Report: Aussie SMEs shutting down or outsourcing marketing due to cost

Nearly half of Australian SMEs are looking to remove in-house marketing roles as a cost-reduction strategy and nearly one-third have shut down marketing all together, a new survey claims.

The latest startling results from ask Marketing came from a survey of 100 Australian SME business founders, owners and leaders across industries in June focused on the impact of COVID-19 on company working arrangements.  From this, 47 per cent of SMEs were found to be looking to remove current in-house marketing roles and instead opt for outsourced alternatives, which are seen as more cost-effective.

In addition, 30 per cent said they’d shut down marketing activity altogether as a result of the recession caused by the COVID-19 pandemic and because they believed they couldn’t afford it anymore. The survey found 15.4 per cent had reduced marketing and advertising since March 2020.

What’s more, 13 per cent of CEOs and business leaders said they’d reverted from the traditional marketing agency model since the global pandemic began. Reasons included saving costs, and having greater transparency and autonomy of marketing spent. Just over half (55 per cent) said they plan to continue this leaner approach moving forward.  

As for the most important factors to the marketing function, SMEs surveyed cited being results-focused, cost-effective and integrated with systems and operations as their top three. The least important component to business marketing functions was “agile”.

“The pandemic has seen many organisations, particularly small businesses, reflect and question their marketing spend and consider where they can realistically cut costs without having a detrimental impact on their organisation’s ability to promote their products and services strategically whilst growing their brand,” ask Marketing co-founder, Alexandra King, commented.

The research is part of a larger effort by ask Marketing to understand the appetite for its own ‘virtual marketing manager’ offering, which combines a lower-level in-house marketing resource with more strategic expertise from the agency. And according to ask Marketing, there is such an appetite, with 85 per cent of respondents saying they believe their businesses could benefit from this hybrid kind of approach.

According to CMO’s recent State of the CMO 2020 research, the top marketing functions being run in-house by at least 70 per cent of the Australian businesses surveyed include marketing strategy, email marketing, social media management, data and analytics, content production and creative and media production.

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