The benefits of offshoring aren't just limited to the IT world. See if sending your ad production overseas might work for your cost-containment initiatives.
Capitalizing on lower cost resources overseas is certainly not a new phenomenon; but what may surprise you is that offshore outsourcing is rapidly moving from experimental to mainstream in the marketing world.
Forward-thinking businesses and agencies can lower ad production costs by 40 percent or more by moving components of the process offshore. Though this capability has existed for a number of years, a few recent trends are making it a mainstream reality.
With the shift of dollars from traditional to new media, the production spend in support of online advertising is now at a scale where companies can save significantly. Furthermore, the current recessionary economy is mandating that businesses reduce sales and marketing costs. While the $283.9 billion U.S. advertising market is only projected to increase 3 percent in 2008, online media spend is expected to grow 23 percent to $25.9 billion. Online advertising will comprise 10 percent of total media spend by 2009 and reach 15 percent by 2012. As a result, Gartner is forecasting a growth rate of 8.1 percent in the global outsourcing market.
It was not long ago when "made in Taiwan" conjured up images of cheap products and plastic Godzillas. Today it equates to semiconductors and laptops, and Taiwanese companies themselves outsource to China and Southeast Asian countries to take advantage of cheaper labor. Similar to the maturing and expansion of capabilities in the world of manufacturing, offshore outsourcing in the services industries is growing well beyond information technology, call centers and back office administrative functions. R&D and marketing services are just a few examples of strategic business functions where offshoring is establishing a firm foothold.
A viable and affordable option
As advertising dollars shift from traditional to new media, offshore becomes a more attractive and viable option. Take banner ads for example -- the numerous sizes and variations times the number of campaign concepts translates to a mind-boggling number of permutations. Throw in the increased usage of Flash and rich media, multiple rounds of creative revisions, as well as the unique tagging needed for performance tracking across venues, and the level of effort becomes very substantial. What makes banner ad production a good candidate for offshoring is it requires less oversight from the creative director than certain forms of advertisements, like TV commercials. An offshore team with the requisite creative and technical talent that understands the brand can produce the banner ads with a high degree of accuracy. In addition, files from these off-site locations can be transmitted instantly to facilitate faster reviews and delivery.
You’ll probably be surprised to learn the companies leading the charge. For example, Ogilvy & Mather recently opened a 24-hour creative support studio in Bangalore for its global accounts such as Lenovo. Wieden + Kennedy opened an office in Delhi to serve local and global accounts, merging with A Creative Agency to form W + K India. And they're not all new ventures. My company, Sapient, opened an office in Delhi in 2000 and currently has over 3,000 people across three offices in India alone. Sapient integrates U.S.- and Europe-based studios near the client geography with creative and technology teams in India to produce banner ads, microsites and web/mobile applications.
India has a natural advantage in an English-speaking workforce and scale. However, while agencies vary in their scale and maturity with respect to offshore ad production, the phenomenon isn't isolated to India. Indeed, the talent is abundant globally, and advertising executives can choose from agencies with services based across India, China, Latin America, Eastern Europe and Southeast Asia.
Now, before you slash budgets and reduce your staff, understand what it takes to be successful in offshoring ad production.