The rise of in-housing is an opportunity, not a threat
Within the industry, the number of companies moving towards having in-house marketing and advertising teams is on the up. It's causing concern for some agencies who are fearing that their role may become redundant.
Mathias Upton-Hansen, Co-founder of Blacklist Creative, discusses how the rise of client ‘in-housing’ within creative services is an opportunity, not a threat.
Clients and advertisers have been slowly but surely growing their in-house capabilities to take on board activities traditionally outsourced to agencies for some time now. As we speak, it seems to be reaching a tipping point. From typical media agency services such as online media bidding through to broader social media and communications approaches, the creative industry is voicing concerns that erosion to their service offerings could be coming from within their cherished client bases, as well as from competitors.
This isn’t a new move, but it is accelerating. A US study from last year found that 78% of Association of National Advertisers member brands had in-housed agency support, a rise of 35% over five years. For the largest advertisers this makes perfect sense – on a global basis some claimed having agency rosters numbering over 1,500 firms, which is a mindboggling number to coordinate and unify. Bringing certain elements of creative services back within their walls makes sense in these extreme cases. Factor in the lack of transparency issues faced by media planning and taking control back in-house also becomes an understandable and straightforward decision when it comes to cost control.
The growth of this trend is setting the cat among the agency pigeons. But we would argue that it’s not something to be feared. Instead it should be embraced – especially by the smallest creative businesses and theoretically those most concerned by the growth of in-housing – as an opportunity.
While many clients are increasing their in-house capabilities, just as many are also taking advantage of their existing agency support to embed those teams within their infrastructure. This obviously presents massive learning potential alongside the chance for an agency to truly embody sentiments of acting as an extension of the client business. For the smallest creative agencies, working within a much larger organism provides more than understanding.
It gives unrivalled exposure, from an insider perspective, to complex and major organisations which creative businesses may otherwise never see. That can make the embedded agency infinitely more knowledgeable as a business themselves, as well as lifting the curtain on internal company processes and procedures which you may otherwise never be aware of.
In-house vs agency
It’s a longstanding opinion when discussing in-house versus agency side roles that in-house can tend to be slower, less creative, and less able to keep up with fast moving trends. The flipside is often that agency teams are spread across a number of clients, and unable to fully dedicate themselves to one client completely. Having an embedded agency team within the clients can answer both of these challenges – applying the nimble, effective and fast-paced approach of agencies to more dedicated and immersive processes of the client.
Speaking from firsthand experience, we have always found that our business became much stronger as a result of in-housing teams on a short or long term basis within clients. It shapes the kinds of strong relationships built on intrinsic understanding of their business and processes, alongside a unique approach to customer service which can only come from having walked in the client’s shoes. These experiences have shaped our agency and its reputation into what it is today, and it’s become something which sets us apart in the market.
Furthermore, in-housing is a unique way to build team expertise, and to expand learning and skills in new sectors or approaches. Working in video creative and production, you may only ever encounter other stimuli from the same world. When you’re fully immersed client-side, you are exposed to so many other marketing and communications channels, not to mention other departments and instances where video could add value like HR, or cross-departmental knowledge sharing. It’s an eye opener for different ways to apply and sell video skills as well as to develop the business which you may otherwise never encounter.
As we’re finding with our embedded studio work at the moment for Peloton, taking on these projects requires a different approach to planning and resource for your teams. Offering in-housed teams is not necessarily something which agencies can simply pick up and implement without proper preparation. Staff need to be on board and excited at the prospect of being loaned out client side, and it can impact resource planning for ‘traditional’ agency work, as the in-house team will be likely ringfenced and working exclusively on one single piece of work.
However, in terms of experience, learnings, client relationship and even broader business knowledge, we certainly feel it’s worth the focus and the flexibility for what it’s given to our agency in return.