When we refer to creative process outsourcing, we are talking about sending a segment of the creative process off-site or offshore to a production team on a per-project or retainer base. The objective is either to save costs or to expand output and efficiency. Often both objectives are accomplished. Simply put, CPO works on behalf of a creative agency to produce work for the client, under the strategic direction of that creative agency.
The services offered by CPO firms are varied and range from end to end ideation to production and distribution, or can intervene at any particular point in the creative services cycle - these include creative assets deployed both and online and offline.
Depending on the needs and requirements of the creative services team, some companies outsource the only production while keeping ideation in-house. Others opt to outsource specialized tasks such as graphic design, photography and editing and video content production. The larger the business, the more likely it is to outsource the entire creative workflow as a way to complement in-house marketing teams.
Creative support can include:
Since the Industrial Revolution companies have constantly competed for markets and profits, seeking to gain the advantage. During much of the 20th century, most large corporations integrated into managing their assets in house. In the 1950’s and 1960’s the call came to diversify. This expansion required a broader management structure which became a hampering factor in the 1970’s and 1980’s. Many large companies began to focus on their core business and identified the processes that can be outsourced.
Creative process outsourcing was born as a result of the need to improve the efficiency of companies particularly in the areas of marketing, advertising, and brand management. Outsourcing became part of the business strategy in 1989. To begin with, in the 1990’s organizations outsourced those functions which they were not able to adequately fulfill internally. Later on, this evolved to focusing on cost-saving measures in which it would benefit the company to outsource functions related to the running of the enterprise rather than to its core business. These services would include among others accounting, data processing, and human resources.
As the outsourcing industry developed further in the following decades, the focus moved from ownership to partnership. Organizations realized that by fostering strategic partnerships they could improve their results, regardless of whether they outsourced their core or commodity functions.
Since the Great Recession of the late 2000’s however, there seemed to have been a temporary shift away from outsourcing and back to in-sourcing. Deloitte’s Global Outsourcing Survey of 2012 attributed this shift to the changing political climate, high labor supply, and wage deflation. By the time the 2014 survey and report was compiled, there had been a swing back to an increase in outsourcing consumption with 84% of respondents choosing to continue outsourcing. This trend is expected to grow concerning critical parameters such as locations, services, and functions. These outsourcing trends include both online and offline visual assets.
According to the study:
With these challenges coming to surface, volume, quality and variety, marketers are looking beyond the traditional avenues and networks to accomplish their goals.
Outsourcing some of the steps involved in the generation of engaging and unique content that can help alleviate the pressure on in-house creative service departments. In outsourcing some of this work, marketing departments can free up resources to focus on the strategic direction of bringing the product to market.
Creative services typically report into departments such as marketing, advertising or branding - whose focus is more on strategy than on execution and production. Creative ideation and production is tactical and as such is part of executing a predetermined strategy.
In today’s global world, there are two primary target audiences in any business communication - anyone and everyone. With an exponential increase in competition, companies need to make an impact with every chance they get.
Today, business communication is led by the customer. The traditional sales funnel concept fails to capture the current marketing environment. The explosion of product choices, a multitude of digital channels, the emergence of informed, and self-directed customers determine complex changes in business communication and ultimately a non-linear, and multiple layered approaches to marketing.
From a strict communication channel perspective, marketers need to brace two different but complementary areas of focus:
The presentation of products and services is of paramount importance given the competitiveness in every area of business. Both offline and online avenues need to be fully utilized to generate much attention.
The global economy is impacting every side of a company. For some products and services, their image is the most valuable business asset. There is a critical need to be visible offline and also in the physical space which their customers are occupying. This space can be right from packaging, labels, print media or billboards to traditional advertising and other types of publicity assets. Offline visuals like labels, packaging, banners, leaflets and other advertising or commercial visuals play as vital a role as their online counterparts.
For instance, with regards to consumer goods, scientists say that “the big idea here is that perceptual processes happen in the brain in parallel with economic value computations and thus influence how economic decisions are made.” Studies have shown that “the expected sales of a product or service also depend on the perfect packaging of that product or service. Again the accuracy of packaging depends on the right decisions regarding the selection of packaging elements”, from color to background, to fonts, to information provided.
The majority of consumers have a mobile device at hand. They are more connected to each other and online content than ever. Given this new user profile, digital marketing has become the norm. The massive proliferation of mobile technology has made digital content a must-have for any business. Business models that failed to adapt to digital consumers disrupted into irrelevance.
However, digital marketing demands new forms that meet the expectations and potential of the technology. Digital marketing success is not constituted by making an online version of a print ad and publishing it as a static or pop-up banner. Consumers are increasingly immune to traditional marketing strategies. Content marketing arose as a result of this new savvy consumer and technology enabled it.
The publishing industry is acutely disrupted by the rise of digital publishing platforms. The opportunity now existed for everyone to become a publisher of their unique content. Businesses who took advantage of the trend to generate and promote their own compelling and authentic platform-specific content stood out from the competition. Smart and engaging content helps build brand relationships with customers, positions any brand as a thought leader while also increasing sales.
A company must consistently create and distribute new and compelling media, to successfully deploy content marketing. Content marketing is essentially defined as an ongoing conversation between your brand and your consumer conducted through various digital media outlets used by your customer base. With content marketing, your business owns the media, unlike the traditional model of renting the content and space.
One of the many challenges creating an effective content marketing campaign is keeping pace with the need to produce new content for the existing and emerging channels regularly.
According to a recent survey by the Content Marketing Institute (2016), more than three-quarters (77%) of marketers plan to produce more content in 2016 vs. 2015, regardless of their organization’s size.
The global economy has determined profound changes in how people see the world around them. “See” is probably the most appropriate word to describe brand-consumer interaction in the global marketplace.
The two main drivers of the need to be seen as a brand are:
Both these factors have determined the birth of a particular kind of economy - the creative economy. The creative economy comprises of services aimed at maintaining a company or brand alive in both the physical and digital realm. Creative specialists are doing their best to assist businesses in their never-ending strive to capture the attention and stay on top the minds of their audiences by creating compelling visual media.
Given the relatively small percentage of the population using online facilities in developing countries, the potential of offline visual assets in brand positioning is substantial and significant. In the developed countries there is an even more pressing need to be visible up front and close, as there is significantly more competition in developed markets.
The creative development services market, as it continues to grow and develop could cause disruption on multiple levels. Production innovations, such as 3D printing are increasingly a reality that will be leveraged by independent producers. Creative designers will have the potential to be directly embedded in the production and distribution cycle. And the barriers to entering both local and global economies is lowered, thanks to innovations in the global creative economy.
Today, the audience for creative digital content is rising rapidly. Globally, we are far from having reached total internet penetration. The World Bank reports that only 30% of the population is online, in developing economies. In contrast to the 81% of the populations in the global North and West who are connected. The growth for businesses in the developing worlds is set to grow over the next several years, continuing an existing upward trend.
Creative content delivered without cost impediments like reproduction and distribution with digital tools and platforms. Technology continually improves, and content customized to even more niche market segments. Technology developments, including telepresence, virtual reality, voice recognition, artificial intelligence means that the creative economy will expand to encompass these platform and device innovations.
Creative services define a subsector of the larger category of creative industries. Creative industries, in turn, are part of the global economy that creates wealth by offering creativity for hire to other businesses. Creative services also refer to departments within larger companies that handle creative work such as writing, designing, and production. Often, the creative services departments report to the marketing division.
According to a recent study by MarketingProfs and Content Marketing Institute, B2B marketers have contributed to the rapid growth of content marketing. Businesses are increasingly seeing the value of investing real dollars in this effort. However, marketers are only moderately secure about the effectiveness of their tactics. Though executive buy-in is high and is spending, execution is struggling under the pressure to generate more content, more often.
According to respondents to the 2016 In-House Creative Services Industry Report, creative service departments divide their time almost equally between creative ideation and production. In most cases, they allow production to take up significantly more time than ideation, rather than prioritizing ideation above production. According to the same report, these departments are overwhelmingly likely to report to strategic, value-adding departments. The resulting minority, 28%report to non-strategic shared service divisions, such as IT and operations.
A picture is worth a thousand words. New tech and media developments have taken this statement to a whole new level in the relationship between businesses and customers. According to a recent survey by the CMO Council (2015), when it comes to content consumption and engagement senior marketing executives are focusing their strategies on visual. Nearly half of survey respondents indicate that the use of photography (46%) and video (36%) is critical to their current marketing and brand engagement strategies. While illustrations and infographics are important, they pale in comparison to the importance of effective visual assets like pictures and videos.
With the boom in technology connectivity, we can only agree that the impact of visual assets in business communication will grow - something marketing executives don’t fail to acknowledge. According to the previously mentioned study, more than half of marketing executives currently agree that the importance and use of photography will increase, while 60% believe the use of infographics will increase compared to last year. The greatest shift will happen with video, a visual asset that 79% of marketers surveyed believe will increase in importance (see Figure 2).
These trends are global across industries and geographies. Marketers are using more engagement tactics than they used last year, and the ones that increased most are all visual:
While being one of the primary drivers of the content-creation market, business marketing isn’t the only one. We see a shift towards visual and interactive content in all levels of education environments, from early education to industrial processes training.
Following the steep development curve in visual technology, we can assume that what is now ‘visual’ will soon become ‘interactive.'
While augmented reality and virtual reality are set to be the next disruptors in business and other communication media, the demand for compelling, impactful, dynamic digital content is going to rise exponentially. From historical reenactments in school to enhanced training programs in the industry, all forms of communication is profoundly interactive, and the need is not just for online but also deployed for offline assets and content.
Recently, more and more businesses and CMO’s are seeing outsourcing as an efficient manner to keep pace with the demand for new and high-quality content. The Content Marketing Institute reported recently that 44% of B2B marketers outsource at least some part of content creation. Meanwhile, 57% of B2B technology marketers outsource content writing, design, editing, and even distribution.
According to industry surveys, in 2015, 85% of in-house creative teams expect to either stay the same size or add capacity. Teams will grow in many ways including hiring new FTE’s, relying on freelancing, outsourcing more work to agencies and bringing in contractors using a managed service model.
There exists a clear trend whereby in-house agencies are looking to outsource production specific work in particular. This work is non-strategic and primarily entails production work for both online and offline products: design, photo editing, video editing, animation, scaling, formatting, testing and so on. The strategic and ideation component of the work, meanwhile, is less likely to go out of the house.
The movement towards outsourcing in the creative services is already beginning to take hold:
Considering costs involved is a high priority for unit leaders and businesses with in-house creative teams. Unit leaders are likely to be asked to compare their costs as compared to the expenses involved in outsourcing the same tasks. Time-consuming activities outsourced to providers on average have lower rates and makes financial sense. Of course, quality must also remain equivalent or better than what can is produced in-house.
The majority of creative services bill at an average rate of $80-100 for in-house agencies. These rates are from a 2016 survey of 435 leaders from in-house creative departments. Respondents worked for Fortune 1000 companies as well as SME and non-profit organizations and represented a wide array of sectors.
The benefits of outsourcing creative work must of course be weighed against the consequences and challenges in any decision making process. From the survey results below we can see that most creative service departments have available to them the opportunity to outsource work at particularly busy times.
Top benefits include:
These factors can greatly reduce production timelines.
From an overall business perspective outsourcing’s benefits also include:
The pros and cons of creative process outsourcing can be interwoven. Depending on how certain factors are approached, they can either be an advantage or a disadvantage to the company in the outsourcing process.
Some of these factors would include the following:The Human Factor
CPO’s offer the creative agency access to a team of creative professionals who are well-trained in cultural particularities, and who can quickly understand and interpret the client’s brief. This access to creative skill and talent is a definite advantage. However it needs to be balanced by a solid infrastructure within the CPO firm, with leadership, processes and principles firmly in place.The Software Factor
The use of software can be an enormous pro or benefit, and in fact an essential, when it comes to creative process outsourcing. However, the effective use of the software is dependent on the human factor. In order to get the most benefit from the software used, CPO firms need to invest time and effort in training their teams to use it proficiently. What sometimes happens is that only a fraction of the software a company uses is being effectively utilized which impacts negatively on their productivity.The Location Factor
By using a CPO, a company can literally have a worldwide team. Thanks to technology and digital advances, it is possible to be in constant contact with your team members wherever they are in the world. This is an advantage in that personnel choices are no longer limited to the town, city or even country or continent in which the company is located.The Time Factor
Differing time zones may be a con, but with proper consideration and administration this too can be used to advantage in that work on specific projects can be taking place around the clock. Another aspect of the time factor is that due to outsourcing certain projects, companies can free up time to focus on other needs and projects.The Cost Factor
Professionals work as direct employees of the agency, but are on the payrolls and rely on the infrastructural support of the CPO firm. The agency saves on recruitment, training, infrastructure, maintenance and retention costs associated with employees.The Job Factor
Loss of jobs within the in-house environment can be a downside of creative process outsourcing. Projects which may previously have been covered by company personnel get outsourced to off-site professionals. The impact is negative regarding undermining the loyalty of remaining employees within the organization. Each year in the United States there is a loss of more than 230,000 jobs due to outsourcing. However, according to economists, a corresponding number of new jobs are simultaneously created.
The global market size of outsourced services has grown steadily between the years 2000 and 2015 according to the figures published by the Statistics Portal. Global revenue from the outsource industry amounted to 45.6 billion USD in 2000, and 88.9 billion USD in 2015. The main portion of this revenue originated in the EMEA (Europe, Middle East and Africa) Region, and America.
Creative Process Outsourcing, as opposed to other branches of outsourcing such as BPO or KPO, is more recent and is expanding alongside rapidly developing technology. According to the Deloitte's Global Outsourcing Survey of 2016, the market for outsourced services is expected to continue to adapt rapidly, not only meeting the needs of the client, but also in many instance anticipating the client’s needs. Service providers are increasingly tending towards becoming innovation centers, looking for improvement opportunities for their clients rather than focusing only on cost savings. 35% of the survey respondents indicated that their outsourcing relationships brought valuable innovation to their organization.
Going forward, the future of CPO along with the rest of the outsourcing industry seems set to continue rapidly adapting its technologies and processes in order to provide valuable services both online and offline. Creative process outsourcing continues to make it possible for organizations to find the opportunities they seek to access the innovative marketplace and enhance the value of their organization. This is true not only for online CPO but also for offline CPO, both of which are needed.
With significant time pressures facing leaders of in-house creative services departments, the opportunity to train and develop more junior team members are increasingly rare. Given a high focus on outsourcing for production-related work, more time would be available to support younger worker’s development of strategic and ideation ability.
As the demand for more sophisticated visual and interactive content increases, it is highly expected that content production gets outsourced. In fact, content like virtual reality or augmented reality is time-consuming and resource-demanding to produce in-house. External service providing companies may prove to be the efficient solution for both online and offline creative process needs
The services that are most likely to be outsourced vary depending on the business model and their in-house agency’s expertise. More often than not the work outsourced relates to digital products with 96% of surveyed teams noting that digital work gets sent out. Television and radio work is also highly specialized and as such, the majority of teams outsource almost all of their TV and radio related content production. Video production work is the most often cited type of production work that is outsourced. Close to 90% of teams outsource all of their video production. With this level of outsourcing taking place, there is critical need for established best practices with relation to a vendor, freelance and agency management.
To drill down on the outsourcing of video-related work, we can see that the majority of companies rely at least partially on resources generated from an outside supplier. Video content producers have access to skills and production resources that an in-house creative agency does not need to own or have available on site.
Only 8% of creative departments generate their video content in house. With almost all social network platforms now hosting video content, consumers expect to see beautiful moving images in their content feed.
As demonstrated by the high level of video work that is outsourced, work that demands the highest level of domain expertise or access to specialized equipment is most likely to be outsourced. Writing, though it doesn’t require specialized equipment requires domain knowledge and is an easy task to manage and send out of the house.
With every potential business solution, there are critical criteria that must be carefully considered to make the outsourcing experience as successful as possible. These include, but are not limited to:
Limits to Technology: Remote teams may experience delay due to slower networks or tools. Before engaging a service provider, clients need to be sure that they will be able to accommodate their technology needs and keep abreast of the latest trends.