All in for in-housing?
2018 saw the in-housing trend gain momentum, 2019 has seen it explode, but what does 2020 have in store?
- According to the Bannerflo and Digiday 2019 report, 91% of brands have moved at least part of their digital marketing in-house.
- Cost efficiency, greater control and increased transparency are the key reasons brands have taken elements of their business in-house and 2020 will be no different.
- A study led by the Association of National Advertisers (ANA) found that in 2018, 78% of their members had formed an in-house agency of which 58% had been created in the last five years.
Why in-house?
In-housing aims to simultaneously simplify whilst expanding a brand’s marketing strategy. It is about providing the right message, to the right people, at the right time through a smaller team. This ensures that the customer journey can be fully understood and delivered seamlessly.
However, it is not this simple or black-and-white for every brand. Shortly after announcing they were taking their programmatic in-house, Vodafone had to confess they were going to backtrack on this after encountering challenges.
In-housing should be interpreted on a spectrum because the level of work taken in-house can vary greatly with differing levels of success. For example, Unilever has reported savings of €500 million since creating more content in-house, with Lego, Revlon and Duracell following by taking more control and starting the process to set up their in-house agency.
The grey area that falls between ‘must outsource’ and ‘must in-house’ is subjective to each company, and brands must base this on what is right for them and their business context. Gayle Noah, media director at L’Oréal comments,
“For us, in-housing shouldn’t be seen as a threat to the agency. What we’re building with our agency is about us up-skilling for the future so that we can be a better client.”
What you need to consider:
1. Fragmentation
A lot of brands are taking the first steps to move elements of their business in-house, but not all of it. While this change might make sense for many reasons, it also runs the risk of creating a fragmented process which can lead to a lack of cohesion - brands must prepare and plan sufficiently before in-housing.
When a brand considers bringing part of their business in-house, they must pay particular attention to upholding transparency and integration with agency partners. This will ensure that the powerful message a brand wants to deliver to their audience remains as exactly that, powerful.
A study carried out by Bannerflow found that 87% of senior marketing decision-makers from brands were concerned with the level of transparency from agencies.
An in-house team provides businesses with a potential solution to this, as it means that communication becomes streamlined with the team working closely together, resulting in faster decision making, more adaptability, and more opportunity to take creative risks.
Furthermore, through hiring an in-house marketing team, there is less risk of a conflict of interest amongst the team because they will be sharing a common goal and interest to build their company. Whereas, working with an agency gives room for more contradicting opinions that can cost time and money trying to solve, mainly due to a long line of communication and a team that might not share all of the same goals.
2. Creativity
While having creative teams in-house means the employees are fully immersed in the brand culture, a challenge is presented when the need for an outside perspective comes into play.
This will always remain as a benefit for external agencies as they can work with a range of clients, they are exposed to new ideas from different business models and many media publishers - only being able to share ideas amongst colleagues will be a limitation for some in-house teams.
However, by having an in-house creative team, the branding that is promoted will always be in line with the company vision, mission, and goals.
3. Forefront of innovation
Agencies are continuously evolving thanks to the wealth of talent, clients, and experiences they are exposed to. Advertisers that choose to work with agencies will have access to cutting edge strategy, technology, and people - which is another advantage for agencies - although, brands in-housing are not far behind.
In-housing for 2020:
In the run-up to 2020, the advertising landscape will likely be more focused on content marketing to ensure a less intrusive experience for consumers. Marketers will need to ensure this new strategy is developed as advertising needs to concentrate more on delivering content and native experiences to consumers who are even more dependent on mobiles devices and ad blocking technology.
Despite the growing complexity of technology, 2020 might see more brands try to bring programmatic buying in-house as the advantages of lower costs and gaining more control over data will continue to exceed outsourcing.
To match the fast pace of consumer conversations, brands are required to produce a large volume of content with quick turnarounds, and largely because of this, brands are considering moving more elements of their business in-house for the new year. As a result, to stay competitive, agencies will need to refocus and redefine what they have to offer. At the end of the day, clients will always want strategy, ideas, and skills. It is crucial to take a look at your business and consider what do you have to offer that few others can compete against?
What can we do?
At CLICKON, we work on fusing workflow technology with production craft so that agencies can halve the time it takes to create and distribute content. While we specialise in the production of personalised and episodic video content, we offer an end to end service of creative, production, and distribution all from our agile teams, in-house.
In-housing should not be held as a binary decision. The main thing to keep in mind for both agencies and in-house businesses is the aim to communicate brand messages creatively and effectively so that the correct impact is delivered to consumers.
Advertisers need to reflect on what they want to achieve as a business. While in-housing is a trend that appears to be dominating, agencies should not see it as a threat, they should instead, embrace the change so that they can become part of the solution - the time has come for clients and agencies to come to a new understanding.
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