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February 6, 2007

Marketing services: explosive growth in UK outsourced marketing

The UK market for outsourced marketing services grew by an impressive 34% in 2005/06 to GBP164 million. However, marketing service providers (MSPs) need to beware. A survey of marketing decision makers within UK enterprises reveals that they are becoming less loyal to their marketing service provider, while 'failure to be proactive' is their most common complaint with MSPs.

By CBR Staff Writer

The UK outsourcing marketing services market showed impressive growth in 2005/06.

An MSP combines a range of services spanning marketing technology (applications and databases, for example), data provision and analysis and a range of fulfillment services (online and post/call center). This is a well established market in the US, and the UK market is showing signs of considerable adoption.

Growth at this pace is rarely seen in outsourcing markets and research indicates that it is not slowing down. Growing use of MSP services is, in part, explained by a growing field of competitors offering a broad range of different services to clients, including online fulfillment of campaigns.

Cost is not the key in decision to outsource

Cost is not the only factor driving firms to outsource. A Datamonitor survey of end-user MSP priorities showed that access to analytical skills and marketing technologies not available in-house were the two primary motivators to adopting an MSP’s service. Reduced cost, typically cited as the key reason for outsourcing, came in third, suggesting that customer marketing is increasingly focused on the value of high-quality data and relationships over pure cost.

Broad range of competencies for buyers to choose from

Datamonitor surveyed many of the leading MSPs that offer services in the UK market, creating a matrix assessing their abilities in different areas, including analysis, data hygiene (or quality) and online/digital services.

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The report shows that provider selection depends heavily on the individual requirements of buyers and that careful internal investigation of marketing needs should be undertaken.

Understanding the needs of your organization is key to selecting the right marketing approach. Some will have considerable in-house resources to call upon, and may wish to use an MSP to augment its own capacity. Others may require a very specific campaign which is outside of their usual experience and requires specialist knowledge. Others may look toward an MSP to help with a strategic realignment of their marketing functions.

However your organization is currently resourced, selecting the right approach – and the right MSP – means assessing your marketing needs and matching them with the right resources and providers to execute effectively.

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