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UK advertisers consider in-house merits

News, 23 March 2017
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LONDON: A growing need for agility and ongoing concerns about data confidentiality and transparency are motivating a significant proportion of UK advertisers to find in-house and on-site solutions for their marketing strategies, a new study has found.

According to advertising trade body ISBA, about two-thirds of advertisers are shifting towards stronger relationships with fewer suppliers and close to half of brands now have, or are considering establishing, an on-site (45%) or in-house (44%) capability.

On-site refers to an external partner working alongside a brand's marketing team while in-house involves a brand creating its own team to carry out the duties typically done by an external agency.

The research, which was carried out in partnership with OLIVER, an on-site agency specialist, and research firm Future Thinking, was based on a poll of ISBA members that took place between December 2016 and February 2017.

It followed a series of studies conducted in the US by the Association of National Advertisers, which found 58% of advertisers were shifting towards in-house or on-site in 2013.

According to the ISBA findings, a similar trend appears to be taking place in the UK where two-thirds (68%) of respondents expressed frustration with the time it takes external agencies to make decisions or turn around briefs. This dropped to 8% for on-site and 20% for in-house agencies.

When asked about the benefits of an on-site agency, UK advertisers cited speed and agility (86%), improved cost efficiencies (68%), collaboration (64%), and the operational control that comes with working in the same building (54%). They also favoured the institutional knowledge (21%) and strategic capabilities (21%) that agencies offer.

For in-house, respondents cited improved brand expertise (61%), collaboration (52%), operational control (55%), and creative expertise (33%) as the main advantages.

"Agility is increasingly a big issue for clients, especially in relation to digital activities, so it is no surprise that we are seeing a rise in these types of activities being handled in-house and particularly with on-site agencies," said Debbie Morrison, ISBA's Director of Consultancy and Best Practice.

"Adapting to the new demands that marketers have should be a key priority for agencies as they encounter an increasingly competitive market," she added.

If there is indeed a growing trend in the UK towards in-house and on-site capabilities, then UK marketers are likely to benefit from learning about PepsiCo's experience in the USA.

Speaking at the National Advertisers' 2017 Media Conference earlier this month, Ellen Healy, PepsiCo's Senior Marketing Director told delegates that its creation of an in-house business unit had improved efficiency and quickened the process of content creation.

"We still are working with our creative agencies," she said. "But we're also doing some stuff independently [with increased] efficiencies and speed to market."

Further insights about in-house agencies and how traditional agencies need to evolve to meet modern demands also can be found in a recent Warc Best Practice paper.

Data sourced from ISBA, OLIVER; additional content by Warc staff

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