The rise of in-housing is tempting marketers but agencies remain an essential part of the mix, according to industry insiders.
The In-House Agency Council (IHAC) has recently added a raft of new members, including Foxtel, Kraft Heinz, Movember, Bupa, Destination NSW, Moose Toys and the University of Victoria Wellington.
The industry body’s latest research shows that the trend to in-house and hybrid agency models continues to gain momentum globally.
Chris Maxwell, chairman of IHAC, said many businesses are bringing capabilities they once outsourced to agencies in-house.
“That includes things like creative, design and production, but also media planning, media buying, optimisation and reporting analytics,” he said.
“The overarching reason is that the shift toward digital and mobile marketing requires businesses and marketers to move faster and connect with customers in real time.”
Darren Woolley, founder and global CEO of TrinityP3, said in-housing is a trend but one that’s nearly a decade in the making and already well established overseas.
“The major trend we are seeing is the rise of in-house media agencies, particularly for digital and social media, utilising first-party data,” he told AdNews.
“A few years ago, this was the option for major advertisers with significant digital spend in the tens of millions plus.
“However, today, with the lower cost of entry and facilitation by digital advertising platforms, we are seeing much smaller media spends embracing this opportunity.”
Woolley said the role and definition of in-house agencies have evolved in recent years.
“It is certainly more open and prominent due to the efforts of the IHAC, but it is also much broader than in the past,” he said.
“Considering that an in-house agency could be anything from a couple of designers in-house to a fully developed content and media centre, the definition of an in-house agency has expanded rapidly, driven by the demands of the digital platforms and facilitated by the accessibility of technology and the workflows created by the digital platforms.”
Woolley said bringing content and media in-house provides greater control and immediate insight into performance.
“It can speed up response to the market and go to market as well. It also enables cost-effective scaling to meet the content needs of the growing number of digital channels,” he said.
“In-house also enables marketers to better and more securely utilise their first-party data and embrace predictive technology, such as marketing mix modelling, more effectively.”
However, talent acquisition and retention can remain a challenge.
“There can also be concerns about internal headcounts, internal marketing costs, and vendor management, as well as the perception of a loss of awareness of market trends and innovations,” he said.
“This is why you find most in-house agencies are either working significantly with external agency partners or even engaging external partners to embed and manage the agency facilities in-house on behalf of the marketing organisation.”
From a recruitment perspective, Julie Anne Longano, executive director of Peeps Consulting, said there is consistent curiosity about moving to in-house agencies.
“When asked the question on why, media-agency folk most often cite the work-life-balance as a key instigator ... but job security is always a very close second,” she said.
“Understandably, people are drawn to the in-house structure of being able to focus deeply on the work, the craft, without constantly having one eye over their shoulder on whether the account they’re working on is about to go up for pitch, and they’re potentially out of a job.”
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