Art & Commerce

Stepping Out The buzzword “outsource” means to use a specialist firm to perform a business function rather than doing it internally. Advertising agencies are outsourcees; major advertisers have been delegating the ad-crafting chore to agencies for so long that the practice is considered normal. Now, some agencies are becoming outsourcers, joining the growing trend. (There’s even a trade group, the Outsourcing Institute, which thinks outsourcing is a $100 billion business that could double in the next five years.) An outfit called People Management was founded, literally, in the human-resources department of DDB Needham. PMI now offers a range of personnel and administrative services to numerous companies, including ad shops. PMI president Judson Saviskas told Fulcrum Information Services’ recent agency profitability forum that outsourcing was an effective way of controlling company head counts-a big deal in the agency business-and saving the time spent doing things such as interviewing prospective mailroom clerks. Indeed, the agencies that scored best in terms of profitability in Adweek’s latest Report Card analysis tend to be those with the fewest staffers per dollar of revenue. Typically, they are proponents of outsourcing. -Alan Gottesman (westendal is principal of West End Consulting.