Research by the Association of National Advertisers (ANA) showed that 78% of its members had some form of an in-house agency last year, compared to 58% in 2013 and 42% in 2008. In addition, 90% said the workload of their in-house agency has increased in the past year, including 65% who said the workload has increased “a lot.”
In-house agencies provide a range of services, including strategy, creative for both traditional and digital media, and media planning and buying. Services that have grown significantly over the past five years include creative strategy, media strategy, social media (both creative and media), and programmatic media buying.
According to ANA, cost efficiencies are the primary benefit of in-house services in-house, followed by better knowledge of brands, speed and nimbleness, and institutional knowledge.
The Desire for More Control over Data
Many experts say the desire for greater control over data is a major factor in the trend. It was for online travel giant Booking Holdings (formerly Priceline), which spent more than $1 billion on Google ads in the third quarter of 2018. By overseeing campaigns in-house, companies can better apply benefits of data analytics across different campaigns.
“The velocity of allowing you to learn from campaigns, adapt, adjust and repurpose, all those things add real business value to the top line,” Booking.com’s Chief Marketing Officer Pepijn Rijvers told CNBC.
Marketing and communications executives also believe that greater control over data can help organizations protect their brand reputations. Companies worry about public relations damage due to data security, consumer privacy, or programmatic advertising mishaps, such as when corporate ads where placed next to extremist content on YouTube.
“In 2018, consumer privacy, fake news and brand safety were areas of concern for most CMOS,” states Clint Tasset, president of AdSwerve, in Marketing Land. “By owning data and data sources, brands can not only better understand the customer journey but can also establish more trust.”
To achieve success, data strategists and creative teams need to work together, Tasset argues. “Clean data provides insights into the kind of content that works, where and to what audiences are responding, but often requires a data specialist to make sense of the data. With data teams working with creatives, brands and agencies can create compelling and engaging content with better results and can deliver personalized experiences to specific audiences.”
Will Brands have Second Thoughts?
Agency executives warn that many companies that move digital marking work in-house underestimate the costs and challenges of recruiting and training new employees. They may misjudge the costs of overhead and employee benefits. Brands also lose outside objective perspectives and critical creative expertise, they warn.
Some brands have struggled to move marketing in-house and moved work back to outside agencies, according to Digiday. Last November, Intel reconsidered its move to bring marketing in-house and placed creative and production work back into the hands of its external agencies.
“There’s a lot of push and pull,” Luis Montero, president of The Community recently told Ad Age. “They bring creative in-house, then they push it back out to agencies again. It feels like it isn’t strategic as much as it is cost-conscious.”
Bottom Line: In an ongoing trend, large brands are moving digital marketing in-house. Marketing and communications executives expect cost savings and more control over marketing content. In addition, they believe greater control over data will help safeguard corporations.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.