Most SMEs don’t have marketing departments. They may have a marketing manager, sometimes supported by a marketing assistant. The reason is simple – these companies don’t have the marketing budget to warrant a marketing department.
This causes three problems for the business:
1. High churn rate of marketing staff
2. Lack of skills to undertake marketing effectively
3. Lousy results from marketing activity
Apparently marketing managers in SMEs turn over at a rate of about three every two years. The typical tenure is 6 to 9 months. In large marketing departments it’s more like 18 months, which is another problem but not for today’s discussion.
The high churn rate is due to the fact marketers tend to be social creatures. But their job involves them working in a back office on their own, or with an assistant, with small budgets on small brands. Not a very inspiring environment.
Management often doesn’t understand marketing – let alone fathom why the marketing manager isn’t a copywriter, graphic designer, website developer and PR expert all rolled into one. After all they’re a marketer aren’t they – the human Swiss Army knives of executive row?
These marketing managers don’t appear to do anything but contract external suppliers. But management doesn’t understand why they hire a marketing manager who then hires suppliers – and the circle of frustration between marketing and management continues to go around and around.
The second issue is the problem of skill. Despite what some digi-spruikers claim, there is no such thing as a Marketing Superman. Yes, those aged 50+ most of whom have 20+years of online experience running parallel with 30+ years of analogue experience – might squeeze into some tights and a cape.
It wouldn’t be a pretty site, however they do know how to use more channels than anyone else, particularly those half their age. But they don’t want these jobs and aren’t even considered for them because of the ageism in the market.
The digital world is changing so rapidly, very few can legitimately claim to be an expert in all channels. So a young marketing manager is on a hiding to nothing, as they have no analogue experience and very limited digital experience. They cannot do their job effectively because they just don’t have the skills, or the budget to hire additional specialist staff, nor to hire specialist agencies.
Consequently the work they produce is ordinary and struggles to pay for itself. The management starts asking questions, while the marketing manager starts looking for a new job.
Outsource the whole marketing department
So the role of marketing within SMEs – particularly mid-size companies – is changing. It’s now more cost effective to outsource your marketing function to an agency that provides all the marketing skill sets under one roof. After all, if you’re paying between $100,000 and $200,000 in marketing salaries and still outsourcing your marketing budget to suppliers, why not pay a marketing agency a retainer of say $10,000 to $25,000 per month instead?
You cut out the middle man. The agency has specialist marketers, media planners, website designers, copywriters, App developers, SEO skills, social media managers, content creators, et al, who can manage all your marketing, while you save on the overhead cost of a full time marketing manager/team. Assuming of course your management understands marketing.
I’m aware of a number of companies in manufacturing, retail, motor parts, direct wine sales and financial services – ranging from small to large businesses (some turning over more than $100 million) – that have outsourced their marketing department. I’ve even helped them find the right marketing agency – note I said marketing agency, not advertising agency.
This probably wouldn’t work in large marketing departments of blue chip brands. But for small and medium size growing companies, the outsourcing of marketing management can be a more cost-effective way to spend your total marketing budget – salaries and media/production.
Although come to think of it, I do know some very large marketing departments where the marketing managers have outsourced so much of their marketing activities, they spend their whole day just managing the outsourced suppliers. Their work-life involves exciting things like attending meetings, pouring over WIP spread sheets, approving purchase orders, haggling with lawyers for copy approval, attending shoots or mindless focus groups and other such meaty marketing marvels.
Come to think of it, I might advise my kids to avoid marketing as a career path…
15 Comments
Thank God! Your article is spot on. I am seeing so many marketing jobs advertised expecting the marketing manager to have ‘graphic design’ skills, ‘indesign’ skills, etc. You have just articulated exactly what I have noticed and wondered about. Thank you again for making so much sense and validating my thoughts and opinion. At least two of us are right. 🙂
Thanks Naomi – just trying to be the voice of reason:)
I think the answer to your question is , Not Yet ( so long as you are very good at the job). You might actually find that soon there is a renaissance in the inhouse role as so many “outsource digi experts” find it hard to differentiate themselves in a crowded market place. Just about every other day I receive an unsolicited email from an SEO, “digi expert” claiming to be the answer to my online marketing prayers. I dont have the time to attend that many webinars, skype meetings ( anything but face to face meetings) I’m afraid…….
I agree on the unsolicited digi-spruikers, they don’t understand the cigarette burns they leave on the 99.99% of people who delete their messages. And the worst thing a company could do is outsource their business to a supplier that only had digital experience. But there is definitely a growth occurring in outsourcing the whole marketing management role. I even spoke with a recruiter who said they’d consider it for their clients – as long as they could still earn a commission:)
I agree with your logic Mal, but it becomes extremely complicated if CRM strategy is part of the mix. I am convinced that CRM must be embraced company wide and therefore it cannot be lead externally. In this case a company could outsource above the line marketing and CRM data processing, but it would need a strong (and mature) CRM/Marketing Manager to hold the whole thing together.
Thanks Richard – agree with you. Just not sure how many have CRM systems. I ask my audiences if they have a simple database of customers and am lucky if 10% answer “yes”.
Right on there Mal. Sadly…
As for staff turnover, “CRM” is even worse – and for the same reasons. During my recent years in Asia I lost count of how many companies had CRM “Managers” who were invariably young, isolated from marketing and with no authority or maturity to influence the business.
All this and they were still expected to work miracles by senior management who had no idea of what CRM strategy is!
Result – disillusioned staff, rapid turnover, CRM given a bad name…
Well stated Mal. I saw the light at my current company and outsourced the activities associated with marketing which allowed me to focus on developing new business and services. There is no way on earth I could specialise in all those functions and be an effective business development manager.
But caution must be taken. It’s akin to outsourcing your safety tasks as many SMEs do. You cannot simply wipe your hands clean of understanding the process and theory of marketing strategy. It’s most important not to outsource your thinking. You must remain an intelligent customer. If the strategy fails, who’s accountable?
My advise when outsourcing marketing:
– Build a very strong relationship with your marketing suppliers (choose well)
– Don’t put all your eggs in one basket (maintain relationships with other providers)
– Trust them and understand they know more than you in marketing execution (but don’t take everything they say as gospel as they can be wrong)
– Occasionally research their work and match it to best practice (if your lucky enough they may be setting it)
– Challenge them on their work and play the ‘devils advocate’
– Stick with it as it takes a while to have an effect
Remember that you know your business / market better than they ever will. Use that to your advantage when developing the strategy. Let them do the rest with the marketing execution! It is the best way forward.
Thanks Osman – good advice
Very interesting article Mal. True indeed most small/medium businesses nowadays have every role on board except a marketing something.
It seems that more and more of these businesses embrace the following strategy:
– They need help with marketing, let’s get an agency
– They don’t know much about marketing, so they get a marketer to do his specilization (i.e. ppc) and have him/her handle the agency
I have been there and a friend as well. I think it’s a pretty solid strategy for small/medium businesses, as they can’t justify the costs for full time copywriters, ppc, creative etc.
It can work out well if they choose the agency correctly and senior management is not dillusional…
Do you think we might be going towards a more and more outsourced marketing department, regardless of the size of the business?
I think even big businesses have a number of contractors, no?
Thanks for the heads up, terrific post.
Thanks Alex – I do believe there are so many channels and areas of expertise required that it is difficult for SMEs to manage it internally – they just cannot afford the people, as so much of the digital executions are labour intensive, not paid media where the one execution runs numerous times. So it is becoming more sensible to find a marketing agency/supplier that can provide labour to manage the tasks. As for large brands, they have always hired agencies for marketing communications, but they keep marketing management internal. It is going to be an interesting few years…
Malcolm,
Excellent, thought-provoking post, as always. This point has been touched on above but I suggest you can only safely outsource marketing if the owner/CEO understands marketing and can effectively direct and manage the outsourcing process. Drucker reckoned the key functions in any business are marketing and innovation, so you have to have control of those otherwise someone else is running the business!
The problem is…all too many owners/CEOs/managers don’t understand marketing as you have pointed out both in this post and others! Also, there’s a very good point made in one of the comments that everyone in the company has to be on board with the marketing strategy and implementation. That’s hard if key marketing decisions are outsourced.
As a freelancer, I’m all in favour of outsourcing of course! But i suggest it works best when you know what you want to do but need additional resources and talent to implement.
Kevin Francis
Thanks Kevin – yes it is not black and white, as it depends on the internal knowledge of the role of marketing. If the business owner or management have a marketing background there is more chance of success when managing outsourced marketing management. There’s obviously room in the market for a number of models, but am sensing there is a growth in full outsourcing.
Sound sense, as always, Malcolm. On the subject of understanding the role of marketing, I recently presented to a new marketing manager at a fairly large company who had moved across from sales. At the end he said… ‘That’s all well and good, but how do I get more sales leads?’
When you have a hammer…
Yes Patrick, though these days the hammer is often, “just create an idea for Facebook that will go viral”. Marketers don’t want to pay for media to get leads when they can get everything ‘free’ on social media. The world has gone bonkers!
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