In-Housing Won’t Destroy Agencies—It’ll Bolster the Industry

Brands and advertisers need to be unified

a group of people work together to put together a city; a lightbulb is lit up above the head of one of the workers
If you're going to in-house an agency, you have to do it the right way. Getty Images
Headshot of John Trahar

The news from the Association of National Advertisers (ANA) that nearly 80 percent of the country’s largest advertisers are taking at least some of their advertising in-house, including select strategy and creative assignments, has understandably put the agency community on the defensive. To hear the counters, one might think that the in-house movement will suck the creativity out of advertising.

As the ANA report demonstrates, advertisers are taking work in-house to get cheaper, faster and more accountable. They reason that internal people will know the brand and organization better, get to what works more reliably and be far easier to marshal and monitor than external agencies they feel are increasingly expensive, disconnected, disinterested and unaccountable. Yet they don’t contemplate the consequences of recreating the monster they’re trying to escape. Or worse, a different monster that guards the internal politics and agendas of the brand but can’t envision or lead it where it should go.

The voice and value of the brand is at stake. So, if you’re going to build an in-house agency, then do it right and actually build a better agency.

Not everyone can do this. Nearly all (90 percent) of the 80 percent of clients with in-house agencies still rely on outside shops, principally for creative. So they may be building a car, but they still need the fuel and driver. But some could create vibrant agencies that push the bounds of advertising to put the company ahead in the marketplace where it counts. I’m thinking of companies whose products inherently change markets and companies with big portfolios of diverse brands where there’s energy and variety.

The voice and value of the brand is at stake. So, if you’re going to build an in-house agency, then do it right and actually build a better agency.

To do it, clients need to really want an agency, not an executional arm of the marketing department. They need to dispel the conventional logic around how an agency is built, and they need to rethink the four main values cited as the incentives for going in-house: efficiency, brand knowledge, speed and nimbleness and institutional knowledge.

Start by asking why—about everything.

Give your agency goals, not orders

I’m talking about results. The reason we’re seeing some in-house agencies scale down (Disney) or implode (Intel) is that in-housing didn’t move the needle, it only moved the agency problem closer to home. Instead of empowering a collection of communication masters to create differentiation, value and sales, they sought a factory for content and a dashboard for media.

Agencies work best when the people who make things know why they’re making them, so they can apply their expertise to defining the right path and making the right things. Otherwise, the agency doesn’t get the information or incentive it needs to create breakthroughs in all the things that add up to sales, and the client ends up dissatisfied with the agency’s performance, particularly on the four elements most cited in the ANA study. That’s akin to going to the doctor, telling them what to do, then blaming them when your condition doesn’t materially improve.

Change the way you think about efficiency

Who cares if you can make a lot of stuff quickly and on the cheap if it doesn’t generate attention, traffic and sales? Instead of worrying about institutional knowledge, create pathways for complete sharing of intelligence that eliminate the need to chase information, participation and approval throughout the organization altogether.

Invest in talent, and let them run

Let them roam across brands. Let them set the agenda in a clear brand architecture that establishes what’s worth doing when and why, including rules to prevent getting caught up in the pointless race to be everywhere right now. They can lead the brands to where consumers are going and create brand differentiation you’ll never find in the sequence of channels consumers have taken to check out.

Create a solid core of production in-house

Being able to react quickly to trends and changes in the market is the most valuable application of nimble. This requires a team of photographers, editors, designers, videographers and producers deeply familiar with all the brand’s current and historic assets can seize opportunities in the brand voice quickly. Editors and writers working together can repurpose existing content into fresh messaging with particular alacrity.

Cohere and protect the agency

It’s easy for in-house to replicate the siloed problems that daunt larger agencies today, particularly when more than 50 percent of marketers report their in-house ranks at over 50 people and rising. You need co-generation, not competition. Cohere the group with bonuses tied to tangible business results and paying everyone on collective contribution to those end goals. Then protect the agency from the on-demand impulses of brand management.

The essential question is what an agency should be and do, not where it should live. What you really want is an internal engine oriented toward making brands more valuable to their audience. Set goals that unite and satisfy both the brands and the agency, then let the agency lead from inside.


@trahar John Trahar is co-founder and creative lead at Greatest Common Factory.
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