In-housing shows no sign of abating, but questions around capability, scale, and expertise continue to surround the topic. Henry Daglish, founder of the independent media agency Bountiful Cow, offers his take on the upsides and downsides of in-housing.
The rise of in-housing shows no sign of abating. Last year, the IAB reported that nearly one in five marketers have taken programmatic buying in-house amid concerns about transparency and controls and advances in technology.
Other companies, meanwhile, also see outsourcing their marketing as an expense they could better manage with an in-house team.
But critics of in-housing point out that in-house agencies lack strategic thinking and expertise.
In-housing is hardly a phenomenon that is new to our industry. I think personally I’ve been having conversations with clients for years on whether they want to, or should, do it.
The big difference is the scale on which it is now happening and affecting some of the larger clients and organisation within the typical agency network model (most of which have spent years investing in their own in-house agency capabilities)…and there in creates a clear conflict of interest between client and agency.
The other big question has to be whether clients are doing this because they want to cut costs, don’t value or trust their media agency’s capability or believe that they can do a better job themselves.
I’d hazard a guess that it’s a combination of all of the above.
Given that we work at the other end of the spectrum, the reality is that 80% of our scale-up clients have been in-housing from the start and as such our role has seen some level of consulting on digital channels.
But more so, a much higher level strategic and communications planning that helps our clients stretch into the broader world of paid communications.
To that end, we actually already see the significant benefit of in-housing to our business model, add that to the fact that we don’t have any legacy or silo’d digital structure to our business and it’s largely a win win for us.
All that said, I do think that in-housing for clients can present a significant threat to how forward-facing and engaged their actual digital capabilities can be.
The beauty of an agency model is that, in theory, impartial learnings and best practice across multiple clients and sectors can be imparted on any client in real time.
The likes of Google and Facebook are counteracting this by beefing up their own direct to client and sector-by-sector specialisms, but this in itself is extremely dangerous as it’s a matter of time before Facebook and Google’s in-house client teams start to drink the Kool-Aid.
The role of the agency is to deliver complete and utter impartiality in this space – it’s a priceless asset to any client amidst a world where we see the ever-increasing power of the duopoly alongside agencies desperately trying to desperately defend revenue and maintain direct engagement with client’s businesses.
Only the bravest agencies, with the best people and an unequivocal commitment to delivering impartial advice will win.
I also believe that there’s a further risk to in-housing which extends to what our industry sadly calls the ‘traditional channels’.
In the wrong hands the beauty of mass exposure, strong engagement but comparatively untargeted channels can be easily overlooked and undervalued.
And with that would come the demise of much of the true power of advertising and its ability to positively shape and dent culture. Yet again it becomes the responsibility of the media agency to keep this in check.
And with all of that in mind, I believe that in-housing actually makes the role of the media agency more important than it has ever been.
The question is how many companies have the commitment to invest properly in senior strategic and consultative talent that can challenge and guide in-house client teams?
Can they do this whilst also having released themselves of a legacy structure that inherently works against helping clients to in-house should they believe it is firmly in their business’ performance interest to do so?
To be clear, this isn’t about creating some sort of new media agency model – it’s actually about agencies getting paid for doing what they should have always done: providing proper business level strategic leadership and impartial advice that is only ever in the interest of the client’s business.
From where I sit I don’t think that it’s something that’s hard to do and in-housing is another catalyst in making it happen across the industry.