Clients are abandoning the needed for advertising and marketing agencies deciding to bring it all in house. But why? This question I think is fairly obvious money why spend missions of dollars a year paying someone else to do your advertising when you can create your own team who you can dictate, to create exactly what you want every time. But looking at this from an agency side beside the fact that agencies need clients to operate do clients realize what they are getting themselves into?
First what is an in-house agency?
An in house agency is usually owned and operated by its one and only client the company doing the advertising. Instead of outsourcing its campaigns are handled by itself. Some advertising may still be directed to outside agencies, but usually on a per-project basis. This has mainly been due to Ad agencies charging a lot of money for projects they don’t know the product or service as well as the in-house staff, and they are split between many different clients. With an in-house agency, the client is getting 100% dedication, no overtime or rush charges, subject matter experts, and employees who directly benefit from the company doing well. It’s cheaper, it’s faster, and these days, it’s way easier to get very talented people to come client side.
Big Companies like Apple and Google are attracting big names from advertising the stigma that was once attached to “selling out” and promoting only one brand has almost gone. Most in house agencies have come into their own winning awards and creating their own identity some of the more famous are
- Coca-Cola’s Content Factory
- Best Buy’s Yellow Tag Productions
- The BBC’s BBC Creative
“Once considered to be the red-headed stepchild of the agency world is now very much legitimate.”
But why are agencies making the big shift?
Cost saving as mentioned is the main reason as well as complete control and flexibility not available with the traditional agency model. Client’s trust toward agencies has been deteriorating with many agencies being investigated for bad business practises and a lack of transparency. But a lack of experience leads to in-house agencies making risky moves that rarely pay off. Pepsi recently developed a campaign encapsulating the don’ts of advertising the Kendal Jenner campaign will go down as one of the worst ad campaigns ever developed being labelled as tone deaf and out of touch the campaign was pulled as fast as it was distributed but the reputation took a hell of a hit. Despite this experts say the in-house model will continue to grow as client look for greater control over its media option.
The rise of the in-house has created a “us verses them” mentality across both traditional and in-house. In house agencies are seen as impure and are disliked as mentioned heavily by traditional agencies this is because the In-house model means
- They only work on one client, which pays your salary. it’s not a challenging.
- They don’t have to pitch, or work hard to get your accounts.
- They work regular 9-5 hours. That’s not real advertising.
- They don’t do good work. It’s mostly mediocre.
- They can only attract low-grade talent. The real professionals work in traditional shops.
This view is agreed on in many cases by those who work within a in-house agency but the counter augment paints a picture that is very desirable to most in the industry.
- There’s a great work-life balance. Who wants to work 18 hours a day?
- You are working to promote your own products and services.
- Your campaign success equates directly to your company’s success.
- You don’t have to keep pitching. You have the work, and can focus on it.
- You CAN do award-winning work, without the stress and heartache.
- You have a much faster approval process.
- You have much more influence on the campaigns being produced.
- Layoffsdue to account losses are not something to worry about.
Companies that are debating weather they create an in-house agency or continue with their traditional agency, experts insists that creative control shouldn’t be a consideration when deciding,
“Speed to market for new concepts and business models is blinding, novel new strategies and tactics don’t remain secrets for very long. What every company should invest in, to ensure long-lasting success, is a team with a diverse set of creative aptitudes. Anything short of that will not fare well against competition.”
The big shift isn’t new around the world but Australia where the shift is the looming evil in the shadows ready to swallow up any and every client out there. The newest victim to the in house monster in Optus. Yes Agency is now up and running working closely with M&C Saatchi. It come after With Collective dropped the account to work with Foxtel there is talk that this will affect The Works and AKQA who also work on the Optus account.
“Optus will continue to have a significant agency roster but with Yes Agency there will be more opportunities for quick, tactical content. We hope to be incredibly agile in comparison to the traditional agency model.”
This move has cast eyes over other big Australian company as to who is going to be next, has Optus set a bench mark for other Australian companies to move in-house?
Are in-house agencies here to stay?
Simply put yes. The in-house agency model will continue to grow and in a world where clients are tightening their budgets any way that they can. In my opinion the In-house model works if the right talent is found to carry it through. The biggest yard stick is the fact that in-house agencies are winning awards, the American restaurant chain Chipotle is one example where in 2010 they decided to go alone breaking away from their traditional agency, in turn the in-house agency have gone on to win multiple awards. Adage has event created the in-house agency of the year category in their annual award showcase featuring some of the best in-house campaigns the 2017 winner intel’s in-house agency completely changed the brand image brining the likes of lady gaga. The company has stated that the move isn’t only finical that the change to in-house was because they have a more innate understanding of technology.
“We have visibility to all the things people are doing with our technology—how it works, and how to apply it—that an external agency can never have. Being on the inside lets us stay on top.”
Within a changing world the rise of the in-house agency is expected. Where it stops know one knows where will it end? How big dose a company need to be before it takes it advertising needs in house? These question will most likely be answered over the next few years but it is something that needs to be watched by the whole industry.