The Resource
Rethink 2024
Written by CHIEF Studio
Released February 8, 2024
Introduction
It’s time for
a rethink
The Resource Rethink challenges the tradition of in-house marketing teams, advocating for savvy alternatives for B2B tech companies facing a funding crunch and troubled economy.
Today’s economic reality demands smart resource management, particularly for a growing software market. As salaries rise in response to economic pressures, the choices surrounding traditional full-time staff and a more flexible, fractional resource become increasingly significant. The Resource Rethink scrutinises the financial commitments tied to marketing roles while exploring alternative methods for outsourcing the marketing function in a B2B software business.
PART ONE
Will this be
the year of the
fractional CMO?
The ‘fractional’ resource is a concept that has bubbled away over recent years, usually forming a fractional C-suite role.
It’s easy enough to see the appeal. Fractional marketers offer the benefits of a contractor, freelancer, and agency wrapped in one package. They are all and none of them. They straddle the value of an in-house team while working in an outsourced expert capacity.
So where did the rise in ‘fractional’ resource come from, and why is it becoming so popular for B2B software companies?
Globalisation
The software industry has been quick off the mark to take advantage of a globalised world and adopt a 'work-from-anywhere' ethos. The requirement of office attendance has been a thing of the past, even before the pandemic. This has opened doors for more agile and fleeting experts to take on work within software businesses, such as fractional CMOs, COOs and CFOs.
Financial strain
Speaking of the year 2020, financial strain lingering from the pandemic, inflation, and other geopolitical disturbances continue to affect the bottom lines of software companies. This isn’t helped by many investors tightening their pursestrings, forcing start-ups with unicorn ambitions to strap their own boots.
Redundancy mayhem
It’s a great sadness that marketing departments are often the first on the chopping block in a downsizing exercise. It’s a team often seen as a very literal expense, and outsourcing is a way of reducing the overhead. However, the traditional methods of outsourced marketing are increasingly failing the software industry, where a new, highly technical dialect is required for understanding and unpacking value.
The marketing
resource options
in 2024
As freelance job boards thrive and gig workers are a hotly contested commodity, the need for something more specialised has arisen in the B2B software job market. Freelancers, agencies, gig workers, consultants, and in-house teams are all the typical suspects for servicing the demand for marketing in these companies. But who wears the role best and what’s the difference?
CONSULTANTS
When a company recognises a marketing problem but doesn’t need an in-house resource to crack it, consultants immediately emerge as a potential solution. While consultants do outstanding work finding the problem and proposing brilliant solutions, they often lack the experience and skills to fix the problem themselves. The first two steps towards achieving marketing goals are recognising a problem and finding the solution. Still, without the team and skillset to reach them, consultants can be an expensive half-solution to a company's broader marketing problems.
AGENCIES
When businesses think of agencies, they usually picture Don Draper walking into their boardroom and waxing lyrical about the art of cigarettes. In reality, while agencies have the technical skills to achieve your goals, they need a lot of briefing to ‘do the things’. Often, software companies needs more direction than an agency can give. Where consultants are all answers with no execution, agencies are all execution with, well, a lot of questions. This isn’t to say agencies can’t be helpful. Rather, they’re best used when there is a clear roadmap and brief in mind.
FREELANCERS
Freelancers have specific skill sets. They are your Liam Neesons of outsourcing who can create content, manage campaigns, handle social media, and do other projects (like find missing family members in the case of Liam). The key here is that freelancers typically sign on for a project rather than a long term campaign. Like an agency, freelancers can create everything a company needs to fuel their marketing plans but require just as much (if not more) of a brief.
GIG WORKERS
Through websites like Fiverr, Upwork, and 99designs, gig workers are affordable freelance alternatives that sign on for a part of a project or 'gig'. While usually affordable, gig workers are better bets for agencies looking for skill sets they lack, such as voice-over artists or specialised roles, rather than companies looking to solve their marketing woes. A copywriter on Fiverr, while likely skilled, will only sign on to work part-time with a client, often doing their gigs in a day or two before moving on to their next project.
IN-HOUSE MARKETING TEAMS
The last solution involves hiring an in-house team of full-time marketing experts. Companies get the resources and expertise they need in one team working solely for them. Many companies start with this route and then quickly realise that it's by far the most expensive option. The cost of running an in-house team is outlined in more detail below, and it is this cost that often drives new and experienced businesses to outsource their marketing teams.
PART TWO
100 software
companies
While it’s good to look at the different ways of outsourcing marketing, we wanted to look at how in-house teams are structured to paint a clearer picture of what software companies actually need.
We researched 100 B2B software companies to dissect their team structure and investment in full-time employed marketing resources. We considered trends in role types and answered a question that has us perplexed: Who’s running marketing?
The data
100 B2B technology companies were selected at random to analyse. The pool of companies selected from Crunchbase met the following criteria:
10-250 employees
Active and currently trading
Categorised as ‘Software’ and ‘B2B’
Headquartered in the United Kingdom
Data limitations: The headcount for these companies was taken from LinkedIn and may not include staff without a LinkedIn profile. LinkedIn’s company page data categorised marketing roles and may exclude hybrid roles that address multiple categories, such as business development or sales and marketing.
100 Companies
78.59
Average Headcount of companies researched
202
Marketing Roles Analysed
3.23%
Average size of marketing team relative to headcount
12
Average Age (in years) of Companies Analysed
The size of the
marketing team
21%
Had employed one person in the marketing function
25%
Had employed 2 people in the marketing function
15%
Had employed 3 people in the marketing function
7%
Had employed 4 people in the marketing function
22%
Had not resourced the marketing function at all
10%
Had employed 5 + people in the marketing function
In the cohort analysed, the data suggests that over 1 in 5 chose not to resource marketing internally.
This can be interpreted in two ways: either marketing is not seen as a priority, and software businesses are instead investing in other growth multiplying departments (for example, product and customer success), or marketing is increasingly outsourced to experts and does not warrant full-time employees. We’ve seen both of these scenarios in our exchanges with software companies over the past year, certainly not helped by the financial pressures of economic downturn.
The influence of scale
Does size influence whether a company has an inhouse team? Our cohort would suggest yes, but not as much as you might suspect. In our research of companies within the cohort that has not resourced marketing with full-time employees:
28% of companies had a headcount between 101-200
32% of companies had a headcount between 51-100
40% of companies had a headcount between 10-50
Who’s running
marketing?
In this data analysis, we selected the most senior in-house marketing role at each of the companies. Again, the results were surprising.
13% of the most senior roles in a marketing team did not have ‘marketing’ in the title. These were most commonly supplanted by including words such as ‘Commercial’ and ‘Growth’.
Moreover, only 14% of the marketing teams were run by a CMO, with most companies delegating the task of marketing leadership to more junior (and cost-effective) roles such as Marketing Managers.
13%
of team leaders did not have the term ‘marketing’ in their job title*
14%
of marketing teams were led by the traditional CMO role*
Marketing leadership roles
Other roles
Marketing & Communications Manager | Director of Demand Generation | Head of Growth | Head of Marketing and Communications | Head of New Business & Marketing | Head of Demand Generation | Head of Growth & Marketing | Affiliate Marketing Manager | Business Growth Partner | Brand Design Manager | Client Marketing Manager | Content Marketing Manager | Digital Marketing Assistant | Digital Marketing Manager | Digital Marketing Officer | Digital Marketing Specialist | Director of Marketing & Growth | Marketing Lead | Sales and Marketing Manager | Global Head of Marketing | Global Marketing Director | Global Marketing Manager | Growth Lead | Growth Manager | Product Marketing
The growth of growth
While, thankfully, most marketing leadership roles still include the all-important term, ‘marketing’, the rise of a new role that blurs the lines between financial strategy, product, and marketing has come to life: Growth. In fact, at least according to our cohort, ‘growth’ has become as ubiquitous with marketing as ‘content’ in job titles.
This particularly indicates the pressures on software businesses to run lean businesses and scale. Growth is the perfect hybrid catch-all title to cover multiple pressure points in a business. But is it a practical expectation? Or is it a recipe for burnout?
While in some ways, the rise of growth roles is a stroke of genius, in practice, we do wonder whether it is a sustainable role for an average pay grade of £53K.
According to Payscale, 2024
PART THREE
The true cost of hiring in house
The cost of an in-house team varies from company to company. Depending on a company's marketing goals, an in-house marketing team can cost businesses anywhere from £50k to £500k annually.
True cost
by role
The cost of an in-house team is never just the salaries you pay them; it's also the equipment they require, the software they need to do their job efficiently, office costs, and so on.
To calculate the salaries of these typical job roles, we looked at the going rate for each role in our list of companies and distilled them into a median value. From there, we multiplied the average salary by 1.7x to get the true cost of that role.
What’s in the 1.7x?
Cost of unworked time (sick leave, annual leave, bereavement).
Unproductive time (25%)
Pension
Office and Equipment
Training and Development Costs
Allowable expenses (travel, meals, mileage)
Benefits
Subscriptions and software
Recruitment and replacement
Home working allowance
Marketing salaries in 2024
Data collected via Payscale (January 2024)
-
What they do: Oversees, plans, and develops a marketing department that builds revenue for the entire organisation.
Avg Annual Salary: £98k (£54k - £156k)
Avg Annual True Cost: £166.6k
Avg Monthly True Cost: £13.8k
-
What they do: Supervises the development of marketing plans and creates budgets in line with the business's overall marketing plan. Often a CMO-in-the-making with less war stories.
Avg Annual Salary: £70k (£42k - £104k)
Avg Annual True Cost: £119k
Avg Monthly True Cost: £9.9k
-
What they do: Promotes new and existing features in alignment with the product team to a company's target audience using a variety of marketing channels.
Avg Annual Salary: £46k (£30k - £70k)
Avg Annual True Cost: £78.2k
Avg Monthly True Cost: £6.5k
-
What they do: Manages the marketing campaigns and programs per the organisation's overall strategy.
Avg Annual Salary: £35.5k (£25k - £52k)
Avg Annual True Cost: £60.3k
Avg Monthly True Cost: £5k
-
What they do: Plan, develop, and oversee the successful implementation of a company's content marketing plan.
Avg Annual Salary: £36.8k (£26k - £55k)
Avg Annual True Cost: £62.5k
Avg Monthly True Cost: £5.2k
-
What they do: Oversees and executes design projects related to a company's brand and product, often creating bespoke visual assets.
Avg Annual Salary: £32.6k (£25k - £45k)
Avg Annual True Cost: £55.4k
Avg Monthly True Cost: £4.6k
-
What they do: Discover keywords to target for web-based content and handle organic traffic generation strategies.
Avg Annual Salary: £24.5k (£19k - £41k)
Avg Annual True Cost: £41.6k
Avg Monthly True Cost: £3.4k
-
What they do: Responsible for finding, planning, and managing company events and festival attendances that maximise brand engagement and lead generation.
Avg Annual Salary: £29k (£21k - £42k)
Avg Annual True Cost: £49.3k
Avg Monthly True Cost: £4.1K
-
What they do: Write website content, social media copy, and catchy slogans that attract readership and engagement from the target audience.
Avg Annual Salary: £25.8k (£19k - £37k)
Avg Annual True Cost: £43.8k
Avg Monthly True Cost: £3.6k
-
What they do: Develops bespoke social media content that engages with a brand's audience on various social platforms.
Avg Annual Salary: £22.7k (£17k - £30k)
Avg Annual True Cost: £38.5k
Avg Monthly True Cost: £3.2k
-
What they do: Works on digital marketing campaigns by performing market research, content creation, and other duties relating to a campaign's success online.
Avg Annual Salary: £28.8k (£21k - £40k)
Avg Annual True Cost: £48.9k
Avg Monthly True Cost: £4k
True cost
by team
This data is helpful as a baseline of how much in-house teams cost, but we've taken this further. We designed two bespoke teams using some common roles and provided their actual cost to highlight the savings B2B tech companies can make using fractional marketing teams.
The same equation (1.7x) as above goes into play here to calculate their true cost.
True Cost:
Team Model 1
Marketing Manager
Copywriter
Social Media Coordinator
TOTAL: £11.8K Per Month (£141,600 per year)
True Cost:
Team Model 2
Marketing Director
Senior Graphic Designer
Content Marketing Manager
TOTAL: £19.7K Per Month (£236,400 per year)
The case for
an alternative
The evidence is clear. Running an in-house marketing team is expensive. We’ve already seen marketing departments sacked to make room in budgets, but that leaves a gaping hole in a software company’s marketing resourcing.
Outsourcing is a cheaper option, but with it comes various downsides - such as continuity of activity and availability. However, we believe these factors can be alleviated with a fractional CMO.
Fractional CMO services like those provided by CHIEF STUDIO provide all the marketing skills software companies need to thrive over long campaigns without the in-house overheads.
“Great software people are not usually great marketers and while software people are often good at attracting and retaining other great software people – they find it hard to attract great marketers. This is compounded by the fact that great marketers are more attracted to agencies because they like the variety of work, working with other marketers, and always being busy.
But a long-term marketing campaign needs various skills, and often a different mix each month. If you have a limited budget but want the maximum quality out of it, CHIEF is a great option.”