Many corporates I know have their own SEO/PPC team managing inhouse campaigns, which were being outsourced at times.

I feel that they are right. Once they have found that Internet Marketing is not a one time game, but an ongoing process, they probably cut huge costs.
Outsourcing cost to a reputed firm vs. CTC of a dedicated resource is much higher...

This is probably because of the value degradation by individuals in this industry. Freelancers are still making good money, singled out from their past employers, but I feel they are at risk.

What can be the scenario in the long run (say, 10 years hence)? :confused:

This really depends on the part of the world you are in and the general competition for new employee's. In the bay area where I am located the market for appropriate SEM/SEO employee's is fierce and thus the pay is really high.

Yes, you are right. I, too, know that the demand vs. supply for a competent resource is very scarce irrespective of the location. The scenario is same for India, where I am located.

What could be the long term scenario in this industry?
Will outsourcing exist or explode?

Its like most things in life - you can DIY, or call in an expert, or project manage a combination of the two.

I've worked at computer companies where they outsourced their car fleet management - sure - they could hire people to manage their own car fleet, strike leasing deals, manage crashed & broken cars - or get in a 3rd party specialist.

Often it just comes down to what you perceive your companies core competence to be.

As Detlev said at the recent Search Strategies conference here in Sydney - the advantage of getting in an SEO specialist is 'you know what you know - and what you don't know - you just don't know'

Most external SEO consultants have worked on many many sites, in a variety of industries. So they tend to get to see more challenges than someone who has only worked on one site, or in one industry. And they get fresh new challenges all the time - which keeps them on top of the issues.

I'm increasingly finding that as an SEO/SEM Agency, we get called in to to the strategy & site review aspects - and provide the high level advice and guidance. And inhouse teams increasingly do the implementation. So its a mix of both, working together.

Yes the fact is true. In fact, I am at present serving the financial sector over here in India. And I am in the research team of a stock broking website. This is a long term and on going process as you have mentioned that earlier. So many companies here in India specially the Financial services companies are increasingly showing their interest on this particular segment of marketing. In that way growing companies are cutting the costs instead of outsourcing.

sekharsaha.

In the long term, most companies that aim to have a long-term commitment to SEM need to bring in-house the basic skills to perform ongoing work in this area.

However, the company naturally makes these SEM staff in-house focus entirely on their company-projects, which reduces and narrows the broader experience these in-house staff would have in the wider consultancy/agency SEM field. They will grow blinkered, and lose out on the insights that working across a broad spectrum of clients in many wildly differing industries can bring.

This means they'll still need to use Outsourcing for specialist tasks, and also use consultancy or training to refresh their in-house team's understanding, bringing in that broader insight and experience from time to time.

This means they'll still need to use Outsourcing for specialist tasks, and also use consultancy or training to refresh their in-house team's understanding, bringing in that broader insight and experience from time to time.
Good point! Marketing Sherpa says that firms who outsource SEO see a larger lift in the first year than those who do not outsource. Can't remember the actual percentage but of the top of my head I think it was like 30%!

I think in any business a fresh set of eyes always opens up new avenues or generates ideas that were previously not thought of ... bottom line having an outside, unbiased source look at a PPC Campaign or recommend SEO changes will result in an overall benefit - or a 30% lift. In many cases, those who are too close to a project can't see outside that box of one track thinking.

Aside from that the above point is right on - in an agency setting or outsourced setting there are multiple mediums to bounce ideas off of, generate awareness of new trends or SEO tags, etc whereas an in-house company, from my experience, is so bogged down doing the everyday processes it can be hard to stay on top of the market changes.

Beyond that, there is still the line of thinking on both the PPC and SEO side that once a campaign is optimized or once #1 rankings are achieved that is the end of the game. I can name 5 (10 possibly if I thought about it pretty hard) friends who were all laid off after achieving rankings for their respective employers. I think outsourcing is far from dead and will exist for many years to come!!