While brands can benefit from in-housing some of the work their agencies are doing at the moment, sometimes it can go horribly wrong. APR Consulting Company, Ebiquity and The Observatory International explain.
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Many WFA members are considering in-housing some of the work that is currently carried out by agencies. The potential benefits include greater control, transparency and a marketing organisation that can be more responsive to events.
The risk is that a badly managed in-housing process will deliver none of the above. Three of the WFA’s strategic partners - APR Consulting Company, Ebiquity and The Observatory International - explain how to avoid the pitfalls in this joint opinion piece.
In-housing is hot right now. So hot it’s likely to encourage marketing organisations to action plans that haven’t always been fully thought through. Because while there are good reasons to take some work in-house, there are also circumstances in which it can go horribly wrong.
“Before deciding to bring any marketing technology and services under direct control, marketers should carefully consider which elements they might bring in-house, why they want to do so, and what the consequences might be. The decision to in-house or outsource is not black and white, there are many shades of grey in between,” says Christian Polman, Chief Strategy Officer at Ebiquity.
Part of the problem is that the term “in-housing” covers a range of options; from managing images and content for websites through to full production, data science and marketing management capabilities. In-housing can also include embedded agencies, whether creative, media, or otherwise. Each requires a different level of commitment and internal expertise.
Danny Whybrow, SVP Managing Director at APR Consulting Company, says: “When considering this subject, the question is never as straightforward as ‘is in-housing right for me?’ First, it’s important to define with absolute clarity in-house what? So, a clear idea of the type of content that in-house capability would deliver – the what – is essential to everything from staffing and equipment choices to managing marketers’ expectations. Typically, the why involves combination of greater control, lower cost and faster speed to market.”
Part of the issue is that there are five key assumptions that are often wrong:
This is a cost-saving measure
In-housing is likely to lead to a long-term increase in the company’s fixed cost base. For example, in-housing makes it more difficult to flex resource and therefore cost up and down in times of economic / business fluctuation.
“If you are likely to want to tailor your resources year by year depending on business performance, then you need to ensure that the in-house investment only covers work that will always be needed,” says Christine Downton, Senior Consultant at The Observatory International.
This will make us cutting edge
If your marketing strategy needs you to be cutting edge, innovative and / or highly creative then external agencies are likely to offer the best solution. In-house agencies don’t generally attract the best talent – particularly when it comes to strategists, creatives and programmatic expertise. This type of talent also needs the stimulus of working with different clients and categories to do their best work.
It’ll be easier to agree on scope
What often happens is that business units and teams are not clear on the scope and processes of the in-house team. We have seen clients who are far more demanding on in-house teams than they would be with their agency partners, which can lead to poor results and a high staff turnover.
We’ll have greater oversight or management
Unfortunately, there is often no single point of robust oversight and full-time management for in-house resource. With no limits on what work can be pushed in-house, other business units and other functional areas start to use it, leading to overstretch. Without clear management, the business model can also become complicated – charging time and costs to some but not to others.
It’ll put pressure on external partners
Don’t try and use an in-house agency to drive down costs with your existing external agency partners. Creating value is important – but value is not the same as cost. The in-house agency should be part of a well-run roster.
“The winners will be those who define a wholly-connected ecosystem of both in-house and external resources to provide the right balance. Keeping any in-house operation connected to external partners and resources is crucial to avoiding duplication of asset production,” says Jillian Gibbs, Founder and Global CEO of APR Consulting Company.
The rise of digital has encouraged many brands to think differently. The need for content, control over data, and direct consumer relationships has encouraged the exploration of in-house options.
“Many companies will end up doing some work that might have been considered agency territory a few years ago but decisions about what comes in-house should not be taken lightly. Rules, lines of responsibility and clear ways of working are essential for success,” concludes Christine Downton from The Observatory International.
The views expressed in this opinion article belong to APR Consulting Company, Ebiquity and The Observatory International.