Oliver McAteer
Mar 1, 2020

A third of marketers to take more in-house in 2020: study

Part of the change means agencies should be adapting their business model to help support in-housing.

A third of marketers to take more in-house in 2020: study

Around 34 percent of marketers around the globe are eyeing up more in-housing across all ad areas in 2020, a new study has found.

The report, which was produced by MediaLink and WARC and includes a survey of 761 brands, agencies, consultancies, media owners and tech vendors, suggests that while the pendulum has historically swung between outsourcing and in-housing, there is an industry-wide feeling of permanence to this movement.

In fact, experts say agencies would be wise to start building out services specifically designed to support and complement in-house agencies rather than fight the trend.

That might include having more modular units -- that is, teams that can staff up and staff down as needed, to meet such a marketer’s evolving needs, suggests MediaLink Managing Director Donna Sharp. Or, that might include having more nimble buying teams that brands can tap on an ad hoc basis.

MediaLink Vice President Kate Black stressed: "This is a great opportunity for agencies to re-examine what agility means within their own walls and the solutions they bring to their clients." 

She notes that very few marketers – even ones that have embraced in-housing – have elected to work with zero agencies. They crave the outsider perspective these companies can bring, as well as the competition different vendors can foster.

It’s clear in-housing works

Plenty of marketers have been vocal about the perceived benefits of in-housing. The report notes that Procter & Gamble Chief Brand Officer Marc Pritchard has touted the fact that the packaged goods company has saved roughly $1 billion by trimming agency fees. Meanwhile, the aspirin brand Bayer alone has reported a $10 million reduction in spending thanks to in-housing some media.

Steven Fund, who led in-house agencies at both Intel and Staples, saw many reasons to champion in-housing. He said: "Obviously, there’s a financial benefit, but there’s also the ability to create a more consistent brand platform and brand identity across all touchpoints. When you’re in-house, you have visibility into everything that’s created."

Brad Feinberg, North America vice president of media and consumer engagement at Molson Coors, explained: "One of several ways we identified to modernize our marketing capabilities was to create a more direct ownership of our digital marketing technology and overall digital media supply chain. We architected a roadmap with two demand side platforms to understand the efficiencies that might be created as a result of taking more control over certain media buying decisions. We couldn’t pass up the opportunity to get smarter about how our media dollars are planned and executed."

What about media buying?

While in-housing on the creative side appears to be rumbling on with minimal pain in most cases, a huge question mark still hangs over media-buying -- programmatic in particular.

The report states that the most important step in making a decision to take buying in-house starts up front; brands need to determine definitively what their goal is, and how they’ll grade success. Otherwise, this strategy may be set up for ambiguous returns.

Experts stress that building programmatic capabilities isn’t just a hiring exercise. You can’t just stock up on former programmatic agency executives and send them off. Marketers that want to take some portion of buying in-house need to invest money into technology, data management systems and analytics, said Sharp.

"Without the technology and database there is nothing for the team to do," she added.

Another key step is to assess how data-ready the company is. Will it be easy for stakeholders to get the data they need when they need it? Is the firm really ready for a more algorithmic-driven way of operating?

When it comes to building out a programmatic team, brands should think about how many people they want running strategy, versus "having their hands on keyboards," said MediaLink Managing Director Mark Wagman.

In other words, do you want to hire a few senior executives who can outsource some programmatic tactics to ad tech companies, or do you want to build a large team of people skilled in real-time buying and media plan optimization?

The consultancy pros said there is a common misconception that building an in-house programmatic unit simply means hiring a bunch of "digital traders." But in reality, many brands need to bring on audience segmentation specialists who can analyze and apply data sets, as well as strategy and planning executives, data scientists and experts in "platform and data governance." These are people who can speak the IT department’s language and can make sure all the technology systems are running smoothly and protecting a client’s data.

One thing is clear: These moves are, needless to say, complicated, so it’s okay for brands to start slowly, gradually weaning themselves off external agencies as needed, Wagman added. Small tests or pilot programs are very valuable in the early stages. It’s important to get the processes and communications set up correctly before a brand goes "all-in" and builds a massive in-house team.

The research stresses that brands must prepare their current agencies for an upcoming shift, so that both sides can align on a transition process early on and brands can get everything they need before cutting ties.

The great talent challenge

It’s true -- there is an industry-wide struggle in brands acquiring and retaining top talent. But the best marketers are creating ways to break through.

Remi Marcelli, the LEGO Group Senior Vice President and head of The LEGO Agency, is hyper-attuned to the importance of talent and a strong believer that attracting and retaining the right type of creatives requires the promise of inspiration.

He said: "Creative people don’t quit their job to do cheap work; they quit their job to do excellence.

"We try to find room for freedom – to allow people to work on their own creative projects. We’re always trying to find creative bubbles to protect creative people from the corporate machine."

Marcelli suggested that "when you have shared KPIs, a shared vision, and a dedicated workforce that is committed to contribute to the brand, then you will get great work out of them."

Campaign US

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