Why in-housing is good for agencies
The in-vogue practice of clients taking on the jobs they might have traditionally paid an agency to carry out is on the rise.
Indeed, last year the IAB reported that nearly a fifth of marketers had taken programmatic buying in-house, while the US-based Association of National Advertisers (ANA) reports that nearly 80% of its members have some form of in-house function, a number which has rapidly grown over the last 18 months.
In the UK, ISBA reckons around 45% of advertisers are taking work away from agencies and doing it themselves.
In-housing has, therefore, been labelled by some as a threat to already squeezed media agencies, but the reality is that it’s actually a pretty good thing: by offloading lower-end tasks back to the client it frees the agency to work on the much more important, bigger picture stuff.
That was one of the prevailing views from The Future of Brands event this month, which canvassed the opinions of both clients and agencies now either wedded to or advocating the practice.
“The breadth of agencies we are now working with is expanding, but so is what we in-house,” says Annabel Venner, CMO of DirectAsia and Hiscox Global Brand Director.
“Brands are doing it because they believe they can do certain things quicker, faster and better than agencies can.”
Venner adds that the board now expected marketing teams to function with genuine agility – in part to match the fast-paced nature of changing consumer media and buying habits – adding to a pressure to do things quickly.
“If agencies cant deliver that you will in-house,” she says.
However, far from disintermediate them, this is what agencies need and should be viewed as a pragmatic approach to dealing with a complex and changing world.
“We’re only in-housing the lower value items,” says Venner. “The ones we feel we can do better and faster, while using our agencies to deliver better, bigger and more creative work for us. The agencies we work with understand that.”
Dino Myers-Lamptey, UK managing director of Mediahub, part of the MullenLowe group, agrees and says he has advised some clients to in-house certain parts of the media plan.
Besides, Myers-Lamptey says, there are just some things that don’t make agencies much money, so if the client can do them in-house, the agency can reallocate resources to better serve them.
“To that end, it’s actually allowing us to focus on the bigger stuff. And if you can bring the agency and in-house teams together and identify who is strongest at what, then you will find a lot of flexibility.”
A far cry from Mediatel’s reports last year that suggested – based on agency comments – that in-housing was the ‘biggest threat‘ they currently face?
Perhaps so. Especially when the talent factor is considered – clients simply can’t in-house the experts that staff the best agencies. So as long as adland can retain its best people, then it seems fair to assume a hybrid model that divvies tasks between agency and client is the one set to define the medium-term.