Creative Process Outsourcing (CPO)

Creative Economy, Benefits, Challenges, and more.

When we refer to creative process outsourcing, we discuss 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.

Put merely, 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 vary 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 to complement in-house marketing teams.

Creative support can include:

Brief History of CPO

Since the Industrial Revolution, companies have competed continuously for markets and profits to gain an advantage. During much of the 20th century, most large corporations integrated into managing their assets in house. In the 1950s and 1960s, the call came to diversify. This expansion required a broader management structure, which became a hampering factor in the 1970s and 1980s. Many large companies began to focus on their core business and identified the processes that can be outsourced.

Creative process outsourcing was born due to 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 1990s, organizations outsourced those functions which they were not able to fulfill internally adequately. Later on, this evolved to focusing on cost-saving measures. It would benefit the company to outsource functions related to the enterprise's running 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 alliances, they could improve their results, regardless of whether they outsourced their core or commodity functions.

Since the Great Recession of the late 2000s, however, there seemed to have been a temporary shift from outsourcing and back to in-sourcing. However, in recent years there has been a swing back to an increase in outsourcing consumption due to the COVID-19 pandemic, with 70% of Deloitte’s 2020 Survey respondents citing cost reduction as their main motivation, 40% citing flexibility. These traits seem to be essential for business survival during these difficult times, and outsourcing has proven to be a powerful tool.

This trend is expected to grow concerning critical parameters such as locations, services, and functions.

Why Choose a CPO?

As stated in the Deloitte 2020 report, in the modern startup ecosystem, people are looking for vendor management that is tech-savvy and knows how to manage internal stakeholders. Not only does this free up human resources to focus on core business aspects, but it also saves a lot of money that companies are investing in creative ways to help grow spark further growth.

As you can see, going with a CPO allows more funds to be diverted toward technology and business process improvement, and even talent development.

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.

Making an Impact

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 determines 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:

• Offline communication - meeting the customer in the physical space, and making an impact through direct interaction, from product packaging to in-person meetings
• Online communication - meeting the potential customer in the digital realm and fighting for brand awareness in the global competition arena

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.

Offline communication – The need for visual differentiation

The need for visual differentiation

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 a vital 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.

Online Communication – The need for content marketing

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 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, and increases 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 in creating an effective content marketing campaign is keeping pace with the need to produce new content for the existing and emerging channels regularly. Around 30% of the content demand B2B is generated by IT , and comprehensive eBooks far outpace any other content type in terms of popularity in this industry.

The Creative Economy – Online and Offline assets

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:

• The leaps towards digital – people are now more connected than ever, and a tremendous amount of communication is done via the internet. To be seen in the digital space means to address potential customers at times and in contexts when they are most perceptive, and to do this better than the competition
• The global competition environment – most businesses are not ‘local’ anymore. Global services or consumer goods corporations can be present in any market they choose to enter. Developing countries will soon rival developed markets by spending power.

In this context, companies choose to be present in markets worldwide, entering direct competition with similar businesses. The direct visual impact is key to a product’s success, whether we speak about a car or a soap bar.

Both these factors have determined the birth of a particular kind of economy – the creative economy. The creative economy comprises 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 of their audiences' minds 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 upfront and close, as there is significantly more competition in developed markets.

The creative development services market, as it continues to grow and develop, could disrupt multiple levels. Production innovations, such as 3D printing, are increasingly a reality 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 are 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. Pew Research reports that around 64% of adults used the internet occasionally from 2017 to 2018, an increase of 14% from two years prior, while in highly developed economies, that number only went from 86% to 87% from 2015 to 2018.

Creative content is delivered without cost impediments like reproduction and distribution with digital tools and platforms. Technology continually improves, and content is 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 as part of the creative economy

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.

Examples include:

• Design and production agencies
  • Studios
  • Idea Generators
  • Software Development Firms
• Marketing firms
  • Public Relations Agencies
  • Advertising Agencies
  • Branding Agencies

According to a recent study by Content Marketing Institute , the B2B industry has been championing content creation as one of the main forms of marketing, with 69% of the most successful B2B marketing execs stating that they have a clear and documented content strategy, and 41% of all respondents.

The top performers in the industry are showing more faith in content marketing than ever, 84% of them calling their ability to deliver clear ROI “excellent” or “very good.” That is possible because 95% of the track content performance through various metrics, and 83% have well-defined KPIs to measure their initiatives.

We don’t have to look at just the top performers to see a trend – across the board, 63% of all respondents stated that their content marketing strategy helped them build customer loyalty, and 53% stated that it led to a direct and measurable increase in revenue and sales.

Q: What Content Marketing activities do you most often outsource, and what is the payoff?

An overwhelming majority of B2B content marketers outsourced the process of content creation itself during 2020. Yet, well over 70% of them have used this content to successfully generate demand, build trust, educate their audience, and build brand awareness.

The demand for visual

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 HubSpot, the video has overtaken all other content marketing firms in 2020, with promotional videos and those used to build a story around a brand is most popular. Infographics fell just short of blogs and eBooks but are still an essential content type.

Figure 1: The Importance of Visuals

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.

Figure 2: Shifting Importance in the Future

According to WyzOwl's survey, 86% of customers ask for more video content from their favorite brands, and over 80% of marketers claimed that video directly increased their website traffic and sales.

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 education environments, from early education to industrial processes training.
Following the steep development curve in visual technology, we can assume that ‘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 will rise exponentially. From historical reenactments in school to enhanced training programs in the industry, all communication forms are profoundly interactive. The need is not just online but also for offline assets and content.

The Outsourcing Trend

As we’ve seen in the 2020 Content Marketing Institute Survey, over 80% of B2B marketers outsource at least some part of content creation. Meanwhile, 71% of B2B technology marketers used videos, and 67% used infographics, which were also heavily outsourced. Interestingly, an astonishing 95% use social media posts.

According to Clutch's industry surveys, in 2019, while only 37% of SMBs outsourced in 2018, that number climbed to 52% in 2019. Over a third of the companies surveyed outsourced digital marketing during that time, with 37% outsourcing more technical IT and accounting work.

Considering the 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 prices compared to the expenses involved in outsourcing the same tasks. Time-consuming activities outsourced to providers, on average, have lower rates and make financial sense. Of course, quality must also remain equivalent to or better than what can is produced in-house.

Q: What is the cost comparison between an in-house team and comparable external agencies?

According to Payscale , an average copywriter in New York will have a median yearly salary of $62.000. In contrast, a high caliber writer with good English skills and several years of experience from Mumbai will have a median salary of just over $6500. It is a simple matter of scale, with companies able to save as much as ten times when outsourcing their content marketing workload.

Q: What is your hourly rate for the following services?

The average salary for content management, copywriting, and writing all hover just above 300k rupees, roughly $4000, while accounting jobs hover around 250k rupees, approximately $3400, with hourly rates of $2–$12 and $6–$10 respectively.

Benefits of outsourcing the creative process

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 hectic times.

Top benefits include:

• Having more available hours to complete a project
• Being able to keep the clock running on the project by having workers located overseas

These factors can greatly reduce production timelines.

Q: Are you able to use flexible staffing options such as freelancers and temporary/contract workers during periods of peak demand

Q: What are the BENEFITS of working with your offshore/offsite partner?

From an overall business perspective, outsourcing’s benefits also include:

• Right-sizing: respond with agility to calls to ramp up or wind down without having to hire or fire staff
• Access to innovative tools and technology: working with a specialist who invests in cutting edge tools means that your team benefits from that access without paying for it through risk.
• Efficiency: bringing in outside specialists means that the work gets completed faster and using less staff time. That staff time can be redirected to the strategic development of work in the pipeline.

From a client perspective:

The pros and cons of creative process outsourcing can be interwoven. Depending on how certain factors are approached, they can either be advantageous or disadvantage to the company in the outsourcing process.

Some of these factors would include the following:

The Human Factor

CPO’s offer creative agency access to a team of creative professionals who are well-trained in cultural particularities and can quickly understand and interpret the client’s brief. This access to creative skills and talent is a definite advantage. However, it needs to be balanced by a reliable 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 essential for creative process outsourcing. However, the effective use of the software is dependent on the human factor. 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 effectively utilized, impacting productivity.

The Location Factor

By using a CPO, a company can 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 because 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 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 certain outsourcing 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 CPO firm's infrastructural support. 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 to 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 the 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.

Market Size and Future of CPO

The global market size of outsourced services has grown steadily between the years 2010 and 2019, according to the figures published by Statista . Global revenue from the outsourcing industry amounted to $66.5 billion in the IT sector and $26 billion in business process outsourcing at the end of 2019.

Although IT outsourcing has varied, often dropping and then rising by over $10 billion year to year, the BPO market stayed in that $24–25 billion range for the last five years.

As opposed to other branches of outsourcing such as BPO or KPO, Creative Process Outsourcing is more recent and is expanding alongside rapidly developing technology.

According to Deloitte's Global Outsourcing Survey of 2020 , the market for outsourced services is expected to continue to adapt rapidly, not only meeting the needs of the client but also, in many instances anticipating the client’s needs. Surveyed businesses across the board have reported a 30% year-over-year productivity increase with a combination of offshoring and automation.

As we advance, the future of CPO, along with the rest of the outsourcing industry, seems set to continue rapidly adapting its technologies and processes 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.

Industries that benefit from CPO

• Real Estate - CPO can streamline the digital content production for high turnover real estate agencies. Professional CPO teams easily handle operations such as image-stitching, 360° panorama, color profile correction, image enhancement, day-to-dusk conversions, watermarks or annotations, 2D and 3D floor plan conversions through efficient workflows such as batch processing.
• Gaming industry - The gaming industry has (virtually) exploded. With the increased demand for augmented reality, virtual reality, and animation content, the gaming industry can opt to outsource parts of the creative process while leading the business's strategic functions.
• Engineering - Immersive experiences are not demanded only by end customers. High technical industries such as oil and gas, construction, infrastructure, and so on are increasingly using digital content in their training process. Interactive 3D models are not uncommon, while augmented reality is taking the stage in innovative learning.
• E-commerce - A picture isn’t worth a thousand words anymore. Video presentations and 360 models are the norms in e-commerce. Leading e-commerce websites with thousands of products for sale rely on CPO companies for their digital content needs. One of the most common features asked for is ‘color conversion’ – adapting the digital asset to allow color changes based on user demand.
• Publishing and Printing - Companies in the publishing and printing industry, the DTP department is usually one of the busiest teams; CPO can lift the burden of hiring additional employees whenever there’s a need to keep up with large volumes of work. The publishing industry has succeeded in outsourcing a significant part of its processes, such as magazine design, layout, and text formatting. This may be for use either online or offline.
• Consulting - Consulting companies generate a wealth of content that needs to be presented in a compelling and captivating way, both online and offline. Outsourcing report design and dynamic presentations to CPO companies ensure the consultants focus on what they do best.
• Creative Agencies - Creative agencies such as those involved in advertising and branding usually hold creative control in-house. They can make use of outsourcing for the execution of their ideas, looking to CPO companies to produce both their offline and online innovative products.
• Consumer Goods - As the designing of packaging is not part of the core function of the company; most companies are probably already partnering with a packaging company. However, just as in digital content, packaging needs to keep a quick pace with the world around. Using promotional packaging or other types of temporary packaging features can lead to more effective market positioning. Outsourcing the design work with CPO companies ensures these needs are met more efficiently.

Challenges in the Creative Services Industry

• In the Content Marketing Institute Survey, 46% of respondents identified the distribution of content as a challenge and something that needed to be improved upon in the upcoming year.
• Another 44% of respondents of the same survey noted a need for more precise content marketing measurements to more accurately track results.
• Almost a third, some 32% of respondents found that a better understanding of the audience was needed to get better results, and 31% thought that they needed to capture better data from their audiences and segment it before they could get a better understanding of their needs and preferences.
• Since video marketing has been booming, with 46% of first-time video marketers popping up in 2019, according to WyzOwl , the main challenge that an astonishing 92% of video marketers agree on is the surge in competition and high level of noise within the past year.

Q: What are the biggest challenges when creating effective Visual Marketing?

Apart from the increased competition mentioned above, the main challenge is the focus on a limited number of promotional channels that are oversaturated.

Most marketers are focused on social media platforms. When you add that almost half of the competition has only been working with video for the past year, it’s easy to see that there’s too much content being pushed out the doors and too little actual expertise and craft put into it.

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 workers' development of strategic and ideation ability.

Q: What are the main barriers for those new to the game to adopt video marketing?

Of those companies that haven’t yet adopted video marketing, 20% feel that it is too expensive, 17% lack the skills to execute it properly, and 13% don’t have enough time to invest in training and execution.

As the demand for more sophisticated visual and interactive content increases, it is highly expected that content production gets outsourced. Content like YouTube videos and even virtual reality or augmented reality is time-consuming and resource-demanding to produce in-house. External service providing companies may prove to be an efficient solution for both online and offline creative process needs

Most Outsourced Creative Services

The services that are most likely to be outsourced vary depending on the business model and their in-house agency’s expertise.

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.

Most Outsourced Marketing Activities

Most popular/widely offered creative services

Q: Which best describes the resources used to create content

Q: Are you able to use flexible staffing options such as freelancers and temporary/contract workers during periods of peak demand?

Q: What are your freelancer/temp spending plans for 2020?

Successful outsourcing criteria

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 a delay due to slower networks or tools. Before engaging a service provider, clients need to be sure that they will accommodate their technology needs and keep abreast of the latest trends.
• Process documentation: This is less a drawback and more an essential resource to cultivate before outsourcing. Efficient and precise processes must be engineered, documented, and adhered to for effective and efficient remote work. It is challenging to be perfect. With more project management roles and systems in place, process documentation and adherence will improve, and mature outsourcing companies will have exceptional knowledge of best practices and project management.
• Time Zones: Working across time zones can be both beneficial and distracting. Depending on processes established for communication and delivery of work, time zones can either shorten or lengthen the production schedule. With efficient project management, having workers in different time zones can result in round-the-clock productivity and responsiveness as working hours ‘follow-the-sun’ unceasingly.
• Culture and Country Differences: It can be challenging to translate culturally specific creative work to an outsourcer who has no shared context to translate the creative brief. However, if the clarity of the idea is well-developed in-house, then creative outsourcing is more related to production and adaptation across platforms.
• Communication: Creative departments regularly note that this is the biggest challenge to working according to the highest standard. Outsourcing partners need to prioritize efficient communication concerning their personnel as well as their technology.
• Brand Knowledge: It can be difficult to expect an outside creative firm to understand the nuances and complexities of your brand, having not spent time developing or growing it in the market. Translating your brand specificity and story can be difficult.
• Attention to Detail: Making sure that work is produced of the highest caliber means that more in-house effort for management and review of work produced off-site is essential.

Q: What are the DRAWBACKS of working with your offshore/offsite partner?

BackOffice Pro – The back-office team for business processes

BackOffice Pro serves as the back-office partner for global organizations when it comes to supporting business requirements relating to CPO. We evaluate the clients’ requirements thoroughly and form a strategy to provide the back-office support with our flexible full-time equivalent (FTE) model. With vast experience in CPO, we enable a reduced cost in the outsourced business processes while amplifying productivity. Contact us to know more about what we can do for you and the outsourcing model at BackOffice Pro.