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July 19, 2019
Why Are More Brands Taking Marketing In-House?
 
Brands taking marketing, advertising, media and communications in-house is a growing trend. 

The Association of National Advertisers (ANA) reports that 78 percent of their members had an in-house agency in 2018, up from just 58 percent in 2013 and 42 percent a decade earlier in 2008. They also document growth in in-house agencies’ workload, much of which has migrated from external agencies and includes such in-demand tasks as programmatic buying, video production and data science. 
 
Traditionally, in-house agencies were considered second-rate and used to produce sales materials, collateral, trade or retail POS materials and quick turnaround jobs. But today, in-house teams are competing with agencies and consultants for heavy lifting brand assignments.
 
Why the change?
 
The short answer is costs and frustration with external resources. There is a growing perception that agencies can’t keep up with changing technologies and competitive marketplace developments. Brands are fed up with fees that are not transparent, teams that don’t really get their business and doubts about media costs, fraud and performance measurement. 
 
Changes in the reputations of agencies combined with a generally accepted free agent mentality among the creative class, makes recruiting a quality in-house team easier than ever. Identify the tasks required. Hire a leader with a strong background and network. Open up and recruit some FTEs. Find space. And, bingo, you have an in-house agency.
 
Consider 4 factors driving this trend.
 
Cost Savings. In-house staff aren’t marked up which for many brands is an immediate savings of roughly 30 percent. Brands can be competitive on compensation and still yield cost benefits. JP Morgan Chase’s Inner Circle agency claims to have saved $20 million dollars since 2015 as a result of bringing marketing tasks in house.
 
Speed. The agency creative process is believed to be slow and cumbersome. This is not an entirely fair criticism, but agencies generally won’t win any prizes for process design or process improvements. As project management tools, like Agile, enter the marketing and martech space, brands will put a premium on transparency, speed and throughput. Agencies will struggle to keep up. 
 
Control. In a customer-centric universe, brands want to control the torrents of data generated by engagement in multiple channels, purchase histories, CRM interactions and social media activity. Pulling these tasks in-house tied to an analytics or data science capability makes brands the master of their own fate. 
 
Increasingly, brands are reluctant to share this data or rely on a daisy chain of agencies, consultants or vendors to collect, organize, comply, manage, analyze, generate insights and report progress. The desire for greater control is driven by skepticism about agencies’ ability to forecast and anticipate new or innovative uses of technology and data and the desire to use these assets more automatically, nimbly and effectively.
 
Brand intimacy. In-house staffers understand brand fundamentals better, have closer ties to internal departments and stakeholders, know the general business plan better and are singularly dedicated to advancing their brands. 
 
In contrast, agency teams are rarely fully included in a brand’s strategy and business development process, often don’t have the right access or network within a client organization and are frequently working on more than one account. They get it but they don’t get the whole picture.  
 
It’s no surprise that the ANA is carefully monitoring this trend by sponsoring conferences and surveying brands. Most brands (90 percent of respondents) with an in-house capability, retain external agencies, though more than half of the workload is assigned in-house. The changing technology and data landscape combined with intense competition for creative, strategic and management talent plus rapidly changing customer expectations in both B2C and B2B markets, give brands reason to build in-house teams and shift mission critical work away from agency partners. Look for agencies and consultancies to try to reverse this trend by creating new capabilities organically and by acquisition.
 

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Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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