By: Nick King, Global Practices Lead, CvE
The recent ISBA report said that over 79% of brands are in-housing in some form, however there is no one size fits all approach. The Shakespeare quote, “To thine own self be true”, perfectly encapsulates the essence of creating holistic in-house marketing in 2023. In today’s business world, the evolution of the in-housing model has meant that the question for brands should not be, should all marketing functions be brought in-house, instead the question revolves around what areas are important for the individual business to own and control, and what areas should be outsourced based on the following considerations:
- Speed: Can ideas, campaigns and results be delivered quickly (hours to days), or must they follow week-long SLAs?
- Control: Can the campaigns drive towards the KPIs that the business has set down or are they gamed towards secondary metrics?
- Development: Can you improve everything from technology and data architecture through to campaigns or are you set in a development cycle that is inflexible to your business needs?
- Risk: As a business where do you want the risk of multi-million dollar spends and outcomes sitting?
- Cost: Op-ex, capex combined with long and short-term commitments often cloud the in-housing conversation.
CvE has developed the Growth Sophistication model which allows brands to understand their business and where they can, or should take, control of their marketing. This model is broken into six areas that make a marketing ecosystem:
Developing your Marketing Strategy
Aligning your business strategy with an effective marketing strategy focused on incremental growth lies at the heart of any marketing operation. There is no singular way to do this and the market positioning, communications strategy and the customer journey can be developed equally effectively in-house or with an experienced third-party partner. Speed, control, and cost are often secondary considerations as the results are so vital for setting the North Star to which the company’s marketing efforts work from. Working with a wide variety of brands CvE has seen success in all types of models, however the clear path to success is creating a clear brief for the agency or in-house team that the strategy can be measured against.
Building a future proofed technology stack
The effective operation of a marketing department requires careful consideration of technology selection, setup, and integration. Most large brands (>$10m+ annual marketing budget) should own their marking technology to deliver a stack that is flexible and well-integrated to ensure maximum utility and value. The best MarTech stacks do not just involve a list of vendors for a specific product, channel, or stage in the customer journey, but a clear understanding of how the data flows between platforms. Data within these integrations must move with velocity, variety, veracity and at volume. This, without exception, cannot be achieved by using a generic 3rd party stack.
A key challenge is that with the introduction of consumer privacy legislation across the globe that focuses on privacy (GDPR, CCPA, as well as variety of other legislation in South America, Africa, and Asia) the ownership of 1st party data must sit with the brand for compliance as well as activation. Combined with changes in approach from Google and Apple to tracking and measurement, the base layer of any brand’s technology, namely their CRM, CDP or DMP cannot be outsourced to a third party without serious exposure. Building on top of this to provide the flow of data and buying must therefore reside within an internal technology or MarTech team.
Creating a best-in-class operating model
A critical consideration for any brand thinking about in-housing is recruitment. It is especially challenging to recruit talent for organisations that have a base of operations outside of the London bubble. Having a fully in-housed team needs considerable effort and cost to recruit, maintain, motivate, and cover during illness and absence. One of the key advantages of having a large agency partner is their ability to move personnel around and share learnings of new technology and process without halting day-to-day operations. This is not a reason to avoid hiring traders, technologists, analytics practitioners to lead and manage third-party partners, however brands must consider their long-term ability to hire, maintain and develop an entire high-performing team.
Owning marketing data
The plethora of data that exists means that the days of an agency sending over an excel or PowerPoint with a summary of the last week’s data should be long gone. The end goal for a brand should be to have a single reporting environment (a mission control) from which to build insight, optimise to the right metrics and encourage a continual learning agenda within the organisation. This reporting environment must be accessible and have actionable value to a range of departments and stakeholders. It could come in the form of a shared dashboard of performance across paid, owned and earned campaigns, tied to clear analytics data. Whilst it is possible for this to be owned by a data-savvy agency the fact is that all data should be collated in one place rather than split between the internal data warehouse, individual platforms, and 3rd parties, as it makes outsourcing incredibly time-consuming.
Creating a fit-for-purpose measurement framework
Measurement is broad reaching, but if you can’t measure your media, you cannot plan and optimise. Understanding what to measure and the limitations or veracity of the data collection source is a critical component of any measurement effectiveness program. Too often measurement is focussed on the lowest common denominator whether it be last click or a common media mix model. Not every model needs to be an expensive proprietary system but devising measurement frameworks that deliver specific business critical insights should be a priority for every brand.
Modern marketing, with the dominance of online channels such as Display, Paid Social, and Search, has led to the introduction of new and more and more complex models of Marketing attribution. There are a few challenges that markers face which we explore in other articles, however two key areas are:
- Choice: Marketers are not in total control of how consumers interact with their brands and that they need to measure success beyond immediate sales.
- Privacy: Today’s consumers are not just receptive to personal attention; they fully expect it from the brands in their lives. But that personal experience comes at the expense of some level of privacy.
Brands must develop a framework that can develop a combination of KPIs from media campaigns, experimentation, and Media Mix Modelling at scale to support a cross-channel and cross-platform measurement framework to drive the right outcomes.
Developing channel marketing activation
Originally considered the most important part of an in-housing project, brands should leave this area to last. Despite the difficulty in finding, hiring, and retaining the right talent, it can be done, and search and paid social are simple to do. Even some of the more complex connected channels such as Display, CTV, OOH, audio and programmatic can be owned in-house with a key benefit being the speed at which campaigns can be launched. For instance, boardroom decisions whether it be sales or a new focus can be enacted within 24 hours. However, there are undoubted risks with over-spends and poor performance that would then be owned internally, and arguably the biggest challenge is keeping the team fully trained on the latest campaign set and up optimisation techniques. Too often the only training is delivered by the platforms themselves which are not neutral training but instead aimed at maximising spend for themselves.
The biggest risk of in-housing marketing activation without tech and data, however, is that brands will inherit a cost base which is not able to close the loop on media effectiveness, and in turn, recognise and return the investment outlay. For CMOs, moving marketing away from being a cost centre can be the difference between success and failure.
Next Steps
The decision to bring marketing in-house or work with an agency will depend on the brand’s specific situation, needs and goals. But these strategies need not be made blindly or on gut feel. CvE strongly advocates for making these decisions fact-based, with strong rationales and financial modelling of expenditure versus income, along with prospective requirements and timelines. This would be followed by a clear roadmap, proof of concepts to demonstrate board-level value return, and milestones that track project progress. Building these scenarios and rationales requires specific expertise and a knowledge of the potential pitfalls through experience. CvE would recommend working with a partner who can guide this process, demonstrate where the opportunities lie and implement a change programme to maximise the model you choose.
I hope you enjoyed this article. We intimately understand the pain points of the modern marketer and have designed CvE to help solve your most complex challenges. Contact us to discover how we can help you upgrade your marketing sophistication.
