The impact of COVID-19 on the SME marketing structure has certainly been unprecedented in 2020.

The current global pandemic has seen the need for businesses to majorly reduce their business costs including rent and utilities (39.9%) people (21.7%) operations (17.5%) marketing and advertising (15.4%) and R&D (5.6%). Business leaders, now more than ever, are under increased scrutiny to ensure that each investment they pursue is cost effective, whilst attempting to weigh up the risks of ‘knee-jerk’ cost cutting on their long-term deliverables. Marketing is no exception in these cost cuts.


In a recent study by ask Marketing surveying over 100 Australian SME CEOs, it was found that 30% of Australian SME CEOs and Business Leaders surveyed have had to shut down their marketing altogether, because they believed they couldn’t afford it anymore. The economic downturn has resulted in a stronger need for organisations to rethink their marketing strategies and the traditional ways in which they have operated. Previously, marketing functions were one of three structures - freelance, agency or in-house. However, as the world has moved towards virtual partnerships in recent times, there is a strong push for Marketing Managers to be more accessible virtually.

The ‘Next Generation Marketing’ white paper that we recently released discusses this, as well as the rise in Virtual Marketing Managers (VMM) in accommodating this shift in SME marketing structures. Business leaders today are being forced to rethink their marketing structures, strategies and budgets in order to stay agile and are looking to utilise alternative options. 


The starting point

So where do business leaders begin when adjusting their marketing structures to accommodate this shift? There are a number of ways to structure a marketing department to best suit a business, with many factors to take into consideration. Most importantly, all businesses need a marketing strategy first. In conjunction with the organisational goals and needs of the senior leadership team, the marketing strategy needs to be composed by a marketer with experience in managing  teams, projects and tactical activities across multiple channels. 

Once the strategy is complete, the expert(s) to execute the tactics come second. In the current climate and complexity of today’s digital marketing landscape, a wide range of experience and skill sets are needed to successfully implement and execute a campaign. Marketing's 41+ specialty areas (which continues to exponentially grow) make it difficult for a single person to be proficient across all. This means that a number of expert marketers are usually needed to deliver on diverse and complete marketing strategies across all traditional structures and consequently drives the need for a larger budget. 

There's no 'one size fits all'

So which is the right structure for your organisation, and how can ensure you are maximising your return on investment when choosing your structure? Of the three traditional structures, there are undoubtedly pros and cons to every option. There is not, nor will there ever be a one size fits all option. For larger organisations, an in-house marketing team is generally opted for, as they typically have larger budgets, needs and resources. The in-house structure comprises a team of individuals who specialise on a particular component of marketing, with salaries per individual based on expertise ranging from $45,000 - $310,000 per team member, annually (Pay Scale and Seek, 2019). Interestingly, in the ask Marketing survey of 100 Australian SME CEOs and business leaders, 47% of businesses who were operating under this approach, said they are now looking for an outsourced option of marketing post COVID-19, wishing to operate a leaner business.

The second approach is the Agency Model. This model is particularly effective if the business strategy identifies a particular area of marketing which requires a highly specialised skill set or who do not have any internal scope to deliver on marketing objectives. However, a study by BedFord Group Consulting has highlighted some of the limitations of the agency model, including no development of internal capabilities, risk of limited innovation, cost and frequent turnover of account management staff. 

The third traditional approach falls under the hiring of freelance marketers, another  marketing structure commonly implemented by businesses in the new stage of development as it is often a financially viable solution, with remote, contract-based working conditions and no employee obligations. 

A new age, hybrid approach:  Virtual Marketing Management

Aside from the traditional marketing structures mentioned above, there has been an increase in a new approach for marketing management. A Virtual Marketing Manager (VMM) model sits between the 100% outsourced and 100% in-house marketing models; a new hybrid model. The VMM structure is not about being completely outsourced, nor completely in-house. A lot of SMEs are not ready to invest in in-house teams, whether because of capital restraints, lack of understanding of the marketing function, or other reasons. A VMM allows these businesses to dip their toes into marketing and build a function that is more agile and cost-effective than the in-house alternative.

Within the current climate and the shift in workplaces and employees switching to remote working, a VMM is the new hybrid approach born for the current marketing environment and new world in which we operate in. Traditional marketing structures face a number of communication and relationship management issues that a Virtual Manager seeks to solve. Without effective leadership between the marketing team (in-house or outsourced) and the senior decision-makers, businesses often suffer. This in turn creates a ‘missing link’, occurring when a business does not have a senior marketing lead adjoining the leadership team with those executing the marketing day-to-day.

Such issues that arise include the marketing function becoming siloed, challenges with resourcing, a lack of centralisation, strategy and leadership, business dependencies on outsourced solutions, lack of internal capabilities and a lack of genuine brand buy-in (Deloitte, 2020). The gap between client expectation and reality is evident when it  comes to service issues, with 70% of customers expecting all account managers to have the same information about them, but 64% say that they have to re-explain issues. A Virtual Marketing Manager closes the gap between this expectation and reality by acting as an extension of an existing business. VMM’s provide high-level and agile marketing strategies, guidance and technology for a fraction of the cost of in-house structures and full-time marketing resources of the same seniority. A VMM’s guidance enables the business to have senior marketing management alongside someone internally, helping to enhance and develop the skills of the internal team. 

Is it time to shift?

Whilst there may not be a one size fits all approach, the post COVID-19 world in which we live in has forced a shift in structure of many SME marketing functions. With new alternatives now on the table, there may be an opportunity to substitute out traditional marketing structures to better suit an organisation. Business leaders need to employ the correct marketing strategies and structures for their organisations to stay agile and adapt with these unprecedented times. With pressure higher than ever on business leaders to execute on their deliverables is it time for a shift in your organisation's marketing structure? 

References

ask Marketing, Next Generation Marketing, 2020, https://uploads-ssl.webflow.com/5ad08cb60e97b8733b0194f3/5f13cc415a496b6fef778d24_askMarketing-Next%20Generation%20Marketing%20-%20Final.pdf

The Bedford Group, 2020, 'Annual CMO Study’, https://bedfordgroupconsulting.com/marketinginsights/agency-relationship-sustainability/

Deloitte Digital and Salesforce Webinar, Changing consumer, digital marketing and impact of COVID-19, https://www2.deloitte.com/si/en/pages/strategy-operations/articles/changing-consumer-digital-marketing-impact-Covid-19.html 

Pay Scale, 2020, https://www.payscale.com

Celia Reid

Celia specialises in analysing business research and industry trends to drive business performance in the most efficient way.