Campaign Management

Lead Management

Advertising Effectiveness

Analysis of Brand Health

Buyer and Prospect Behavior Analysis

Program Performance Analysis

Design and implementation of a uniform customer experience and integration of advertising specials to in-store displays and selling programs

Company Examples

Ericcson

(future technologies overview)

General Motors

(Volt Launch)

AllState

(lead mgmt.)

Sony

(Sony Styles' advertising, campaign management

Website)

American Express

(identification of high potential customers and those with high net worth)

BestBuy

(Magnolia Centers marketing, advertising.....

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