Agencies don’t need to be defensive about in-housing

GroupM Australia & New Zealand CEO Mark Lollback
By GroupM Australia & New Zealand CEO Mark Lollback | 30 October 2019
Mark Lollback

In-housing has been a concept regarded for several years as if it spells doom for agencies as we know them. But in-housing isn’t new, and it isn’t a threat. It works well for some clients and organisations, and less well for others.

I don’t know why some people in the agency world get so defensive about the idea of in-housing. It is something that clients explore for various elements of the marketing and media capability, but there are probably about five advertisers in Australia with the scale and deep enough pockets to truly in-house significant parts of their marketing, media and programmatic operations.

I’m confident, and anyone running strong, effective and efficient agencies, should be too, that the holistic view of the market that comes from years of experience and expertise that sits inside agency networks offers enduring value to advertisers.

The pros of any working relationship with an agency will always be effectiveness and efficiency – getting quality work and ideas that grow your business for the best value.

The pros tied to in-housing elements tend to reside with clients feeling they have more control over their operations. But in-housing can often mean a siloed approach that doesn’t have the benefit of a holistic view of the market, or total media strategy & execution. 

Another downside of in-housing, and something many clients have found, is that it’s more expensive than many think at the outset, and it often turns out to be a lot more complicated and harder to do. That’s why you see down the track, clients coming back to agency partners.

When clients do want to explore how bringing some services in house would work for them, it isn’t something we should run away from. There are areas where it may make sense for a client to take some element in-house, such as data management platforms, or managing third party data licenses, and if they decide to do that, their agency partner should be able to collaborate with them to achieve their objectives.

The important thing is for clients to really interrogate what their objectives are and whether in-housing is the best approach for reaching them. Keeping in mind, that even if the initial launch is successful, over time the in-house teams dedicated to media planning and activation may stagnate in isolation from innovation-focused agency environments where proximity to other teams and categories can inspire creativity.

The advice should always be to really know what it is you’re looking to achieve. Taking all the information you have at hand, looking at the data, the resources and the objectives and figuring out what partners and what capabilities you need to achieve that.

We should all recognise that in-housing isn’t a binary choice; there are many shades of implementation, and often agencies will often support a client’s objectives by shaping their model to your business in new ways. 

When we talk about in-housing, people are often forgotten in the discussion. Talented operators and skilled programmatic people do not always want to work on one client or in a client organisation. They enjoy the variety of projects and problem solving and opportunities in agencies, and the exposure to diverse opportunities. So, by taking services in house, often it’s the people that miss out on training, career opportunities, and learning from different clients’ needs and strategies. 

It’s important that marketers, and their departments, have an integrated, holistic view of their entire media and marketing operation. This is something agencies can offer – the big picture view that comes from exposure to multiple industries and markets.

Media agencies also have a suite of technologies and tools that have the most value when integrated into planning, activation and optimisation of media. These kinds of tools are not likely to be as effective when brought in-house at a client. 

There is no one model for agencies now or in the future, and clients and agencies will continue to coexist in a multitude of ways.

Clients have always, and continue to have, choices about what capabilities and functions to perform in-house, and this will carry on. As any service organisation, we continually evolve, change and shape ourselves to client needs and the dynamics of the market. 

Agencies will thrive, and as the landscape continues to evolve and change become more complicated; there is even more reason for strong and reliable agency partners that can help marketers and brands to deliver growth.

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