'The great resignation'—or if your company is observing this as a glass-half-full situation, 'the great attraction'—was on the lips of nearly everyone who presented and attended Day 1 of Campaign360 at Raffles Hotel, Singapore.
Shufen Goh, co-founder and principal of R3, and moderator of a session on in-housing at the event, said that in 2020, the industry shed some 20% of its workforce which catapulted the gig economy. Stats also show that 53% of brands have already embedded in-house capabilities that operate independently from any external agency support. However, the model is still very much a hybrid one, as Goh observed that she hasn’t had yet a single client that has pivoted completely to in-housing. Of the 53% of brands mentioned above, 97% say that they have in-housed some form of digital capability.
Siew Ting Foo, CMO, Greater Asia, at HP, said that her company’s in-housing journey began shortly before the pandemic struck and was driven by the intent of driving digital transformation across the organisation. The company’s CFO saw transformation as an opportunity to upgrade the digital team and to use that to drive the value of marketing.
At HP, the internal team was tasked to perform tasks such as media buying, search, and some aspects of performance marketing. However, Foo stressed that brand strategy and creative are still services that are very much reliant on agency input, as diversity of thought is critical in these areas.
Similarly, Alvin Neo, chief customer and marketing officer at FairPrice Group and NTUC Link, said that the in-housing process in his team began a few months before the pandemic and is focused on performance marketing. The company still leverages Havas as its media AOR but nearly 100% of its performance marketing capabilities have been developed in-house in a multi-year step-by-step process. Design—which includes collaterals and storefronts—is also done almost entirely in-house. Meanwhile, content and social, where the brand partners with Goodstuph, is split between internal and agency teams.
So how does Neo decide which capabilities to focus on in-house and which ones to commission externally? First, he thinks about whether a service is part of the brand’s core competency. For instance, digital ecommerce was naturally identified as a core competency during Covid and much of the business success rests on the team’s agility in this area. Because of the speed required to build this capability, Neo decided to expand his in-house team because “responsiveness and speed is not easy to come by” from agency partners.
“[Agencies] will take two days for a turnaround whereas in-house teams work side-by-side with the businesses,” said Neo. “[In-house teams] can turn it around within hours or overnight. [We started in-housing] with the purpose of efficiency, but we also benefited from the effectiveness of both quality and responsiveness.”
Part of the reason that marketers tend to think about in-housing is cost efficiency. But with salary inflations sweeping across the workforce, does in-housing make as much business sense as it did before?
Richard Brosgill, APAC managing director at Assembly, said that building a framework based on cost is the wrong starting principle. Marketers might be able to appease their procurement department today, but this could lead to expectations of cost-saving tomorrow. On top of that, in the initial stages of building out an internal team, marketers tend to spend more to train their team and are more likely to channel funds to external agencies to aid with these tasks.
But Brosgill understands the appeal of in-housing especially because of increased expectations from consumers for brands’ to have sophisticated digital experiences. With that, there also comes increased expectations for brands to own their own data.
“A sense of control around their data is a critical foundation to build your own in-housing journey and this also allows you to tap into managing all the conversations around transparency and controlling the media supply chain,” he said.
On the talent front, Neo brought up a challenge with in-housing: “For the first two years, the specialists you bring in are happy. But what I realise is that comes a point where [the learning] curve dips, and the new ideas don't come as easily, they get a bit stale, and they might get a bit complacent. It’s not a criticism, it's a reality.”
Especially for talent who are specialists, Neo said that some degree of churn is to be expected as a brand like FairPrice is not in the main business of media-buying. Ultimately, in-house media specialists are enablers in a business that primarily functions to sell groceries.
One thing that Neo does to combat this problem is to appoint a ‘master conductor’ in each team to ‘orchestrate’ the combination of resources, talent input, and ROI. These ‘conductors’ are the key people in Neo’s team while the specialists within the various team will “inevitably come and go”.
Foo, meanwhile, said that culture is vital to retaining in-house talent especially around integrating different specialist functions and galvanising towards a common cause.
She added: “I don't have a magic wand. I’m open to learning about other models that could help us improve.”
Follow Campaign's ongoing coverage of sessions in our live blog as well as exclusive research on Asia's talent crunch in partnership with Forrester and WFA.