Outsourcing while insourcing — the hybrid approach!
Almost a decade ago, most marketers who prioritized cost savings and speed, started moving their creative operations model entirely in-house. Today, with the ever-increasing competitiveness and the need to produce more digital creative work at a faster pace, there has come a shift in the whole approach of creative production where internal agencies and external agencies are working together to drive maximum ROI on creative spend.
According to the IHAF 2018 State-of-the-Industry Report, to combat the problem of increasing volumes of work, in-house agencies are virtually expanding their teams by partnering with external agencies and third-party providers. The report shows that 85% of the USA's in-house agencies outsource some portion of their creative projects to external agencies.
Some major challenges faced by the In-house agencies driving the need to outsource are:
In-house agencies are typically hit with all aspects of advertising work, which today includes not only traditional design and production. In our world, strategy, media, social, production, marketing, experiential efforts—are all expected to be part of the team’s purview. These days, it’s clear that the biggest challenge for all in-house agencies is to manage growth with the increased workflow and limited resources.
The workforce and the work is changing: Things like the lack of easy access to internal skills and knowledge, the volume of creative projects competing to be executed in the same timeline, obstacles in process and workflow, communication requirements for internal collaboration, can increase the agency’s load, slowing down the team’s efforts.
Most importantly, cost is the main factor in all businesses. Internal agencies need heavy investment to cover the gap between less time and resources, which could mean hiring high-priced and high-level resources to fill the need.
The Hybrid Approach
As a result of these challenges, agencies are following the trend of maintaining a balance between their in-house and outsourced activities. Co-sourcing is the in-thing for sure, these days!
It appears that the core business strategy behind this move is to drive maximum ROI for internal agencies. They are closer to the brand and by sharing resources with outsourced partner, they’re driving cost-savings along with better creativity, performance and scalability.
In her interview with Robert Berkeley on Inside Jobs podcast, Marta Stiglin, an organizational strategist, in-house influencer and one of the founding members of the In-House Agency Forum said, “Even with the growth of the in-house model, a wide majority of corporate marketers recognized that in order to produce competitive compelling campaigns, that their objectives are really best served by coordinating resources that are both inside and outside the company. So that dated assumption that these options are mutually exclusive has all but faded away”.
There are creative internal agencies that do all the strategic planning and ideation of a campaign and outsource the execution work, which requires a special skill set. Even before thinking of outsourcing, it is very important for the internal agencies to understand what they do best and what they don’t. This clarity would help them take decisions about outsourcing work to external partners.
Some of the benefits of external collaboration are:
For any internal agency, the biggest challenge is to match up the speed of the ever-evolving creative industry. And the solution to it is nothing but controlling the costs by adjusting the headcount and letting the creativity thrive without any operational obstacles. Outsourcing creative services to external agencies provides the required flexibility, scalability and creativity to internal teams i.e. engaging the Right people for the Right job at the Right time.
Let's delve into the benefits of outsourcing in detail and know how it can be a rescue jacket for internal agencies to dig their way out from the complicated Creative Ops Cave!
Co-outsourcing can help save costs
The expense of hiring an external agency or an outsourced partner for a campaign or a particular type of creative work can be much lower than bringing resources in-house. In-house teams have the leverage to select part(s) or a creative project that they want to keep in-house or outsource when needed. While this process does require collaborative efforts but can improve ROI in the long run.
Potential to increase efficiency
When a creative work is executed by collaboration with an external agency, the resources at the internal agency can dedicate their time to other important work in the pipeline, or focus their efforts on other creative ideation, eventually enhancing their business efficiency and creativity.
Round the clock production
External agencies have the potential to scale up the team and work round the clock depending on the work requirements. They have prompt bandwidth to support unanticipated project volume and peak production time through the usage of streamlined workflow and technologies to connect and collaborate in real time.
Enhance the competitive edge
An external agency has access to a bigger pool of creative talent, who have the experience of working with various clients, eventually creating a knowledge base in tandem with the current creative trends. Outsourcing to such entities makes in-house agencies save on their infrastructure investment and the hiring and training of creative resources.
Final words: Over to you!
External agencies help in reducing the risk of execution and support internal agencies in making influential ROI with effective outcomes. With all these benefits of a hybrid approach, internal agencies have ample time to ideate, improving their edge over the competition while not losing out on a single opportunity that comes their way.
Whether it’s insourcing, outsourcing or co-sourcing, the choice depends upon your particular business requirements. The minor challenges related to outsourcing can be overcome with a little time investment in establishing appropriate creative operations.
If you need any more info on creative outsourcing, you can get in touch with us to understand in detail how we can help you in enhancing your productivity, business reach and profitability- all through our collaborative approach and technology solution Mediaferry, specifically developed to combat the challenges of creative operations.
Also, we would love to know your views on the hybrid approach. Feel free to share your thoughts or questions in the comments section below.