If your agency is still producing all of its creative production work in-house, you’re not only falling behind the competition, you have been for a while.
A recent report produced by We Are Amnet and TKM has demonstrated beyond doubt not only the extent to which creative services are now offshored, but just how mature the market has become and the efficacy of the model. A business strategy that may once have been viewed with suspicion and doubts over quality is now the norm in the creative industry, having proved its worth well beyond simple financial considerations.
How did we get here?
Creative outsourcing was born out of a need for efficiency, and it was marketers, advertisers and brand managers who led the way. From around 1990 those organisations began outsourcing functions they couldn’t adequately fulfil internally, and largely as a cost-saving measure. This grew steadily until the recession of the late 2000s, when the trend was temporarily reversed.
During the recovery, the paradigm shifted to offshoring, largely to India at first, with packaging at the forefront of the trend. The strategy has been growing steadily ever since, to the present situation where 76% of respondents to our survey offshore at least some creative services. And in the last year to 18 months, the Covid-19 pandemic has served to accelerate the trend.
A mature market
In a wider Martech landscape now worth $121 billion (£86 billion) according to statista.com, the current business model for the vast majority of creative companies is hybrid. In fact half of our respondents have had an offshore partner for at least five years, with 31% of them offshoring at least 40% of their work.
Offshoring is not solely about saving money. Though cost savings can be as high as 80% against domestic talent, our findings show that the motivations for offshoring have matured with the market. Some 65% of our respondents place expertise and capability as the primary factor in their decision, clearly demonstrating the confidence that most companies have in the talent available in India, the Middle East and beyond.
For most organisations, offshoring is about agile scalability, with access to greater capacity and more flexible hours as and when they are needed. In-house production and offshoring are clearly not mutually exclusive, with the majority of agencies retaining in-house facilities and talent, using them to produce a greater percentage of original creative work.
Do it right if you want it to work for you
Our report results speak for themselves: 77% of respondents are satisfied or very satisfied with offshoring, with only 4% reporting dissatisfaction. The most important factors in choosing a partner and building a relationship are structured communication planning, regular reviews, and the implementation of rigorous SLAs and quality control. Get these right and offshoring works very effectively alongside your own in-house capabilities.
That’s why Smartshoring® has been developed specifically to complement the hybrid model. It’s a balance of onshore and offshore resources that leverages global partnerships through strategic partners, chosen to tap into mission-specific talent and deliver optimal quality and service delivery.
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