Survey Report commissioned by Lemon Digital reveals why agencies outsource and how it benefits agency business

Agencies have an ever-increasing need for and reliance on outsourced digital production services, according to a survey published today by E-consultancy.

The vast majority of agencies are already outsourcing digital work and around two-fifths (42%) of agencies said that the primary reason for this was because it is the “most cost-effective way to manage fluctuations in work stream”.

Matthew O’Riordan, founder of Lemon Digital Production who commissioned the research, said: "Without any existing research available to us on digital outsourcing by UK agencies, the research results have been enlightening for us as a digital production house. More than 90% of UK agencies already outsource digital work and are comfortable using outsourcing as both a tactical and long-term solution for digital delivery.

“We believe that agencies will see digital outsourcing evolving in much the same way as more mature channels such as TV advertising where outsourcing to specialist video production and post-production houses is standard.”

The report highlights cost discrepancies between outsourcing within the UK versus offshore outsourcing, with offshore offering significantly lower rates. O’Riordan believes that with offshore digital agencies only accounting for 35% of outsourced work, being in the same time zone and speaking the same language is paramount for many agencies.

Agency respondents took part in an online survey in September 2008. Information about the research, which focused on outsourcing for digital agencies based in the UK, was emailed to a select group of agencies. The incentive for taking part was a complimentary, advance copy of the full report.

Other highlights of the report include:

• A fifth of agencies (20%) report that “internal capacity issues” were the main driver for outsourcing. A “lack of specific skills in-house” was cited by 16% of survey respondents as the main catalyst for outsourcing.

• Technical work is the area that is most likely to be outsourced, as indicated by 35% of responding agencies. Creative, search engine marketing and user experience work are outsourced by 18%, 14% and 11% of agencies respectively.

• A range of production skills are required for outsourced work. A coherent understanding of Flash is top of the list of requirements. Flash Design & Build is a skill required by 16% of responding agencies while ActionScript programming is required by a further 12%.

• Microsoft .NET programming is a requirement for 12%, while skills in HTML, CSS and AJAX development were mentioned by 11% of respondents.

• In terms of services outsourced by agencies, content management systems (14%), video production (14%) and search marketing (10%) are at the top of the list. E-commerce systems, games and video post-production were cited by 9% of agencies as services they outsource.

• A quarter of respondents indicate that outsourced work is undertaken by freelancers located on-site. The same proportion report that work in undertaken by freelancers at an off-site location.

• Reliability was cited as the most important criterion when choosing an outsourcing partner, as reported by 53% of respondents, followed by quality (37%) and cost (10%).

On the subject of white-labelling O’Riordan added: “From our experience of being primarily white-labelled, we find that this can be both beneficial and detrimental to agencies. Typically, the benefits are only realised when projects are running smoothly.

“Agencies that recognise the role of digital outsourcing as a service much like pre-print art working or video post production, are able to be more transparent with their clients, take credit when due, yet are still able to handle difficult situations constructively due to the open nature of the relationship.”

Report URL

http://www.e-consultancy.com/publications/digital-outsourcing-survey-report

Journalists

Journalists and bloggers can email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.

Linus Gregoriadis, Head of Research, E-consultancy
(e: linus AT E-consultancy.com t: 0207 681 4051)

Lemon Digital Media Contacts

For further information, you can also contact:
Sarah Evison, Production Director, +44 (0)20 76814083 or msarah@lemondigital.com.
Steph Smith, PR Consultant 07803 853006, mstephsmith00@googlemail.com

About Lemon

Lemon is UK’s leading digital production house providing production services to creative, marketing and digital agencies as well as media owners.

Since 2003, Lemon has built itself upon the flexibility of its unique hybrid onsite and offsite resourcing model to provide high profile agencies and media owners with digital support across a wide spectrum of projects from high volume fast turnaround production of global marketing assets to the highly- specialised technical development of large CMS web builds.

The UK-based team of experienced digital producers manages the delivery and quality of each and every job, ensuring reliability and quality is maintained and freeing agency teams to concentrate on what they do best - strategy, big-ideas and growing client revenues. Lemon’s combination of in-house and offsite production teams ensure they can cope with the many challenges agencies present to them: rapid scale in production capability, technical wizardry and creative brilliance. . .

Lemon is currently working with many of the leading UK agencies providing creative and technical production services and as such they’ve been behind high profile projects including award winners. Unfortunately, they aren’t able to publicly take the credit for this work because they’re often bound by NDAs. If you’d like to see some of the great work Lemon does, please get in touch. For more information please visit Lemon’s website at www.lemondigital.com or get in touch with Sarah Evison on +44 (0)20 76814083 or sarah@lemondigital.com.

www.lemondigital.com

About E-consultancy

E-consultancy is the leading source of independent advice and insight on digital marketing and ecommerce.

Our reports, events, online resources and training programmes help a community of over 75,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

E-consultancy is an award-winning online publisher of reports covering best practice, user experience benchmarking, market data and supplier selection aimed at internet professionals that want practical advice on all aspects of e-business.

The E-consultancy site now attracts 175,000 unique users per month where they access research, read the blog and take part in discussions in the forums. And as a portal to the digital marketing community, E-consultancy members can also link up with other members and digital suppliers through our directories, as well as find a new job or new digital talent using the job listings.

Join E-consultancy today to learn what’s happening in digital marketing - and what works.

Call us to find out more on +44 (0)20 7681 4052 or contact us online.
http://www.e-consultancy.com/about/

Other recent E-consultancy reports:
http://www.e-consultancy.com/research/

Published on: 12:00AM on 2nd December 2008