In-House Agencies, Good Or Bad? It Depends

  • by , Op-Ed Contributor, November 2, 2018

The Association of National Advertisers (ANA) recently released a new report that said marketers are creating in-house agencies at a rapid clip.  The ANA said 78 percent of its members—which constitute the biggest-spending clients in the nation—have some form of in-house agency. And of the remaining 22 percent who don’t have in-house shops, eight percent said they’re thinking about it.

Not good news for agencies, for sure.  It’s a trend that’s been going on for a while now, but it’s clearly growing.  The ANA conducted the same survey five years ago and at that time, only 58 percent of respondents reported in-house agency operations.  Still a lot, but now it’s considerably more.

But is taking ad agency operations in-house really the best move for clients?  I hate to equivocate, but the truest answer is yes and no because it should be a department by department decision.  The simple answer is that some marketing disciplines can be moved inside and perform brilliantly and successfully.  Others can’t, and marketers shouldn’t even try.



Here’s a rundown of what I believe works inside and what doesn’t.

Branding:  This responsibility should be handled by an outside agency.  Marketers need people who understand branding as a profession and can see the larger picture.  Branding agencies are true experts and have the advantage of working in many product and service categories.  They’re better at knowing what works and what doesn’t.

Creative:  Also should be handled by an agency.  In-house creatives work on the same brand(s) all the time, and that’s not a true creative endeavor.  Agency creatives thrive on change and do their best work when faced with multiple challenges.  In-house staffers are much less likely to push the envelope by asking marketers to go someplace they’ve never been before.

Media:  Again, stick with an agency.  Clients need the marketplace clout and sophistication that a media agency or media department can harness and build upon.  Media agencies also have a much better perspective on competitive pricing since they work for multiple brands and categories.  

Social Media:  This discipline works best in house. It should represent the day-to-day pulse of a company, and insiders are best at getting the right feel and the proper tone of voice for expressing that sentiment.  It’s also more cost-effective because it requires daily (sometimes hourly) attention and an agency would charge an arm and a leg for that kind of concentrated, demanding service.

Website Development and Maintenance: Again, in-house is the best place for this function.  Like social, it requires intense attention and since it’s a marketer’s “window to the world” it’s smart to keep it close to home.

Public Relations: Definitely outside.  Yes, an in-house person is needed to help manage this responsibility, but an outside agency or consultant can provide the kind of objectivity—not to mention press connections—that’s needed to do get the job done.  Insiders tend to think everything the company does is newsworthy, but it fact that’s not always the case. An outside POV is essential.

One good rule of thumb when considering going in-house or staying outside is this: Any discipline that requires variety and objectivity should be handled outside.  But when a ton of content generation is needed, or certain tasks need constant attention to everyday detail, keep it inside.



1 comment about "In-House Agencies, Good Or Bad? It Depends".
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  1. James Smith from J. R. Smith Group, November 6, 2018 at 12:26 a.m.

    Matt:  Curious about your take on the following.  1) Why are clients so driven to bring various ad functions in-house? Programmic going in-house is usually defended on basis of cost savings (middleman cuts). But other functions? Just perceived "cost savings?"
    2) You didn't mention data analytics.  Why not?  Thanks.

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