Traditionally, brands have used a mix of agencies to handle key marketing functions such as creative development, media buying, and data analytics. Many companies are now looking to build internal teams to handle functions such as media buying and data analytics in a quest to drive cost savings and improve results.
Programmatic media buying has been a particular focus for marketers to bring in-house with 84% of companies looking to increase their control over their programmatic media campaigns according to Infectious Media. Adweek reports major brands (including Procter & Gamble and American Express) have shifted their programmatic ad spend in-house.
What’s driving this trend?
While driving efficiency is a big part of the motivation behind this shift, the primary driver is a quest by companies to play a more active role in defining their digital destiny.
Companies are looking to drive cost-savings by cutting out the middleman (agencies) to work directly with digital media platforms such as Google and Facebook. More crucially, businesses want to exert greater control over their customers’ digital brand experience and the first-party data that emanates from each touchpoint in the user journey.
Winners and losers
The losers so far have been large, established ad agency networks such as WPP and Publicis who are seeing growth stall.
All the while, top consultancy firms like Accenture and Deloitte are growing their revenue by leveraging their role as trusted advisors to the C-Suite to become the partner of choice for companies seeking to build out the capability to run digital campaigns internally. These consultancies are helping companies train their staff to run digital marketing campaigns as well as providing advice on how to build the technology stack that is needed to provide a best-in-class customer experience and maximize the benefits of the customer data companies are collecting.
What’s the right choice for your business?
There is no one-size-fits-all solution to designing an organization’s mix of internal and external marketing resources. Companies can choose from a variety of owned, outsourced, and hybrid models based on the scale of brand programming and the level of ongoing support that will be required.
Key questions C-Suite leaders should consider when determining their mix or internal and external resources include:
- Which functions are best-suited to be performed in-house and which ones can be best-handled by a third-party partner?
- What is the projected cost of building and maintaining selected marketing capabilities in-house vs. the projected savings?
- Can you successfully attract the right talent to lead an in-house digital marketing practice?
- How will your technology infrastructure needs evolve as you build this in-house capability and what investment will be required?
Don’t undervalue agency talent and expertise
While many companies have grown frustrated with the agency model, it’s easy to overlook the critical role outside agencies play in helping craft and amplify compelling brand experiences and providing clients with an outside point of view, informed by experience across clients and categories.
Many marketing functions can be successfully executed internally by brands but key services such as creative may be best considered as the province of agencies As Antonio Lucio, HP’s CMO, said on Digiday’s Starting Out podcast “We have built significant insights and analytics capabilies [but] I don’t think moving creatives in-house is a sustainable model over time.”
Stay open to hybrid solutions
While there can be significant advantages to bringing certain marketing functions in-house, businesses may overestimate the efficiencies that may be achieved as compared to the cost of developing and maintaining an internal digital marketing practice. Companies should be realistic in assessing their organizational readiness to successfully execute marketing functions from both a technical and cultural standpoint.
Companies should remain flexible and consider a variety of options as they define their mix or internal and external marketing resources. For example, hybrid structures under which companies develop the internal capability to manage certain aspects of marketing while they leverage the agility, experience, and deep reservoir of talent that consultants and agencies provide to fulfill other jobs, can be a great option for many businesses seeking to maximize ROI from their digital marketing.
Seek counsel in digital transformation
Brands can ensure they make the right decisions and plan for success by partnering with a digital consultant to help determine which digital marketing functions to consider bringing in-house, planning talent and technology requirements, and ensuring internal marketing teams successfully integrate with outside agencies as part of a brand’s larger “marketing stack.”