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A question every direct marketing enterprise faces is whether to use in-house or outsourced creative. There's little doubt the desire to reduce costs continues to fuel the issue, especially with technology expenses going through the roof.

Some companies I've worked with, such as PaperDirect and Day-Timers, invested heavily in technology and in large, highly talented creative teams. These investments paid off handsomely because the creatives worked on the copy and design of new and existing products and packaging as well as promotions.

The same individuals may not have designed both products and promotions, but much of the hardware, software and support they used were shared throughout the creative group. So one initial and obvious aspect of the in-house/outsource issue is the type and volume of the work you have now or anticipate.

Direct marketers selling non-proprietary technical products often can use art and copy supplied by their vendor manufacturers, along with the vendor co-op funds to help offset advertising costs. In this example, the marketer may have a lower volume of work. While it is unquestionably time-consuming to standardize the various styles and formats supplied by multiple vendors, there often is no product or packaging to design and fewer promotional pieces and pages to create and update.

Similarly, a DMer with fewer overall promotions and fewer new products to launch may find the investment required to assemble a highly trained staff and buy the necessary technology will take too long to pay back. Moreover, because technology changes rapidly, the hardware or software can become obsolete before the payback occurs.

“Producing and photographing catalogs increasingly demands significant, ongoing investment and continued training in rapidly changing technology,” says Chris Carrington, president of the agency Catalogs by Lorel.

“As an agency with the collective volume from all our clients, it's possible to stay ahead of the digital curve and allow our clients to take advantage of that expertise without having to invest in it themselves.”

Even companies with substantial creative resources and state-of-the-art technology sometimes use a combination of internal and external creative options. Unless a DMer is generating a huge number of promotions, new products, etc., the firm may decide to hire some external consultants, such as a photographer or copywriter, but choose to handle all the other creative functions internally.

Combined approaches are common and sometimes provide the best answer if you can manage the coordination required for multiple teams. Missed deadlines and missed opportunities will result if you don't formalize the coordination and communication between the internal and external creative teams. Handoffs have to be a standard part of the process to close the loop.

As we all know, a lot of creative work happens at the last minute, and when the handoff falls through the cracks (and one will slip through — count on it), the most valuable thing to take away from the bad experience may be an analysis of what failed and how to avoid it in the future.

One of the greatest byproducts of having outside creative partners as well as in-house services is the fallback position such an arrangement gives you when internal resources become too stretched or an opportunity (or problem) presents itself unexpectedly.

In fact, the issue of whether or not to outsource requires the marketer to go beyond ROI calculations to a bit of honest self-reflection. For example, if your company generates a tremendous number of author's alterations (AAs — revisions after the job has been submitted), typically in a short period of time and at the last minute, you may need either a totally outsourced solution or an outside partner. But no matter what you decide to do, this work pattern will be expensive to maintain.

Carrington says many DMers that “have transitioned from in-house to outsourced creative have indicated to us that it was very difficult for them to manage the process internally. They simply found it was too easy to keep revising their catalogs endlessly, which often led to missed deadlines and costly AAs. Having an outside company controlling the work flow was [helpful].” Of course, even with an outsourced solution, the ideal answer is to analyze the cause of the AAs and reduce them if possible. AAs represent risk because they must be made quickly and accurately.

For many marketers, reducing the time required to get new products to market is a critical competitive advantage. There's no doubt that having multiple creative options, in-house and outside, can speed an item to market. Some new products also generate high AAs, so a financial calculation should be made to determine if the cost of cutting the time to market for the offerings is worthwhile.

Carrington notes the “enhanced focus on production seems to have come about largely because of digital photography, remote proofing, and all the other ‘time savers’ that have allowed schedules to be compressed, and lets merchandising happen much closer to the edge.”

Whether you use an internal or external creative solution or a combination, you will reduce errors, time and cost if you bring everyone into the process from the beginning. You can't assume the in-house creative department automatically knows what marketing and merchandising are up to simply because they work at the same company. Internal creative teams must be included in planning meetings, just as outside agencies are.

Some of the most heated debates about outsourcing center around the concept of “insider knowledge.” Without a doubt, the in-house creative team that's worked with the same company and products for decades has gained invaluable experience and an intuitive feeling for the brand. Unfortunately, this knowledge sometimes becomes second nature and the internal “keeper of the brand” may find it difficult to convey it to outsiders.

Also, the production process can become so consuming that branding can get overlooked. Carrington says many of her customers are concerned that they're working in a vacuum and that they've become so production-focused that process is driving the ultimate creative output.

Another disadvantage to becoming too immersed in a product set or brand image is that it can become especially difficult to start up a venture or address a new market.

I once tested a promotion that was designed by my internal creative group and targeted to an untried market. The results were lukewarm.

I took copies of the promotion back to the customer advisory board members who had recommended we test the market. Their answer was immediate: The promotion looked like other campaigns we generated. We didn't realize we'd missed a chance to speak to this market's special needs. I commissioned an outside agency to develop a test promotion, and it worked better. The outside agency had more experience in the new market and was able to be more objective than we were.

For many DMers, the answer will be some kind of combined effort, one which should be carefully monitored because it can produce hidden costs. However, when properly managed, it also can deliver exceptionally good results and help reduce risk.

Evaluating the best strategy for your company must be done regularly. After all, companies are apt to change how they do business, as well as channels, products, markets and vendors, whenever they like.

Remember: The decision is not only about how to cut costs. Rather it's one that takes into account core competencies, what your company does best, and how to improve sales.

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Mary Ann Kleinfelter (makleinfelter@aol.com) is a consultant with Marketing Solutions Today in Milford, NH.

Here's some points to consider when deciding whether in-house or outsourced creative is best for your company.

• Quantity

  Do you offer many new products and roll out lots of campaigns to promote them?

• Timing

  Is seasonality a factor? Is there value in reducing your time to market?

• Communication

  Do you target multiple audiences? How do you contact them?

• Your creative work

  Does it require many revisions after the job has been submitted?

• Your products

  Are they technical and/or high quality?

• Finances

  How willing and able are you to invest in staffing as well as Technology (including upgrades and tech support)?