I have spent quite a few column inches being critical of marketers pronouncing that they are going to in-house “something” (it could be data management, programmatic, content creation, or any other shiny new marketing or advertising toy).
Don’t get me wrong. Some marketers are following this path successfully and for the right reasons, but many others are just saying it either with the intent of influencing their agency contract negotiations or because “everybody” is talking about it.
And agencies and their holding companies are rightfully worried about this trend because it is hurting their bottom line on many different fronts at the same time — for example, media, digital, content development and content production, and strategic advice. And consultancies like Accenture, Deloitte and others are gleefully supporting the trend as they gobble up support assignments that used to be exclusive agency territory.
Marketers are often driven by the promise of lower cost in general and better/faster execution under their own control. And while that might be true for some, many marketers are finding that the grass is often not much greener on their own side vs. on the agency side. What they hadn’t realized is that these decisions have far-reaching consequences across the wider enterprise that impact working methods, required internal and external support structures, capital investment, HR policies, IT investment and talent, etc.
And apart from these operational challenges, going in-house also creates an additional challenge that marketers, no matter how smart or right they were in their initial decision, may have not foreseen: the fact that the in-house structure(s) are an additional pillar (or silo) in the marketing structure.
Many marketers talk about simplification and integration as key strategic imperatives. An in-house operation needs to be carefully positioned and directed in order to ensure it drives the brand marketing mission.
The reality, however, is that these structures are often rooted in an efficiency promise that prevents or hinders an effectiveness goal. In other words: the role of the in-house entity is more often measured in terms of operational cost vs. prior outsourced cost, or speed of execution vs. previous outsourced execution, etc.
And while these are not unimportant measures, especially after making a significant and long term investment in the in-house marketing ecosystem, they gloss over several critical components. What should be taken into consideration obviously is not only the cost of in-housing vs prior cost, but the impact the in-housing decision has had on brand health, brand growth and overall business performance.
We have all seen what happens when the industry decided that low cost was the sole success factor for digital media buying. We’re still collectively trying to clean up the mess that has been created as a result. As we joyfully continue to go in-house, let’s not make the same mistake and kill brand and business building while chasing low marketing operational cost.