The process of sourcing talent for marketing teams has been changing. Here we talk through the difference between insourced and outsourced talent, the pros and cons of each, and our predictions for the future of sourcing talent in 2021 and beyond.
Insourced VS Outsourced: What will marketing teams look like in 2021 and beyond?
The Future Of Work category and the organizational structure of the category have been one of the most talked about concepts in 2020. The future of work will largely be defined by three concepts: data, decentralization, and automation.
If 2020 has taught us anything, it is that remote-work works. From flexible hours, improved innovation, redefining work-life balance, and increased productivity, I’m calling the word of 2020; hybrid. It’s been a hybrid of remote and in-office work, a hybrid of emotions, a hybrid of governmental restrictions and openings, and now brands are understanding how their spend will be balanced between a hybrid of insourced and outsourced teams.
At a high-level, insourcing is the process of having employees or a specific full-time department created by a brand to complete tasks or take care of specific business processes internally. Contrastingly, outsourcing is the process of having an external team, be it an external agency, consultant, or freelancer completely or partially take over and manage some or all of your business processes.
So how do we balance insourcing VS outsourcing? There’s no one size fits all. Pre-COVID-19 many traditional advertisers outsourced work to a hybrid of agencies and contractors, we then saw brands like Pepsi, General Motors, and AT&T build internal agencies. And on the other hand, we saw brands like Zara, Costco, and Krispy Kreme make conscious decisions to never engage in outsourced advertising.
There are positives and negatives to each scenario. Outsourcing can foster diversity of thought by bringing in expert talent and guidance. It’s a cost-effective approach that allows businesses to focus on core competencies while allowing providers with expert-level knowledge to handle certain processes. Outsourcing introduces the ability to scale a team and organization overnight, and doesn’t have the costs associated with recruiting, hiring, and training a full-time employee.
Insourcing however, allows brands to often maintain more control over the process, set guidelines, and have more flexibility when it comes to customization. Ordinarily, insourcing is more expensive in the long-run and does not allow scalability to be as accessible. Costs associated with recruiting, hiring, training, and equipment have to be accounted for, and the more your organization grows, the more the costs will accumulate. A key advantage of insourcing includes a desire for tighter integration and alignment with the business, greater cross-functional collaboration to improve speed to market or accelerate digital transformation, and better control of stakeholder alignment.
With marketing budgets taking a significant hit in 2021, brands will need to take certain measures to rebound with stronger budgets and hybrid teams going forward. According to a recent Forrester Research report, marketing regrowth, when it does bounce back, will be conservative, leaving overall marketing spend starting in 2022 to be nearly 30% behind 2019, a time when the unemployment was at an all-time low. From now through 2021, we are predicting four actions that brands will take to strike the hybrid of insourcing and outsourcing.
Brands and agencies will continue to downsize marketing teams
Forrester's study shares that the remaining months of 2020 will see the loss of 469,000 marketer jobs, taking away $162 billion from CMOs’ payrolls. Through 2021, we expect the number of businesses with marketing staff to drop as nearly 20% of mid-market firms and 1% of enterprise companies will likely never reopen. Brands and agencies will engage contractors on project based work to only upskill where necessary.
Media spend is down and may stay down
Mid-pandemic, we saw 81% of large advertisers deferring or cutting campaigns. Forrester estimates this will equate to a 23% decline in total media spend in 2020. Offline media will be the hardest hit, falling 30% this year. Even with more people at home, brands won’t commit to advanced media buys or drive sales when demand and supply chains are so unstable. Social media will only dip 12% as marketers redirect promotions or events budgets into support-oriented branding campaigns, gaining share of voice and goodwill.
The communications and marketing and tech stack will be streamlined to only essential functions
Categories like data and analytics, advertising technology, and marketing automation are predicted to remain stagnant or only marginally grow. AdTech is suggested to falter by 15% in 2020 as programmatic ad investments plunge. Marketing automation, however, — which counts for more than half of all martech spend — will grow 7% through 2021 as it supports vital brand and retention emails.
Agency scopes and contracts will downsize to save internal headcount
With agencies feeling the impact of the coronavirus from early on in 2020, it is still expected that outsourced agencies and will additionally fall by 12% by the end of 2021 and that strategy services spend will also dip over the next two years to the tune of 3% as brands delay payment or move projects to in-house resources.
While the industry is still treading water and understanding how to balance internal and external teams, the decision to insource or outsource marketing will be customized and unique to every marketing organization. Teams will need to factor in things like company size, business units, industry, marketing budget and objectives, and many other factors. One thing is for sure -- a hybrid of insourcing and outsourcing will increase diversity of thought, reduce costs, maximize efficiency, and achieve business goals.
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