Is the In-House B2B Marketing Department Going Away?


My last post triggered a heated debate (mostly in the LinkedIn B2B Technology Marketing Community) about the dramatic changes we see in the B2B marketing function. One of the interesting topics that came up was outsourcing. As you know, more and more corporate functions are moving to a service and subscription based model where companies aggressively outsource everything that is not core to the business in order to gain advantages related to cost, scalability, and agility. This trend is nothing new, it has been building for a long time and many corporate functions like manufacturing have been outsourcing for decades. It seems as if the marketing function has only recently caught on to this trend in a major way, though.

Is marketing moving to a subscription based model?
We sure see this trend in the marketing automation platforms we use on a daily basis – webcasts, email campaigns, lead management, and many more. Many applications and services are not residing in-house on some server in the datacenter but are instead delivered in the cloud, provided as Software as a Service. This not only reduces fixed cost and enables pay as you go models; it also helps marketing to get the job done more quickly, without having to rely on the IT department (which in too many companies is becoming a bottleneck instead of a business enabler – which is further accelerating the push towards SaaS). The next phase I see is that SaaS vendors are partnering to provide end-to-end solutions that span multiple platforms so you can basically run all of your marketing automation in the cloud through a single interface (Salesforce.com is leading the way here with a myriad of 3rd party apps linked into the Salesforce.com ecosystem that expand the value chain step by step).

Outsourcing marketing talent
Do we see the same trend developing for outsourcing of talent? Sure, marketing departments have always outsourced campaigns, creative services, and projects to ad/PR/creative agencies. But it seems to me - observing what is going on in many companies and talking to a lot of people in the B2B marketing space - that the marketing outsourcing trend has dramatically accelerated over the last 12 months. Talent outsourcing is also moving up the value chain to projects that have traditionally remained in house.

What do you see happening?
Do you see the same trends? Is B2B marketing moving to a virtual model where a company only has a minimum core staff of true marketing experts that define strategy and programs, and then orchestrate a complex array of vendors, freelancers, and platforms to deliver on marketing goals? Is the future for the majority of marketing professionals a freelance model of working for dozens of clients at the same time? What is the barrier where the required level of domain expertise and coordination cost are outweighing the incremental savings and flexibility benefits?

Is the classic marketing department dead? Looking forward to your thoughts and observations on the topic.

8 comments:

Kim McMahon said...

Hi Holger,
I'm looking forward to hearing from the corporate marketers out there on this topic.

What I have seen is a huge jump in outsource. I am not only doing project based work like writing content (one of the first things to outsource), but I am also doing strategy and implementing product launches, creating the strategy and implementing an event plans, and overall marketing strategy to help my customer get the most out of their marketing spend.

And this is with more than one customer.

Is this the future? And your question "what is the barrier..." - not sure of the answer. Maybe we should be thinking about how to address "domain expertise and coordination cost" barriers with our customers. Are there other barriers?

Looking forward to seeing the discussion!
Kim

David Valdez said...

There are areas where domain expertise is really a requirement. Moreover, there's a considerable value in the product stories generated by the product creators. While there are aspects of marketing that will make sense to outsource, significant marketing roles remain inside companies. I can understand marcom and campaign activities leaving the nexus, but product definition will remain, IMO.

David Valdez said...

There are areas of product marketing that make sense for outsourcing, but there are significant areas where domain expertise will always trump, such as product definition. I cannot imagine large companies relying on outside agencies to develop new product offerings. I can see product evolution handled externally, but not initial definition. Just my .02...

Holger Schulze said...

Kim & David - Excellent comments. MarketingSherpa today released a new chart that shows outsourcing plans for key marketing functions: http://www.marketingsherpa.com/article.php?ident=31647#

PR tops the list, followed by SEO, then email broadcasting and management of paid search campaigns.

Mary Conley Eggert said...

Very interesting, Holger.

Fun to also dig deeper into the Sherpa article to see that B2B is leading B2C in social media marketing. No surprise there, given the fickle nature of consumers in B2C and the highly relational nature of complex, B2B sales.

Regarding the future of work, it's clear to me that we're all temps, whether we're on the inside or the outside.

Unfortunately, our human-sized RAM means few are effective working for 12 clients at a time.

In looking at our clients and the consulting/outsourcing model of many members of the Marketing Executives Network Group, an esteemed group of senior-level marketers (see mengonline.com), I see a better model being adopted. Rather than purchasing a la carte freelance help, corporations pay for deep industry insights and focused, self-managed and self-reporting talent to achieve specific objectives. Such talent is not commoditized but receives a premium to fuel the org with insights and help members of the C-level team deliver on specific business goals.

Sudha Kumar said...

Very interesting post and resonates with an idea we have been articulating to our clients. Our view is that marketing agencies can be likened to a shared services model where the agency (and also employees of the agency) multiplex between clients; at the same time, the client is able to utilize the agency for their multiple requirements. What this does is it optimizes costs for the client ( no dedicated resources), while also gives her the advantage of sourcing multiple services from one place. We operate on this model and have found that it appeals to companies- big and small in the hitech space, which is our focus area.

Jackie Kuehl said...

I agree with David above that certain marketing roles need to remain in the organization to ensure marketing is relevant, measured, and impacting revenue. Having been on the corporate and agency side, agencies have tactical experience, but tend to lack real insight to align with corporate objectives. Or they tend to 'sell' the services they have vs the most important (which may be beyond their scope).

Similar to the topic at hand, I like to think of companies as an accordian organization being able to scale up and down based on need.

Finally, regarding the article from B2B and the quote that B2C is ahead of B2C: the reason could be that B2B have highly defined targets which may be easier to reach? B2C segments tend to be much broader.

Brenda said...

Hi Holger,

I've been on the agency side for all my career and have seen our business ebb and flow over the years. Right now, (maybe because of the economy?), we are seeing more new accounts.

So, I don't know if this is permanent or not.

On a related note, I just read an eBook (from www.blunders.com) about how company execs do a pretty terrible job (blundering, hence the URL) keeping sales people focused on selling and doing marketing tasks that should be delegated to their marketing staff (or outside agency).

Again, I don't have the corporate perspective to know how true this is, but I do have to wonder when companies have their sales people doing their own PR and blogging and aren't out there selling.

So I guess I'm asking why companies aren't delegating even more?

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