6 reasons brands are choosing in-housing
Ben Bushby, People Manager at digital agency Organic, discusses the six Cs - the reasons why brands are increasingly moving their marketing functions in-house.
In-housing is such a hot topic at the moment. Every brand seems to be talking internally about these changes, and their HR and digital leaders are coming together to work out how they can bring their digital marketing in-house.
But why is it such a popular trend? In short, brands are realising that bringing some or all of their marketing in-house can be more effective than outsourcing to an agency.
As with most trends, it’s taken a couple of key players - such as Unilever, Sky and Lego - to conduct their own successful trials. Followed by coverage in the media showcasing the positive results, things have spiraled from there.
While in-housing gathers pace, brands are seeing more intertwined benefits. Taking this on board, Organic has created the top six reasons (our ‘Six Cs’) to in-house.
The general consensus is that the current wave of in-housing stems from brands not having control over their ad buying, paid media and programmatic outputs. Accenture Interactive’s Amir Malik noted that there has been billions of dollars spent on ad placements that were never seen by a consumer. This has made brands want to take back control.
And on top of that, sharing data with agencies in this post-GDPR world could cause some controversy - nobody wants to be the next Cambridge Analytica now, do they?
In a recent survey conducted by Digiday and Bannerflow, 87% of brands agreed they were concerned with the transparency of media agencies. Which is understandable if you felt substantial budgets are being wasted on what is effectively non-existent advertising.
While the in-house trend may have started with media planning, the Association of National Advertisers (ANA) has reported that there have also been large spikes in other specialty services being brought in-house, such as Content Marketing, Data Analytics, and Video Production. Having everything in one place helps to deliver consistency.
It raises the question; will some brands insource all of their digital marketing in the future?
While cost is an important factor to consider, in-housing shouldn’t be the vehicle that facilitates a race to the bottom. Quality first, right?
That said, Unilever has reported global savings of over $500 million in its first full year of extensive in-housing. They believe that it works because agency teams can work in a more agile way with marketing teams, while producing better quality work, at a faster pace. This plays to the marketers’ priorities.
Unilever has also reported that bringing its operations in-house has led them to become more efficient and productive. You’d like to expect better results, as internal teams are more likely to buy into the brand if it’s something they care about and understand.
In-housing can provide marketing teams with data and metrics to make informed long-term decisions. By removing the agency layer, for media buying in particular, it gives the brand more opportunity to understand ad spend and performance.
OK, so it appears as though there’s actually a seventh C, because it’s not all rosy when it comes to in-housing.
In the Bannerflow report, it’s noted that a lack of internal skills and resources are the biggest concerns for brands in-housing from an agency. To set up for success, you have to first find the talent - something that’s not entirely straightforward if reports of a global talent crunch are believed. Not having the right and readily available talent can put brands off.
What about external agencies?
The one thing that can’t possibly be replicated in-house is the creative freshness that external perspective brings. Digital agencies must innovate to compete so they can bring something to the table - mostly in the form of a strategic partnership. Even with the success of their in-housing experiment, Unilever has said that they still "really value those external relationships."
The main thing to consider is that in-housing is still in its infancy and so things will evolve. There are some that believe it’s just a passing phase, but it’s likely that a hybrid model of the two is the future, and brands may need assistance from agencies to actually move in-house.