Are You All-in for In-house Marketing? Beware of the Hidden Costs!

by: Mark DeBellis, President, PSB Integrated Marketing

Over the last few years as a result of the economic crisis, we have seen an ever-increasing focus on reducing marketing department costs. Historically, marketing is one of the first departments hit during a budget squeeze. It’s always surprised me because just when a company needs more momentum, senior management takes away resources. Imagine doing this while fighting a war, or running a race. Doing better by reducing support?

Everyone likely agrees that marketing costs should be managed carefully. And all marketing expenses should be evaluated via a return on investment.

The traditional simple marketing return on investment looks at cost of the marketing project divided into the total profit or sales generated from the initiative. Pretty straight forward…you spend $10 and receive $100 in incremental profit from your promotion. With results like these above you would call this a wise investment and continue to invest.

There is another subtle cost that we see entering the mix that has a huge downside… but it is not showing up in any calculation.  Or probably not discussed in any meetings.

That is opportunity cost.

With the decreasing staff sizes in the Marketing departments and an increasing do-it-yourself mindset, we have seen many of our clients struggling to manage the entire marketing process in-house. In previous times Marketing would plan, budget, create product strategies and then manage the marketing mix.

Today Marketing Departments are being redefined to contain all of the above, plus they now must design the creative content for campaigns, write copy and coordinate project fulfillment with end suppliers and much more.  With fewer people! The workload of this department has grown, fractionating their focus and allowing precious little time for strategic management.

One might think that saving some money by doing it oneself is a good thing. And in some cases it might be. Unfortunately it’s been our experience that many in-house departments become overwhelmed with not only their key priorities, but also a growing list of non-critical projects that land on their “to-do” list (the little nuisance projects for the in-house designer). These can get in the way of the critical marketing priorities – those that build sales and market share.

Projects can be slower to market and response time can be compromised. This is where these unseen consequences are uncovered. In the increased time it takes to respond to opportunities, these sales are forever gone. The person looking for your product has gone on to another supplier. Out of sight out of mind.

As we move towards budget season, senior management should assess the in-house marketing efforts to make sure that they are not hindered by lack of outside resources or inadequate budgets. Remember, success in business is measured by the results obtained, not the efforts expended. Having an in-house department is only effective if it has a budget that allows the department to execute and exercise your company’s voice in the marketplace. Providing appropriate budget support and receiving the help of outside professional partners will help your marketing efforts generate a favorable return.

Mark DeBellis has spent over half of his life in the Marketing profession and in the promotion and management of consumer brands and services. He seeks new ways to provide value-added services and product marketing strategies for PSB’s financial service clients. As a full-service provider, PSB Integrated Marketing offers creative concepts, graphic design and layout, in-house prepress, and on-site lithographic/digital printing, bindery in addition to secured mail house services in their Orange County, CA facility. Mark DeBellis is President of PSB Integrated Marketing and can be reached at markd@psbonline.com; www.psbonline.com.