Insourcing and Outsourcing: What You Should Know About Industry Trends and Patterns
To insource or to outsource? For many businesses, that is an ongoing question. In the past few years, the benefits of outsourcing have been highly touted and embraced by companies of all sizes and in all industries. But insourcing also has a certain appeal. So, how can you choose which option is best for your company or marketing team? There is no single answer that’s correct for every business, but the more you know about both options, the easier it will be to make an informed choice. Here’s what you should know about insourcing trends and what they mean for you.
My Unique Personal Experience with Insourcing and Outsourcing
We’ve seen it on the agency side, companies of all sizes have made the “God Offer” to agency employees and other digital marketing folks to join them in-house. Heck, it happened to me when I was recruited from a full-service agency in Milwaukee up to Best Buy corporate in Minneapolis to be on their Global Marketing Team and lead PPC efforts for three of their largest categories. I jumped at the opportunity. My very next career move was to a for-profit college system, where I was brought on to fire their expensive Chicago PPC agency and build the expertise in-house! Both were good career moves and both were good moves for the larger companies. Insourcing success.
I didn’t go from zero to Granular. I freelanced for a few years prior to officially launching. During that time, I was brought in by companies to augment and audit their in-house PPC talent, or to audit their agencies. That resulted in saving them money, moving quickly, and generating more sales for them. The fee I charged, and subsequently what Granular charges, is always paid for by measurable growth in sales and savings. Much more emphasis is put on the ROI of an outsourced service. Can you imagine asking an employee for them to cover their costs and then some?! That doesn’t create a great “insourced work environment.” With agencies – you can be a bit more demanding of your PPC team than you can if they’re sitting next to you in the office. Outsourcing success.
When Companies Trend Toward Insourcing
A 2018 survey conducted by the Association of National Advertisers revealed that 78% of surveyed businesses utilized some form of insourcing in 2018. That’s a 20% increase over 2013. Data seems to show a trend toward bringing more marketing team responsibilities in-house during times of economic security. When the economy is good, it appears that advertising agency teams lose business as more companies begin insourcing marketing and building internal marketing teams. In short, when businesses have greater financial bandwidth and don’t have to worry about adopting leaner operating models, they are more inclined to start insourcing advertising teams.
We were actually seeing some of that occur in 2019, with companies deciding to build their own team, use us to consult and think higher-level for them, but use our daily management services a bit less. The economy was on an absolute tear! Granular was more attractive to some large companies as expert PPC consultants and less for day-to-day work. We and many other agencies that I polled (20+ agencies) confirmed they saw the same trend of insourcing in 2018/2019.
When Companies Trend Toward Outsourcing
Anytime a recession sneaks slowly or crashes down suddenly on the economy, wise business owners naturally consider how to cut costs and minimize financial strain. One way to do this is by outsourcing instead of insourcing marketing teams.
In 2008, as the economy took a sharp nosedive and businesses struggled to stay afloat, there was a huge move toward outsourcing. This movement primarily affected the IT industry, but it also affected marketing and advertising agencies as well. Big marketing salaries are often first to go on in-house teams and as we’ve seen, even on larger agency teams.
COVID-19 hit in late 2019 and impacted business hard in 2020. Predictably, we saw another boom in outsourcing growth. This time, with Granular taking on many new clients and even taking on more responsibilities from existing clients – including work that would often be done by an internal marketing person. We have been absolutely crushed with new businesses reaching out to us to help them augment their now laid-off marketing team. It’s a weird position to be in, but we’ve seen it before.
No Right Answer Other Than “Boomerang”
I admitted that we have lost business at Granular to “insourcing”, companies hiring and building their own marketing teams with PPC experience on staff. We have also had a number of those same businesses come back to us after their failed experiment. It’s hard to retain talented PPC experts. We’ve known that for a long time…and when a company tries to build their own team with 1 or 2 PPC experts – we know they’re up against the odds of retention.
As a business owner or marketing leader trying to build an in-house team that includes a PPC expert – just remember that there are a number of other companies trying to hire away that same person. One includes Granular. A place where a PPC expert can work alongside over a dozen like-minded professionals, live and breathe PPC all day long, no corporate red tape, crazy perks, etc, etc. In short, building an in-house team isn’t as simple as putting out a job description and hiring – that’s a shortsighted initiative and it often leads to folks reverting towards outsourcing expert consulting services.
What This Means for Your Business
While 2019 turned out be a roller coaster year in terms of recession predictions, 2020 appears to have confirmed a recession with unprecedented business disruption and unemployment. If the economy improves or remains steady, the demand for insourcing will likely increase. If the economy takes an unexpected dip, many businesses will probably move toward outsourcing their marketing needs to an advertising agency.
Discover the Benefits of Outsourcin
Are you wondering how outsourcing your marketing needs can benefit your business in any economy? Send Granular your questions through our convenient online form to learn more about the affordable, data-driven services we offer. Whether you’re interested in PPC management, Google Shopping, Amazon eCommerce or Analytics consulting – we have a service that will meet your needs.
Sources:
https://www.ana.net/content/show/id/50728
https://www.pcworld.com/article/156591/outsourcing_recession.html
