How to win at in-housing

Share this post

In-housing has been a hot topic of discussion for the media industry for the last few years. Many major brands such as Vodafone, AB InBev and Clorox have taken elements of their business in-house. This is, on the face of it, a threat to the agency groups, some of whom have responded by creating in-housing consultancies to help their clients take their business in house. What are the advantages of in-housing, and what considerations should advertisers bear in mind?

 

Why in-housing?

Over the last two or three years, in-housing has become increasingly common: many of the world’s biggest advertisers now see it as a necessity. In 2018, the ANA found that 78% of its members had in-house agencies, up from 58% in 2013. In-housing takes many different forms, and there is no agreed definition – from producing creative for social media to taking all media buying activity in-house, it covers a full gamut of specialities and expertise.

  

So why is it happening? For many brands, the answer is straightforward: they want more control. According to Digiday research, that was the reason that 38% of marketers gave for taking activity in house. It gives them more control over their operations, their data, regulatory issues such as GDPR, measurement, performance and, ultimately, their spend.  Data is of particular relevance in the in-housing debate: with an increased amount of consumer data available, the potential for improved messaging increases hugely, and it is attractive for brands to have more visibility over how it is used. This is of course especially important for regulatory purposes – with GDPR and now CCPA, controlling what data is used and how messaging shows up is more important than ever. In an age of fake news and privacy and brand safety concerns, control of data is key to a better understanding of the consumer journey and ensuring regulatory adherence.  

Another important factor in the in-housing conversation is, of course, the matter of trust. Since the release of the ANA’s K2 report in 2016 which shone a light on agency transparency, trust between advertisers and their agencies has decreased sharply, particularly in more complex and ‘shady’ areas such as programmatic. The reaction for many has been to take at least some of their activity in-house, thereby taking back control and, in the long run, driving cost efficiencies. However, if the main reason for bringing activity in-house is transparency, a cheaper and more straightforward option could be to bring the adtech stack in-house and allow the media agency to work with it.

What does in-housing mean for the client-agency relationship?

One of the reasons that in-housing has remained such a big topic of conversation has been the impact that it has had on agencies, particularly the big six holding companies who are losing major pieces of business. WPP, for example, suffered the loss of Walmart’s digital advertising business when the retailer decided to take it in-house, while Vodafone, AB InBev, Clorox, Unilever and American Express have all removed some parts of their activity from their agencies. This has caused some real soul-searching for agencies: it was one of new WPP CEO Mark Read’s key priorities when he took the job in 2018, and several have established in-housing consultancies, such as Dentsu Aegis agency Isobar’s new ‘Accelerate’ offering. 

In reality, there will always be a place for agencies – indeed, many argue that it is helping to improve the health of the client-agency relationship. Agencies hold a huge amount of expertise and clout which is invaluable, particularly when it comes to media buying: indeed, Vodafone tried to bring media buying in-house but in April announced a $500m global review for its media planning and buying, suggesting that it hadn’t gone as well as envisaged. 

Even for those pieces of business which have been successfully in-housed, successful partnerships are possible and even common. AB InBev, for example, took smaller creative activity, such as social media, in-house, freeing up time for their creative agency partner to focus on the bigger jobs such as the Super Bowl. 

What should advertisers looking to take their business in-house look out for?

In-housing, if done with the right care and attention, can be a great success and drive significant cost efficiencies. However, there are some red flags to watch out for. It can lead a siloed approach that doesn’t enjoy the benefit of a holistic market or strategy view, particularly if communications channels with the agency running other parts of the business aren’t sufficiently open and free-flowing. It can also be very expensive and complex: setting up adtech stacks for programmatic in-housing, for example, and finding and retaining the right talent. Talent retention can be a particular challenge as, without due care, teams can become isolated from the latest innovation and inspiration from other categories. Brands looking at in-housing must interrogate their motives and objective and ensure that they are certain about what they are trying to achieve. They must also stay committed to learning and development in order to ensure teams stay inspired and up to date on the latest developments.

ECI Media Management can help our clients navigate the in-housing process and ensure that they are fully aware of the implications and important considerations. Please feel free to  to discuss how we can support you, and look at our top 10 considerations for taking your media buying in-house.

Image: Shutterstock

  1. The streaming revolution: should marketers be worried about ad-free streaming? December 4, 2019 - The streaming revolution has gained momentum with the launch of services from major entertainment companies. Should marketers worry about the rise of ad-free streaming? Read more
  2. Facebook: the changing fortunes of a tech titan November 27, 2019 - Facebook seems to ricochet from one scandal to the next: what can it do to save its reputation, and is it still an efficient, brand-safe platform? Read more
  3. What does TV fragmentation mean for US marketers? November 15, 2019 - ECI Media Management’s US Business Director, Victoria Potter, looks at the changing TV landscape and explores the ramifications. Read more
  4. Is Snap really a threat to the Google-Facebook duopoly? November 13, 2019 - It's not just Amazon snapping at the heels of Google and Facebook. Snap's ad business enjoyed faster growth than the industry giants'. Read more
  5. How to win at in-housing November 6, 2019 - In-housing has been a hot topic for the ad industry for several years and can be highly effective for advertisers, but it should be approached with caution. Read more

Get in touch

To find out how ECI Media Management can help you drive higher media value, contact [email protected] or complete the form below.


Be the first to get the latest news from ECI

Follow ECI on LinkedIn Follow
Share this post