For many CMOs and marketing leaders, the conversation around cost reduction isn't one they've chosen.
The business has made a decision to reduce its cost base. Functions have been given savings targets, headcount is under scrutiny and marketing is expected to contribute.
The challenge is that the expectations placed on marketing rarely reduce at the same time.
Revenue targets remain. Customer acquisition remains. Brand, digital, content, communications, CRM and customer experience still need to be managed. Major projects continue and, increasingly, marketing is also expected to help lead the organisation's adoption of AI.
So the challenge facing many marketing leaders isn't simply how to reduce costs.
It's how to reduce costs without diminishing the organisation's ability to deliver marketing.
And that's a much more difficult problem.
When your largest cost is people
For most internal marketing functions, people represent one of the largest areas of controllable expenditure.
That makes headcount an obvious focus when an organisation needs to materially reduce its operating costs.
But removing a position doesn't automatically remove the requirement that position was fulfilling.
The work is often redistributed across the remaining team. Senior people take on more execution. Projects move more slowly. Specialist activities are outsourced individually. Agencies are asked to fill gaps. Or some work simply stops being done.
For the CMO, that can create an uncomfortable position. You've achieved the required saving on paper, but potentially reduced the capability of the function you're accountable for leading.
There is another way to think about the equation.
Rather than starting with which people can we remove, start with what capability does the business need to retain.
Then determine the most efficient way to access it.
Not every capability needs to be a fixed cost
The traditional marketing department has largely been built around fixed internal headcount, supplemented by agencies and other external suppliers.
But the requirements of a marketing function aren't fixed. They move throughout the year and throughout the lifecycle of the organisation.
A major transformation might temporarily increase the requirement for communications or digital capability. A product launch creates a different workload. Someone takes extended leave. A new market requires specialist expertise. A quieter period might require considerably less resource.
Yet the traditional employment model requires businesses to build a team around a relatively fixed structure.
At The Marketing Room, we believe there is an opportunity to build the marketing function differently. We call the operating system behind it our Open Marketing Model. It combines three key elements: fractional talent, AI and offshore capability.
Rather than replacing the internal marketing team, these capabilities are designed to sit around it.
Fractional talent: experience without adding permanent headcount
The first pillar is experienced fractional marketing talent.
Instead of every capability requiring a five-day-a-week permanent employee, experienced marketers can be embedded within the organisation for the amount of time actually required.
That might be one, two or three days a week. It might be for a defined project or a period of organisational change.
Importantly, they're not sitting outside the business waiting for a brief. They're embedded. They work with the internal team, understand the organisation, participate in meetings, work within existing systems and take responsibility for delivery.
"Our model really resonates because it gives businesses a way to access experienced marketing capability without carrying it as a permanent fixed cost," says Tahnee Sharp, Founder of The Marketing Room. For a CMO, that provides access to experience and capability without automatically adding another permanent fixed cost.
AI: increasing the output of the people you have
The second pillar is AI.
The opportunity with AI isn't simply to remove people. It's to increase what good people are capable of delivering.
Research, analysis, reporting, content development, campaign planning, administration and many other marketing activities can now be completed significantly faster when AI is used effectively.
That changes the resourcing equation. An experienced marketer supported by the right AI tools, training, systems and governance can achieve significantly more in their available time.
At TMR, AI is therefore built into our broader operating model. Our people are trained regularly, supported with appropriate systems and expected to understand the governance and privacy requirements that come with using AI inside client organisations.
The objective is greater productivity without compromising the quality, judgement or security expected by the client.
Offshore: putting the right work in the right place
The third pillar is offshore capability.
Not every marketing task requires an experienced Australian-based marketer to complete it.
Production, administration and repeatable execution can often be delivered more efficiently through appropriately managed offshore resources.
The important word is managed. The objective isn't simply to send work offshore because it's cheaper. It's to determine which activities can be delivered efficiently elsewhere, while retaining strategy, judgement, stakeholder management and accountability in the right place.
Combined with fractional talent and AI, this allows the CMO to create a much more efficient mix of resources.
Building around the fixed team
None of this means the internal marketing team disappears. In fact, we see the opposite.
The fixed internal team becomes the core. Around that core sits a flexible layer of capability that can be increased, reduced or changed as the organisation's requirements evolve.
That is the principle behind TMR's Managed Marketing Services Provider model.
Rather than choosing between building everything internally or outsourcing marketing entirely, organisations can create a hybrid function.
The internal team provides continuity, organisational knowledge and leadership. Fractional talent adds experienced capability when required. AI increases productivity. Offshore resources provide efficient execution. And the entire model can scale as the business changes.
Cost reduction without designing a smaller marketing function
There are periods when organisations genuinely need to reduce costs. CMOs and marketing leaders can't always change that mandate.
What they can influence is how the marketing function is redesigned in response.
The objective doesn't have to be a permanently smaller or less capable marketing function simply because the fixed cost base needs to reduce.
It can be an opportunity to reconsider which capabilities genuinely need to sit permanently inside the organisation and which can be accessed more flexibly.
That distinction becomes particularly valuable during restructures, transformation programs, acquisitions, periods of rapid growth or contraction, and headcount freezes.
The business gets greater flexibility over its cost base. The CMO retains access to the capability required to deliver. And the internal team gets a support structure that can expand and contract around them rather than continually being expected to absorb more.
It's a philosophy The Marketing Room has held since it was founded: "Effectiveness is greater than volume."
Reducing marketing costs doesn't necessarily have to mean reducing marketing capability.
It may simply require a different way of building the marketing function.
