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Outsourcing for advertisement refers to contracting out of advertisement. Here, two companies enter into contractual agreement that involves one company offering out advertisement plan to another company. This means that the company outsourcing should pay the firm, which is receiving the advertisement.
Advertisement outsourcing is the latest trend in advertisement. With the rising advertisement costs, most companies are unable to carry out heir advertisement incentives, hence a need to outsource becomes the much-wanted option. Advertising technologies are ever-going online meaning that the widest market is always going to be achieved. Think of Coca cola customer somewhere in Fiji Island and another one in inner Tokyo. All of them learned of the Coke product through the rigorous advertising efforts by the company.
In the rapidly growing global competitiveness in business sector, advertising contracts are inevitable. Since some companies are capable of handling advertisement costs and still operate successfully, they have resorted to advertisement in order to increase their revenues. This method of operation makes the business to generate a lot of profit.
When a firm outsource for an advertisement, it subcontracts another company to control the role of advertising. The most important outsourcing services include designing, telemarketing, concept development, content writing, and web development (Rivard et al 1999).
There are many reasons why the companies outsource. When the company outsources for advertisement, the immediate reward is large amount of profit. By outsourcing, our company will be in a position to become more innovative and carry out wider product development results. This is because a wide array of profit is got from being an advertisement platform.
Costs savings is another benefit why companies do outsource for advertisement. Through outsourcing, can reduce scope, re-negotiate and re-price. Advertisement outsourcing enables companies to access lower economic costs through off shoring (Hirrar, 2008). Companies do outsource because it is advisable financially, according to survey. Shareholders also benefit from profits gained from outsourcing.
By outsourcing, our company will be able to enhance the quality of our services. A great improvement in quality is achieved by contracting out advertisement services with a service level contract and access employees with greater experience in the sector. Outsourced markets for advertising will enable us to nourish our leadership, experience, and expertise to the advertising needs of our company with limited costs of adding extra full time staff.
Besides financial gains of advertisement, outsourcing to our company, additional expertise, and skill in marketing strategy is enhanced. Creativity of our company will be developed (White, 1999). Outsourcing will also provide afresh external perspective of our company as the outside agencies will view our operations as effective and efficient. Outsourced advertising will also enable us to safeguard a sense of focus, priority as far as critical projects is concerned, and making us understands that our objectives will never be put at stake.
For efficiency in advertising outsourcing, we need to gauge whether we are able to implement the required technology. With changing customer mindsets and preferences, advertising outsourcing have become critical. Thus as we evaluate our choices in outsourcing various elements in our operations, we need to consider costs and benefits. When we carry outsourcing with well-informed reason, advertisement outsourcing will help our business to grow and save a good amount of money.
Let us focus on core activities of the business. During the periods when the business is experiencing increased growth, our back-office operations will also increase. The increase in these operations will require the use of more resources-both financial and human at the expense of vital activities of our company. Outsourcing advertisement therefore will allow us to re-focus on the general activities of business that are vital without putting at stake service quality of back-office operations. If our company, for example, lands a great contract that will increase the level of advertising in a short period, we need to outsource advertising.
Cost and efficiency savings need to be considered also when deciding on whether to outsource or have an in- house advertising. Most back-office operations are very complicated, but due to the moderately large size of our company, it prevents us from performing these operations consistently (Khosrowpour, 2010). If for example the advertising overheads have increased in our company, employing more part time people to carry out advertisement will not keep up with huge advertising needs. The rule of the thumb therefore is to outsource our advertising to a reputable firm that specializes in advertising, because in house advertising will not satisfy fully the ever-growing advertising needs of our company.
Overhead reduction should be considered before we reach an amicable solution as to whether to outsource or have an in-house advertising firm. Overhead costs incurred in running back-office operations like advertising are often high. We need to consider outsourcing these advertising functions. An example is when our company experiences growth and therefore there is increased need for space. Our current business location is very expensive and this implies that we will not get a room to expand. The recommendation will be to outsource operations like advertising so that there is a reduced need for more space (Winter et al 2009).
Deciding as to whether to outsource advertising or to have an internal advertising agency depends on operational control. If advertising costs are becoming extremely too high to be handled by our company, we need to consider outsourcing. This is because having the internal advertising agency will inflate costs, hence reducing our profitability. If, for example, our advertising department has been performing poorly for a length of time, are the main reasons for seeking outsourcing. When we outsource advertising, the outsourcing company with better advertising skills can make our advertising needs a success rather than containing a non-performing internal one. If our advertising department also has many projects, there are insufficient staff and stringent budget, a contracted outsourcing agreement will make us to retool their requests and ensure that control to that area is more effective (Hastings et al,2010).
Staffing flexibility must be considered when deciding whether to go internal or outsource. My research indicates that if we outsource, it will enable our business operations that usually have perennial demands to attract extra resources whenever we need them and release those resources we are done. If our advertising department is not effective during peak advertising periods (when the product is required because of its seasonal demand), outsourcing the advertising functions will provide extra resources for a stipulated of time at a constant cost.
Continuity and Risk management should be considered. During periods of large employee turnover there will be increased inconsistency and uncertainty to business operations. Outsourcing will ensure that continuity is upheld while we reduce any cost or risk that can result from substandard operation levels in our company. If for example our Head of Advertising Department is on an extended official leave and three of the advertising assistants leave the company for new job prospects in a short span of time, outsourcing the advertising function will lower the risk ad enable our company to continue being operational.
When we consider developing internal staff, it will affect our decisions as to whether outsource or go internal. Our large business size requires enough staff with relevant skills. On-site outsourcing of advertisement will bring personnel with required advertising skills to our company. Our existing staff will work with them in order to acquire new skills. If we want to upgrade or improve our advertising department and our advertising personnel do not have the necessary skills to design a new upgraded advertising platform, outsourcing of the upgrade project and getting the services of outsourced advertising personnel to carry out their work on-site will enable our advertising personnel to get relevant skill set (Barrar et al, 1999).
Before any tangible decision has been made by the management, I need to bring in to light some of the disadvantages of out sourcing. The advantages of outsourcing I have listed above are actually reflecting the pitfalls of the internal advertising agency. The first disadvantage is that it will lead to loss of managerial control. If we sign an advertising contract to perform the task or carry out an on-site advertisement outsourcing, our management control of advertising will be lost to that particular outsourced company, and they can manipulate our outsourced operations for their own needs (Khan, 2007). Their operations will not be driven by the same standards and criteria that drive our company. They will be aiming at making profit from the services they are giving us. Therefore, let us stay informed, lest we plunge into unnecessary risks.
Other problems like hidden costs, threat to confidentiality of our operations, bad publicity, and quality problem will affect us. However, the recommendation, which seems to be workable, despite the shortcomings, is the outsourcing option. Internal agencies sometimes are inefficient and do not have enough capacity to reach out to large number of customers.