Outsourcing — a word that divides opinion between agency owners across the world. For marketing agencies, it’s fairly common to outsource work to freelancers, specialists, or other agencies. But it’s also common to keep all activity in-house, and there are pros and cons to both. If you are the owner of a marketing agency, you may have found yourself toying with the idea of outsourcing work. Whether it’s a decision that is driven by increasing profits or boosting employee morale, it’s important to weigh up the risks involved. To help you make your decision, we’ve put together this helpful guide for marketing agencies with a focus on the benefits and drawbacks of outsourcing.
What Is Outsourcing?
Outsourcing is the process of delegating work to a third party or external company. It’s often done when companies don’t have the skills in-house to perform certain tasks or when their in-house team is too busy to accept new work.
What Types Of Things Can Be Outsourced?
In terms of marketing tasks, anything can be outsourced. In fact, there is nothing to stop an agency from advertising a range of marketing services and then outsourcing every single one of them to other agencies.
However, the most common tasks to be outsourced are specialist tasks that fall outside the skillset of an in-house team. For example, a marketing agency that offers SEO services may get a lot of enquiries relating to web design, given the crossover between the two areas of SEO and web design. They may choose to outsource this work to a web design agency given the specialist nature of the task.
However, it isn’t just non-marketing tasks that a marketing agency may choose to outsource. Other specialist areas of marketing include tasks such as pay-per-click advertising, social media advertising and email marketing — all of which could be outsourced to a specialist rather than tackled in-house.
There’s no right or wrong answer when it comes to outsourcing as an agency. Instead, it’s important to understand that there are both pros and cons before weighing up if the benefits outweigh the cons for your business. Like most business decisions, the solution differs from one business to the next.
Benefits of Outsourcing
Offer Specialist Services
One of the biggest benefits of outsourcing for a marketing agency is that it can lead to a broader service offering. Marketing is an extremely broad industry, and covering every area of marketing would require an extremely large team, which is a luxury most agencies cannot afford. Outsourcing offers a solution to this problem, allowing an agency to offer extra services without increasing in size.
This allows agencies to focus on what they’re good at and ensures they don’t spread themselves too thin in terms of their offering. For example, consider a marketing agency that specialises in PPC and only offers PPC services. They may choose to advertise SEO services on their website before outsourcing any SEO enquiries to a specialist SEO agency. Similarly, a content marketing agency may choose to outsource any of its PPC enquiries to the PPC agency.
In this instance, both agencies are finding ways to increase revenue without needing to spend time on training or hiring staff.
Networking
Building relationships with fellow agencies or freelancers can easily lead to long-lasting relationships that benefit both parties. Consider the PPC agency that we mentioned above that uses outsourcing to target clients that require SEO services. In return, the SEO agency that is being outsourced to may choose to send their PPC enquiries in the other direction. In this situation, both agencies can benefit from an extra source of leads.
There’s also no limit to the number of agencies that you can build relationships with. As mentioned earlier, marketing is broad, so a specialist agency may choose to network with multiple agencies, allowing them to have a wider offering, but also in the hope that multiple agencies are generating leads for the business.
Decreased Workload
Regardless of the size of your agency, there’s only so much work you can take on at one time. In fact, a common mistake that many agencies make in their early years is scaling too quickly, which can come from the leader’s reluctance to turn down work. If an agency is working with more clients than its resources are capable of dealing with, a number of issues can occur.
The first issue is staff feeling under pressure and being overworked. Whether you’re asking staff to work longer hours or you’re just expecting more from them, it can be stressful for your workforce to try and hit unrealistic targets and deadlines. The consequences of this can be severe for an agency. Morale may nosedive as a result of staff being expected to work beyond their means, which could lead to a loss in quality of work.
An even bigger consequence would be a staff exodus caused by poor morale or unrealistic expectations. While staff can be replaced, time will be lost to training and settling-in periods, which can impact productivity at a time when you are trying to increase it.
Many see outsourcing as a way of extending their team without going through the recruitment process, which can allow agencies to keep accepting work even when their in-house team is at capacity. This way, profits can continue to rise without worrying about overworking your team and damaging morale.
Scale Accordingly
If you are considering outsourcing to extend your resources, some people may question why you don’t just hire externally to grow your in-house team. While it may be a logical solution, there are certain factors that you may not have considered.
First, the obvious consideration is that hiring can be costly and time-consuming. Maybe your agency isn’t in a financial position to train new staff, or maybe you are going through a busy period and you simply don’t have the time to commit to a new recruit.
If you are going through a busy period, you need to consider that this may not last forever, which is another factor that must be considered. It’s common for agencies to have peak periods but also to have quiet periods. An e-commerce agency may notice a boom in business around Christmas but then experience a lull at the start of a new year.
Outsourcing is the perfect solution to this, as it allows an agency to scale up and down in accordance with its needs. When your team starts to become stretched, consider outsourcing. When business starts to die down, bring the work back in-house.
Drawbacks of Outsourcing
Loss of Control
When it comes to outsourcing, the main concern that stops agency owners is handing control of their projects to external sources. Most agencies that outsource work to other businesses have built long-lasting relationships over a number of years, but it can be a daunting prospect before this trust is established.
When an agency has no control over the standard of work being done on their projects, they also have no control over the standard of work. If you outsource work to an agency that has lower standards, it could easily lead to questions being asked of you by the client. After all, your agency is responsible for the work, whether it’s your team doing it or not.
If you are outsourcing a service that you have no knowledge of, it can also be hard to understand whether or not the work being completed is of a high standard or not. For instance, a marketing agency may outsource web design to a design agency, but it may be hard for them to spot errors in terms of design or development.
Communication Issues
When outsourcing work, you must also consider that it may add another layer of communication. Obviously, it’s important that you are in communication with the agency or freelancer that you are outsourcing to, so you keep clients aware of where projects are up to and what needs to be done.
Not only does this throw up the potential for tasks to be lost in translation, but it also takes up time. Projects can be slowed down by daily calls or waiting on replies, taking away from the time you can spend getting the all-important work done.
Some agencies choose not to disclose when they are outsourcing work, but being transparent about who is actually completing the work can take some pressure off in terms of communication. This way, the client can communicate with the external party and avoid using your agency as a middleman.
Confidentiality
Another issue is that clients may be trusting you with confidential information that they do not want to be shared with individuals outside of your organisation. Obviously, this throws up issues if you plan on outsourcing.
It may mean that you are asking other parties to work on your projects without all the information they require. If you do provide them with all the information, you may be sharing details that your client does not want disclosed.
Time Differences
An issue that arises when working with companies in different continents is that you will likely be working in a completely different time zone from you. This can make it challenging to organise meetings and communicate on projects. It can also be challenging to work on projects simultaneously, and you may find that there are holdups simply due to time differences.
Even when working with companies in the same country as you, they may have different working hours from your agency, which can create the same issue as mentioned above.
Ethical Issues
While it may sound dramatic, some people would argue that outsourcing work is unethical; it just depends on how you go about it. If you choose not to disclose the fact that you are outsourcing work, the client may feel betrayed, as they are paying you for work that another company is completing.
On the flip side, many agencies choose to be upfront about the fact that they are outsourcing work to another agency or team. While this is arguably more ethical due to offering full transparency, this could lead clients to simply cut out the middleman and save costs by going straight to the company you are outsourcing work to.
Final Thoughts
Marketing agency owners across the world will disagree on outsourcing, and there’s no right or wrong answer. Whether or not you should outsource work completely depends on your business and your circumstances. For smaller businesses, it can be a great way to increase resources without committing to new hires. For specialist agencies, outsourcing is best used to expand service offerings by connecting with specialist agencies in different areas.
As highlighted in the article above, the dangers of this include losing control of projects, an increase in the time spent communicating, and the issue of sharing confidential information with external groups.
When deciding whether to outsource or not, agencies should also consider their financial situation. Outsourcing can be cost-effective and is often used by smaller agencies. On the flip side, agencies with big budgets may be able to afford to pay for staff training or new recruits, which keeps work in-house, which is generally seen by most agencies as the most desirable option.
Chris Mcdonald has been the lead news writer at complete connection. His passion for helping people in all aspects of online marketing flows through in the expert industry coverage he provides. Chris is also an author of tech blog Area19delegate. He likes spending his time with family, studying martial arts and plucking fat bass guitar strings.