Commentary

How To Avoid In-Housing Disaster

The following was previously published in an earlier edition of Marketing Insider.

Whether you blame the fragmented media landscape, increasing demand for transparency or expanding agency capabilities, one thing is clear: More brands are establishing in-house agency services. 

A2018 report from the Association of National Advertisers found that 78% of members maintain an in-house agency, compared to 58% in 2013 and 42% in 2008. 

If you’re thinking of taking more -- or less -- of your agency work in-house, here are a few things to consider first.

1. Be clear about what you want to accomplish. Brands have different motivations for bringing agency work in-house. It might be speed to market, cost, performance or data security. Whatever the motivation, brands should clearly define their objectives. Do you want to cut time to launch new campaigns by three days? Or improve conversion volume by 15%? 

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If brands don’t set goalposts, they might find themselves in the middle of a transition asking, “Why are we doing this again?” Setting specific KPIs, just as you would for a media campaign, will keep the in-housing process in check and spare you ins-sourcer’s remorse. 

2. Declutter and optimize your tech stack. Assess your tech stack early and often. Prioritize the mix of technology that works best for your brand -- not what works best for your agency partners. Think about what technology you’re using, who handles the contracts and the level of process transparency.

How much do you know about key platforms? Do you understand how they’re being used? Is there room to consolidate? Is user privacy a priority? Brands must take ownership of these relationships and put their own people in charge of technology operations.

One way to start is to list all technology partners, their roles, key features and cost. Evoke your inner Marie Kondo: “Do we need four demand-side platforms?” “Do we have multiple reporting interfaces that tell the same story?” “Do they spark joy?”

3. Don’t underestimate the groundwork. When gauging what to bring in-house, consider starting with the tedious tasks like ad trafficking, tag management, budget actualization, troubleshooting and reporting. More than half of brands in-house some degree of media planning and buying, according to the ANA report referenced above.  Content marketing is another popular area where many brands have transitioned to in-house.

Ad ops is critical to campaign management and often the most demanding piece of the puzzle that leads to high turnover. This is closely tied to the tech stack evaluation, since that will give better foresight into the types of work required.

4. Lean into your agency partners. Brands should be transparent about plans to in-source and work with agency partners to map out a strategy. What should you look for in an ideal candidate? What should the team keep a close eye on? How do you transfer ownership without losing historical data?

What if the in-housing decision results in terminating the relationship with your agency? Breakups are difficult, but that doesn’t mean they can’t be amicable. The best resource on your account is your current partner. 

Final Thoughts

Whether to create or expand in-house capabilities is a natural question many brands are asking, especially considering how much ad tech has championed automation and self-serve platforms. This is not a topic to fret over, but rather embrace.

1 comment about "How To Avoid In-Housing Disaster".
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  1. Ed Papazian from Media Dynamics Inc, January 27, 2020 at 4:38 p.m.

    Some good points, Jonathan. At present, the vast majority of in-house "advertising/media" work is for digital not traditional media and much of it is for sales promotional activities, not branding campaigns. Even so, many marketers who went this route are finding that it's not a full time, every day, job for a dedicated staff, because they failed to consider the work load involved on a sustqained basis. This, coupled with factors such as difficulties in recruiting skilled people and keeping them, the inevitable in-breeding of ideas, etc. is limiting the growth of in-house. Hopefully advertisers will take steps to use a more effecftive mix of in- and out-of-house agency skills, rather than over emphasizing factors such as assumed cost savings. As a rule you get what you pay for.

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