Brands now have the opportunity to in-house their digital marketing technology as well as campaign execution, but does that mean they always should?
In-housing is a hot topic in digital marketing, with brands building out teams to manage campaigns whilst vendors disintermediate agencies by selling ad technology direct to advertisers.
Running a technology stack and executing campaigns without paying agency fees may sound tempting, but there are some simple questions companies need to answer first. Ultimately, these boil down to what a company is hoping to gain and whether it is in a position to deliver those benefits.
However, if a company is motivated by saving money, they will be in for a shock as the technology comes with a hefty price tag. Paying an agency each month can obscure the high cost of the tech stack in use and the price of discounted premium media.
One of the crucial aspects that tends to be forgotten is not just the price of the technology and media but also the cost of hiring, training and retaining the people required to operate it.
In our experience, the skills gap and the cost of trying to get right people leads to many businesses deciding to cease in-housing and go back to an agency model, or – increasingly – tapping into agency skill sets through a hybrid model.
For in-housing to be a success there are four areas – we call them pillars – which need to be addressed: strategy; people; technology and measurement.
Taking back control of the data
If the desire is to take back control of data, and possibly campaign execution, so customers are offered a better experience, you have a good basis to move forward.
If a business is clear that it wants to improve its understanding of its customers and to offer them a better service, then in-housing is a viable option, particularly with what it means for data.
Companies intuitively understand that it’s a lot better for them to control their customers’ information than a third party. The European-wide GDPR legislation has raised questions over whether marketing partners are looking after CRM information properly, and many brands now consider the risk of a breach or loss of data too high to outsource.
A note of caution: one of the biggest mistakes we see is a tendency to do too much too soon. Buying enterprise-level tech but not investing in the correct implementation leads to execution that is based on incorrect insights. Likewise, investment in tech when the focus should be on media and the building up data for insights is the wrong balance.
The ability to execute campaigns
Once a company can organise and analyse data properly through any in-housed systems it owns, it can then consider some campaign execution. Just as with bringing the technology in-house, there are big decisions to be made over whether the business has the right skills to operate the tech stack. Training and retaining people with specific skills in digital marketing can be hugely expensive, so it’s not something that can be taken lightly.
The most common place to start executing campaigns is paid search, because a lot of companies have been running their own search projects for several years and so have some in-house experience. It’s also a channel that is losing some of its mystique, as expert approaches to maximise campaigns are being built into the software.
With display advertising the story is somewhat different: brands need to remember that inventory will come with a major discount through an agency and, again, expert staff are in high demand and, usually, based in London.
When it comes to programmatic, it pays dividends to heed the advice ‘just because you can, doesn’t mean you should.’ Companies can tap into programmatic advertising networks through demand-side platforms (DSPs), but do they have the resource to execute it properly?
The chain of experts on call to execute a programmatic campaign in an agency from planning, through ad ops, to trade desk, makes it that much harder to build an effective in-house team.
Metrics need to be put in place to ensure a company knows whether it is delivering the intended business benefits or not. It can be hard for a business to know what “good” actually looks like and so it’s an area where working with outside experts, who work across multiple clients, makes sense.
It is for all these reasons that mean many forward-looking advertisers are pioneering a hybrid model: they want the best of all worlds – the ability to take ownership of the data and tech stacks, with the luxury of having access to the brightest and best digital and data experts.
Most businesses will find data, and then perhaps analytics, is a good starting point because it makes sense to control and shape customer insight. However, any subsequent steps will need businesses to ask themselves if taking control of campaigns is worth the potential extra cost and new requirement to hire and retain the necessary skills.
Nobody’s quite sure what this will look like in the long run, but businesses should not over-obsess in-housing everything: instead bring in what makes sense and get support with the rest.
That support will require a new breed of agency model because the days of paying massive retainers for an inflexible set of services are drawing to an end. To support the rise of clients wanting this best-of-both approach, agencies must be more flexible about working on a client’s systems and source the technology, people and media a business cannot provide as efficiently for itself.