Outcome of in-housing falls below expectation, professionals advise hybrid model

By Zion Rufus

Brands implementing in-housing structures for their advertising and shifting spend away from external agencies have revealed that external agencies still play an important role in supporting in-house operations, as they report that outcomes of in-housing have fallen below expectations.

The study, carried out by Alchemists Marketing Advisory and global trade body ISBA, showed that in-housing only benefited brands in the areas of increased brand knowledge and increased dedication from staff.

Some of the major drivers of ad in-housing include cost effectiveness, opportunity to efficiently combine creativity and business under one roof, speed, confidentiality, agility, reduced conflict of interest, better knowledge of the brand and its vendors, dedicated staff, and full control of decision making amongst others.

Although agility was a universal expectation, out of 93% surveyed, only 40% of brands achieved it. Increased cost efficiency and control also fell below expectations. However, despite these challenges, more than a fifth of the brands feel that the in-housing trend will increase rapidly as the advertising industry anticipates a stabilization in the rate of in-housing in the long run.

“I’d rather recommend that brands embrace a hybrid model; a hybrid model where there’s a bespoke agency created for the brand, which is the best of both worlds,” Temitayo Ige, Beiersdorf’s global brand communication lead advised in a conversation with MARKETING EDGE.

Ige maintained that leveraging the capacities of a bespoke agency will allow brands to gather insights on emerging trends such as shift in consumer behavior, and creative works, and explore fresh and competitive ideas among others.

She continued: “It will also help the agency get into the details of the brand, understand the brand in-depth, better flow of information, and probably a revenue share/bonus model that is tied to the company’s growth which makes the agency more business partners than just a vendor. You have dedicated resources from the agency that work on the brand but are still part of the wider agency. This is different from a full time account manager or designer working in the agency on your brand; it is beyond that. Especially with complicated/specialized brands, you have people not just in the company, but in the hybrid agency that become experts on your brand, services, products, etc and they also have the benefit of getting a fresh/different perspective.”

Adebimpe Archibong, corporate communications manager at Corona Schools, believes the marketing function is a very delicate business function that all stakeholders need to understand thoroughly, pointing out that sometimes, a lack of a clear understanding makes organisations unsure whether to in-house the department or outsource it.

“I think in-housing is good for integral marketing duties, but for organisations who intend to do 360 degree Marketing on a regular, the in-house team needs the dexterity, capacity and support that agencies bring to the table,” she told MARKETING EDGE.

According to Archibong, it’s a plus if an organisation has a large in-house team; however, this will require well defined roles and a proper structure, realistic performance management, and succession planning that has to be incorporated into the system.

“But if the team is not so large, the marketing function of that organisation can be internalised to manage cost with an open window to work in conjunction with an agency, if the need arises. In-housing is usually considered to cut cost as well as adequately coordinate the team up close. Companies that employ one person (who I like to call a marketing octopus) will get the juice out of that person for a while, but eventually, a growing and profit-oriented business will see the need to either scale the unit or outsource some functions, and both directions come at an inevitable cost.”

For Adeyemi Olanrewaju, a growth marketing consultant at Content Krush, brands that outsource their marketing and advertising to external agencies will constantly get versatile perspectives, creativity, market trends and audience insights that in-house persons may not always have because they “spend the better part of their lives working on a particular brand or product”.

In his opinion, in-house advertising agencies tend to be less effective as they face critical problems such as inadequate exposure to fast evolving market realities, and leadership blindspots that could limit creativity.

He said: “First, you may think desk competition research and all those fancy digital tools will help but they cannot be as effective as external agencies who will dedicate more time and resources to interacting with competitors, platforms, consumers, trade channels, etc, where they will get cutting-edge insights that will set you apart. Secondly, because business owners, leaders and managers often treat their brands or products like babies, there are “risks” they may be too careful to take. This often limits creativity, delays execution and leads to boring ads.”

Dr. Mary Jimoh, a marketing manager at Olivora Cosmetics ltd noted that today, the creative aspect of keeping everything new and fresh has become of utmost importance for brands. According to Jimoh, effective in-housing requires a good structure, and needs to be managed by people who understand how well to execute the brand’s needs and key communication strengths.

She said: “The challenge I feel most in-house brand teams have is the creative aspect of keeping it fresh…my colleague has a saying: never fall in love with your product..in this case never fall in love with your brand. In addition, you need a good team, and a good one takes time to build and sometimes, brands do not have the luxury of time; unless you have the money to spend poaching people. I am yet to meet an in-house team in my workings that brought something new and fresh (maybe coming from an agency into brands make me side with having an agency rather than an in-house team). However, as I mentioned, if your team can achieve the aspect of keeping it fresh and new with all the campaigns they initiate, then why not.”

The ISBA report restated that fully internally-managed in-housing isn’t for everyone, noting that there are other options and solutions for developing an in-house operation that any brand can consider.

“…when done right, an in-house agency can work in almost any sector and capability area, removing the need to depend on a third party. The potential benefits are massive, but so is the effort needed to launch and manage any in-house setup successfully. Many external agencies are adapting, and where a decade ago, you could count on in-housing specialists on one hand, today, the offering is much broader, especially in the UK, which has one of the most vibrant agency scenes.”


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