Brands rethink their in-housing plans after tactic was ‘put on ice’ amid pandemic

The in-housing trend will not go away, but it is in reverse — to a point.

Turns out, it’s too expensive, too complicated and too political for many companies to do at any real scale. Especially when so many businesses are trying to wrangle costs, not inflate them, during a global economic downturn. The pandemic’s knock to the economy forced many marketers to live hand-to-mouth and the flexibility offered by agencies proved to be critical to survival.

There is little choice. Said one marketer on condition of anonymity: “We’re thinking harder about how we exert more control over our media dollars, but it’s not profitable or practical for us to try and do without an agency. I’m not the only one thinking this. A lot of in-housing plans were put on ice last year.”

J.Crew, Splenda, and Prudential are among a raft of advertisers that once prided themselves on doing the bulk of their marketing internally, but are now turning to agencies, as reported by Insider. If taking more marketing in-house is like a pyramid, for advertisers, it is one with the steepest of peaks.

“Two years ago we’re told repeatedly by clients that they just wanted the technology from us and weren’t interested in any of the additional services because they had an in-house team that could do that,” said James Sleaford, managing director of digital marketing business DQ&A by Incubeta. “Now, those conversations tend to involve the clients saying they want the tech and the additional service layer wrapped around it.”

Against this backdrop, many advertisers are being more selective about how they want to work with agencies and are prioritizing flexibility and capability over scale and stability. In turn, they’re also having to reconsider how to pay for it. Value-driven pricing linked to output or performance seems far more appealing to marketers, according to 10 execs Digiday spoke to for this article, as there is a clearer correlation between agency services and the business outcomes they create.

“We are working with many clients on combinations of fixed fee and percentage of spend, as well as flexible retained fees that can be moved between channels depending on the client’s priorities in a given month or quarter,” said Jess Hodgson, client officer at marketing services network TIPi Group. “Flexibility of service has been very important to our clients as we’ve tackled different marketing challenges throughout the year.”

Not that advertisers want to go back to being entirely dependent on agencies.

While CMOs have focused recently on how more marketing execution could be done internally, they’re now bringing more marketing expertise in-house. So agencies still do a lot of the heavy lifting across many activities from programmatic ad buying to consulting, inventory curation to data management, but marketers have the expertise to know what they don’t know — and the confidence to say it.

Call it a hybrid approach; an in-house marketing team tees up the strategy before consulting with its agency on how to deliver it. Sometimes this will lead to the agency taking …read more

Source:: Digiday