The ROI Case for Outsourcing Demand Generation Content

The gig economy sounds great, but is it really a fit for Corporate America? Marketing departments have been outsourcing for years to get specialized deliverables. But what about outsourcing the content that defines your message and relationship with your prospects and customers? Should that ever be outsourced?

Absolutely! Here’s why:

  1. It’s 4x less expensive! (Read on for the calculations.)
  2. It can produce a better product.
  3. Higher quality resources are now available to deliver on these promises.

How is Outsourcing Content Less Expensive?

To answer this, let’s first start by evaluating the cost of hiring a full-time demand generation content marketer.

How an In-House Marketer Spends Their Time

  • 50% in meetings – update meetings, strategy meetings, team meetings, etc.. And if they are junior level, they aren’t even participating, just absorbing.
  • 25% dealing with communications – reading and responding to all of the emails and IMs will quickly become a major part of their days (and nights).
  • 10% fulfilling systems and policies – submitting workflows, filling out forms or briefs to make sure the corporate gods are happy.
  • 10% be spent generating content – since this is why you hired them, this will typically be done in a rush or over many start/stop sessions resulting in poor quality.
  • 5% of time socializing – breaks, long lunches, office gossip, etc. Plus, it can be extremely damaging to the creative process when a peer pops their head into your cubicle.

The Result of In-House Content Creation

The result of spending your budget on that new hire is that you’re getting just 10% of the actual deliverables you hired this resource to create. And even then, poor quality is common. The focus is on getting a landing page live versus making it perform well.

When I work with companies on content, I often see landing pages where the intro paragraph from an asset is used as the landing page content. It makes no sense and does nothing to encourage a form fill. I see promo emails with the same content as the landing page, which is a terrible experience for the prospect. And the list goes on. In the rush to get the content out there, your in-house marketers are devaluing the assets you worked so hard to create and causing your content marketing efforts to underperform.

How Can a Contractor Do Better?

You’ll note that I said “contractor”. There is no question that you need to develop a long term relationship with a contractor who understands your product, brand and most importantly your target audience. You also want to look for a contractor who has experience working in a similar environment as yours and understands the complexity of your product. While this may sound like a difficult ask, more and more marketers are leaving corporate america to participate in the gig economy. And that means there is more talent than ever before available.

How a Contractor Spends Their Time

  • <5% of billable time communicating – this is with just one person on your team whose role is to disseminate information and manage the relationship. A 10 min weekly meeting and a few emails is usually sufficient to discuss deliverables and deadlines.
  • 20% of billable time learning your business – this is done by reading your content and talking with your experts as needed.
  • 75% of billable time is spent creating your content – that’s uninterrupted writing time. Yowza!

The Result of Contractor Content Creation

Contractors only work when they are fresh and focused on your project. They don’t have coworkers interrupting them mid thought. This means they can create excellent content at a very fast rate.

How fast? One of my biggest clients, an enterprise software company, told me they would be needing 20 hours/week of my time to fill a gap they had in their marketing department. I average 5 hours/week and have taken on more responsibility than they originally planned.

Additionally, if you are working with an experienced contractor, you’re likely getting higher quality content than you would from a junior marketing hire. You would be amazed at the time savings your in-house team can experience by having fewer content reviews and edits. The design team can also save time if the contractor is experienced in a design-first writing approach.

The ROI Calculation for Demand Generation Content

Let’s put some real numbers into the equation and calculate your costs.

The Real Cost of In-House Content Creation

Let’s assume that the in-house marketer that you’ve hired to write demand generation content makes $75,000 per year. With a minimal benefits overhead multiplier of 1.5, that means that resource costs the company $112,500 annually.  

If that resource works 40 hours a week for 49 weeks of the year (assuming vacation and holiday time of 3 weeks), and assuming they spend 10% of their time actually creating content, you get 196 hours of content creation during the year. That equates to an hourly rate of $574/hour.

Even if you did your best to shield this resource from unnecessary meetings and their content production rate tripled to 30%, you’d still be paying an hourly rate of $191/hour, which is significantly higher than the most experienced content contractors.

But even with that effort, there is still the cost of poor quality. How much revenue does your company miss when a landing page is poorly executed? Or an email campaign fails to deliver results? And what about the wasted resources in product marketing, design and demand generation to execute on that content? While not easy to quantify, missed revenue is a big cost that might equate to cuts in marketing spend and resources next fiscal year.

The Real Cost of Contractor Content Creation

In the content contracting world, it doesn’t matter if you hire a contractor at $75/hour or $175/hour, you’ll end up paying the exact same rate. Why? Because the more expensive resource is more skilled and therefore produces higher quality results faster. What takes a $175/hour contractor 1 hour, will likely take a $75/hour contractor 2-3 hours plus your time in requesting edits.

So, let’s take an example of a higher end resource as it will likely be less expensive in the time it takes you to manage the output. Assuming a $150/hour contractor is engaged, this resource will likely spend around 1 hour to read an asset, create a few emails and a landing page. This means you get demand generation content for $150/asset.

An Hourly Rate Comparison

Hours of Content In-House Content Costs Outsourced Content Costs
Demand Gen Content = 196 hrs annually 196 hr * $574/hr =  $112,504 196 hr * $150/hr = $29,400

Contracting Saves Money and Improves Revenue

Of course many readers will look to find error in my assumptions, and I’m sure there are. Each company and resource is different. However, it is hard to ignore the 4X differential in the cost savings of a contractor over using in-house resources. And this doesn’t even take into consideration the revenue opportunity in executing higher quality content that engages target buyers.

Perhaps that’s why the gig economy is growing so rapidly. It’s time that companies recognize this and figure out how to take advantage of this incredible opportunity to get more high quality content for less cost.

 

About the Author Trisha Winter

SaaS marketing executive turned consultant with Focused B2B. Helps B2B companies identify target buyers and create focused content to drive traffic and conversions. Expertise in B2B content marketing, account based marketing and product marketing.