Why Your Company Should Move Advertising Operations In-house
It’s a question many advertising and marketing leaders have been asking themselves: should they outsource their marketing efforts to an ad agency or in-house? Many companies have great experiences with their ad agencies, but for those who don’t or are under pressure from leadership to generate results and optimize budget, it’s something they may consider. It’s not an easy decision to make and can mean overhauling whole teams to make it happen; so it’s worth weighing up the pros and cons before making the jump.
In this blog we’ll cover the advantages and disadvantages of moving advertising operations in-house.
What is an In-House Ad Agency?
Companies that have their own ad agencies, built up of the components of a traditional agency but hosted in-house and owned by the parent company, are called in-house ad agencies. Some examples of companies with in-house ad agencies are Netflix, Coca Cola, and Lego.
Advantages of In-House Advertising
Let's take a look at five benefits of moving advertising operations in-house.
Improved brand connection:In-house teams are more likely to be culturally invested in the brand and the brand’s success. This is not a one-off project but an ongoing process that will affect the mid-term and long-term. Agencies may lack personal and cultural investment.
Transparency: In-housing allows marketing teams to gain more clarity over the decisions you make and your team's agility and digital focus increases. 56% of marketers admitted that their team's creativity increased due to in-housing. You also have more control of your data to help you make better-informed decisions.
Cost savings and better ROI: In-house teams deliver cost benefits, as they have more time to work on an activity and are already on budget. Agencies may have flat day rates or project fees, but the time an in-house team can spend on projects is generally higher than that of an agency team. However, in-house projects must be flexible and ready to adapt to change in order to be cost efficient. Additionally, 63% of marketers have seen positive change in ROI since taking on in-housing.
Control of data and Intellectual Property: The protection of intellectual property can be a crucial reason businesses decide to build an in-house team. That way, all key learnings and knowledge are retained within the company, allowing for continuity and growth in future campaigns without worrying about third parties.
Speed and integration: If we've learned anything from the pandemic, it can be really frustrating to have marathon-like online calls to discuss even the most basic processes before having to check schedules and plan any feedback. It can be hard for agencies to overcome silos and liaise with company stakeholders efficiently. In-housing can happen when you want it to, and since everyone is on the same page, smoother collaboration will make things work out faster. Teams are also better positioned to communicate and create rapport with stakeholders, reach common objectives, and escalate issues.
Disadvantages of In-House Advertising
Cost of Technology: Agencies often have access to more industry-leading tools. They're not always cheap, but they can make a significant difference between success and failure. Contracting for pieces of technology can be expensive, and these expenses can determine whether or not your company carries out an activity efficiently. On the other hand, agencies invest in these technologies and carry the cost across a broad client base. CMOs must be prepared to liaise with CTOs and spend similar amounts. The likelihood is that technology and advertising will increasingly work hand-in-hand.
Staffing: Technology is essential, but only if used correctly and by the right people. Businesses face several challenges requiring a wide array of expertise. Agencies have several experts across multiple projects. You need to make sure you have adequate staff to meet your objectives. To do this, you must identify the resources you need and the level of expertise required. In agile marketing teams, you must also know how much time they'll dedicate to key roles and what they'll spend the rest of their time doing. Finding the right staff has its challenges - ask any hiring manager. As remote work opens the pool to fish for talent globally, agencies and businesses must compete to attract the best talent by guaranteeing career development, retaining staff to gain an ROI, finding the right talent outside localized digital hubs, and spending on training if needed.
Lack of Experience and Resources: Agency comes with experience in the field and with different kinds of companies, many of them similar to yours, so they probably know how to create a strategy that suits you. This wealth of experience and resources means they have a tried and tested approach to complete tasks swiftly.
Perspective: It's easy to be blinded by subjectivity. More worrisome, people can be easily bogged down by old vices and narrow-minded thought processes that impede innovation. In-house ad teams run the risk of becoming so habituated to old habits that they struggle to think outside the box. Getting input from teams who have a fresh point of view and work with an array of clients can help them identify ideas or strategies that the team might not have otherwise thought of. Agencies force themselves to keep up with new trends in order to stay competitive. In-house advertising teams must do the same to avoid being left behind.
Guaranteeing High Performance: Agencies may have experience with similar projects. But, even then, the solution is clear: You can switch to another one. However, if your team isn’t delivering the right results, time is lost and you can’t replace the whole staff: Especially if it was embarking on a project that in-house teams weren’t prepared for. Rectifying errors with your in-house advertising team is worthwhile because it is an efficient way to learn, but it can be slow and costly. The path to success isn’t always smooth.
In conclusion
Deciding whether to move all advertising in-house or not is a big decision that is unique to each company/team. If you do choose to make the move, we recommend moving slowly and role by role to see if you like how things work or if your performance is better sticking with your ad agency. Alternatively, if you've read these pros and cons and aren't confident you want to move everything in-house, but aren't happy with the visibility you get from your agency partners, adopt a platform like ours where you can see and collaborate on campaigns with your agencies. Giving you more control without overhauling your team and dealing with the negative aspects of in-housing.
