This week, we explore the changing dynamics between clients and agencies. Between in-house and agencies, let’s see where the most value lies.

No in-house silver bullet

Taking marketing in-house is a steady trend. But does it offer all the solutions it claims? Maybe there’s a better way.

Jonny

New Business

Learning Organisation

4 minute read

It might seem counterintuitive for agencies to have an objective perspective on in-housing. After all, it’s eating into our slice of the pie, right? But I think they both have their place in a well-considered business strategy. And that’s what I’d like to explore here.
In short
  • In-housing is a growing shift in marketing practice; bringing the skills traditionally offered by agencies internal.
  • While efficient, it lacks the strategic, objective thinking that makes a good agency so valuable.
  • Partnering agency and in-house teams bridges the gap, maximising the strengths of both.
In-housing isn’t just a trend

With more CMOs investing in it than ever before, it’s a movement that’s here to stay. And that’s for two key reasons:

 

  1. Operational efficiencies are undeniable. Speed-to-market is crucial in the digital marketing age. A lean, internal agile team can be briefed directly on campaigns on the go.
  2. Technology is an enabler. MarTech and automation platforms are growing increasingly sophisticated. They automate processes like simple design and web builds.
But it’s not straightforward
While these benefits have undoubtedly revolutionised marketing for the better, they do have shortcomings every business must consider. There are countless examples of brands being sold the dream, only to find that upon implementation they’re left with a platform that can’t do exactly what they need.

After all, an in-house team can be caught up in the internal world of the company; losing sight of a changing business environment, audience needs, and competition. It’s harder to be critical when you’re facing inwards 100 percent of the time. And an off-the-shelf solution might have speed on its side when all goes well, but it can be less adaptive to changing circumstances or needs when a business needs to pivot quickly.

“In-housing is not the answer to endurance and success, alone. And that’s where agencies come in.”

Agencies keep bringing value
It’s clear that in-housing is not the answer to endurance and success, alone. And that’s where agencies come in. The value is clear: a good agency has a strategic, objective perspective. Recognising that, in a recent Mi3 podcast, Sweta Mehra, ANZ CMO said,

'Great agencies are the best gifts that any marketers can get. I need experts in a fast-changing world. The intention is that a lot of the strategic work, a lot of the innovation will keep happening with agencies outside'.1
The hybrid approach
What is the best balance? In my view, it’s in-house brand and business experts supported externally by strategic and consultative agency partners. Think of in-housing and agencies as parallel resources with many benefits:

Workforce:
  • A mixed agency-client team unites skill sets; working with the same goals and learning from each other.
  • Everyone is responsible for the output, feeding creativity and ambition for achievement.
  • Close collaboration increases productivity and speed to market.

Strategy:
  • Agency-side experts are drawn closer into the client’s business. They get to know its strengths, weaknesses, threats, and opportunities on an intimate product and campaign level.
  • Fresh perspectives keep things adaptable; informed by external knowledge. That means campaigns can pivot quickly based on product performance, market changes, or competitor behaviour.
  • An agency focused on customer experience can bring the external ‘voice of the customer’ into a big corporation.

An example of this in action? CX Lavender’s relationship with Westpac speaks well to this dynamic; striking a balance to enhance the relationship and quality of output. We’re not an internal agency; rather, we’re seen as an extension of the client’s team. This means we’re across the business objectives, closer to customer insights and have the ability to be more collaborative with the clients to co-design solutions. It all goes to show that having the right people in the right places can make creative, data, technology, and media hum.

Blending in-house and agency
External agencies are still used by a high majority of organisations with in-house capabilities around the globe, but what does the balance look like? While an average of 37% of creative output comes from in-house, 40% of brands want agencies to pitch alongside their in-house teams to drive the best possible solutions.
Shifting gears
While the term ‘in-housing’ is fairly new, Australian companies have been inwardly sourcing for decades. New research shows that 67% of brands have internal agency services, and these numbers will undoubtedly grow as we say goodbye to cookies and hello to walled garden strategies.

But with these internal agencies focusing on production, external agencies are still relied on for strategic services, media-buying and SEO.
References
  1. The Mi3 Podcast, 'ANZ CMO Sweta Mehra on media, in-housing agency services and how linking marketing to business impact is winning new bank allies' (19 July 2021) Mi3.

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