Marketers bringing more advertising functions in-house rather than outsourcing them to an agency, also known as in-housing, has recently garnered significant buzz. Many assume that cost cutting is the driving force behind in-housing, but in our conversations with clients, we often find that neither full in-housing nor cost cutting is the end goal.
Instead, we’ve heard that control, transparency, agility, flexibility, and better utilization of data are the motivating forces driving in-housing. Additionally, none of the marketers we’ve spoken with actually want to run all biddable media in-house using their own staff. While the end goal is to achieve control, transparency, etc., the means are up for discussion.
Let’s look at how marketers can achieve these objectives regardless of whether they ultimately in-house. And, let’s consider the hybridization of in-housing and how marketers can best use this option to their advantage.
What type of control is actually desired? There are a few different kinds, so getting clear on this up front is important. Do you want control over contracts? I can’t imagine an agency not letting the marketer sign a publisher, technology, or research contract directly. After all, if the client signs the contract, they can pay the other side directly without making the agency take the risk of being on the hook for payment. I think any agency would be excited about this.
What about control over data? When CvE works with any client, they are more than welcome to request in our contract that we turn over any data we possess while working with them in full at the end of our relationship (or during, for that matter). We would happily grant that request, and all your impression, click, and conversion data can be ported to the next agency or to the platform itself at any time.
As a marketer, are there other types of control you’re seeking? Let us know – we’re sure we’d embrace it!
One of the biggest controversies of our industry is around transparency. Marketers should demand radical transparency, and agencies should deliver on this too.
Building performance in the biddable space takes sharp minds coming together to clean up data, glean insights and test hypotheses at a high pace. For this to be successful, access to first-party data, a willingness to test and try, and a collaborative mindset around meeting and exceeding KPIs are instrumental.
We maintain that results are more important than transparency to every marketer. That does not mean marketers shouldn’t have full transparency, but marketers should not prioritize transparency and “knowing everything” over ensuring they actually get more value than they’re paying for. Again, the marketer can own the contracts and pay the bills directly if they’re worried about unethical behavior. Of course, the marketer could do that for six months and then turn that over to the agency. And when the costs don’t rise, they should feel comfortable knowing the transparency has continued.
Agility and Flexibility
Taken directly from a job description, these are fundamentals of marketing and media these days. It is ideal to be agile and flexible given the fragmented and fast-moving nature of our industry, but to expect this to naturally be a given thanks to in-housing could potentially be misleading.
These are qualities that need to be nurtured and encouraged, and both are possible to build into a partnership with an outside company. Put these values at the heart of the partnership. Then, make sure to attach measurable KPIs to them and keep everyone committed and accountable to the plan. Modern-day agencies and consultancies can easily be part of client teams, even physically present every day of the week, if need be.
Of course, having a team in-house doesn’t automatically guarantee agility or flexibility. In-house team members take PTO and move on in their careers just as agency staffers do. But when it happens in-house, it’s your responsibility and not the agency’s to source a qualified replacement.
Almost every marketer has data in some shape or form. The challenge is to derive actionable insights from the data and to test hypotheses built from owned data. This takes knowledge of the business, but first and foremost smart people to ask the right questions.
External partners can work with marketing data in the same capacity that marketers do themselves, but this requires a relationship built on trust and transparency. The value gained from sharing first-party data with partners far outweighs the challenges and risks associated with doing so.
Whether it’s customer data (first-party data) or campaign data itself, a marketer can achieve the same level of ownership and security with any responsible agency partner.
Bonus Category: Talent
We wouldn’t have done a thorough job scouring the in-housing topic if we didn’t also address talent. Talent is probably the biggest challenge facing us all, especially since we are often competing for the same smart minds. Hiring incredible biddable media talent in-house may not seem hard, but what happens in a year when that talent wants a new challenge? Agencies can hire brilliant people (when paid well, by the way) and continuously give those people new opportunities to learn and grow across verticals. This benefits you, the marketer, in that you’re constantly exposed to new ideas from across industries.
So, are we pro-agency? Absolutely. That said, there are a handful of brands where in-housing really does make sense. I’ve met the folks at Netflix that run their in-house agency, and the level of sophistication they’ve built that is specific and custom to their brand is both impressive and not something that would be easily achieved through an agency partnership. However, Netflix decided advertising should be a core competency of theirs, right in line with excellent content production. This is buy-in at the board level. Most brands don’t have this, don’t need this, and are far better off partnering with a sophisticated agency that can keep their brand ahead of the market technologically and in practice.
If you’re still weighing the options around in-housing, reach out to us to talk through what might work best for your organization.