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The pros and cons to in-house advertising

What does it mean to have an in-house advertising team?

For those unfamiliar with the term in-housing, I’m referring to the process of transitioning from outsourced fully managed marketing agency services to hybrid management - or in-house managed marketing. 

For fully managed marketing agency services, you pay them a monthly fee. They do fantastic work and report back to your marketing managers that they’ve created and executed a stellar strategy, optimized your campaigns and ultimately increased your return on investment - now, everyone is happy.

On the other end of the spectrum, in-house management runs your marketing campaigns across various channels and platforms centrally from an in-house team employed by your business, more of a do-it-yourself approach without the assistance of external agencies.

Hybrid then, as the name suggests, is somewhere in between. You might execute parts of your marketing in-house and outsource other parts to an agency of marketing experts. A partial do it yourself, with some help from an expert. Where on that spectrum hybrid falls varies case by case, but I will touch on that a little later.

 

hybrid advertising model

 

The first question is, “What are the pros and cons of each model?” There is already quite a bit of chatter surrounding this topic from some top industry experts. But I’ll do my best to summarize, without tipping my hand with what I think is the best approach. 

When you should use fully managed agency services

Agencies are the best at what they do for many reasons, but in part because they manage thousands of campaigns for hundreds of different businesses at scale, hire exceptional talent, and do a fantastic job of sharing knowledge. 

The prospect of managing lots of campaigns for multiple clients prompts the need for automation in the form of clever time-saving technology and best practice. That initial challenge of running so many campaigns for so many clients makes the creation of agency-built MarTech at the very minimum, justifiable, but in most cases, profitable. Meaning agencies have dev teams who build smart MarTech to ensure their account managers can work accurately at scale.

Knowledge sharing can often be looked at as just another process, a box to tick after completing your daily tasks. But done properly, it can be the catalyst to a successful agency. Agencies always have the most up-to-date industry knowledge and best practices because they share successes, failures, and learnings across the business. The best agencies then document it for everyone to learn from. Hundreds of clients, all with different challenges and different solutions, make for solution after solution.

These two pros give agencies the ability to offer you full-stack best-in-class marketing services for a monthly fee, without you having to worry about hiring, training, or retaining talent.

When an in-house advertising team pays off

Sometimes some of us get that niggling question, “What does my agency do all day?”. Hopefully, you’re with a best-in-class agency and don’t have to think about that very often because you’re drowning in ROI (the marketeer’s dream). 

Another common gripe with agencies is the lack of control you have as an internal marketing team. You give them targets and budgets, you have a wishlist of tasks you want them to do, but ultimately, the work takes place behind a cloak, and you don’t have much control over the success or failure of your marketing activity.

Owning marketing operations in-house brings your most important driver of revenue closer to the business. It offers the prospect an opportunity to rally a loyal team around the same cause - how do we make this business grow? 

Having your marketeers close to the business offers the chance for more collaboration. Having sales and marketing, or BI and marketing working in harmony offers opportunities for more agile working and hopefully more blue-sky thinking. 

in-house advertising team

A hybrid approach with an in-house team plus agency can be smart

A combination of the above, hybrid management aims to achieve the best of both worlds. It is worth noting that hybrid can refer to a range of engagements and in-housing is a spectrum rather than three fixed options. The CEO of Brainlabs, Dan Gilbert, wrote this piece on The Anatomy of In-housing, which begins to draw faint lines on what could be owned in-house and what could be owned by an agency. As you can imagine, every business is different, and thus engagements vary. To contextualize those engagements slightly, here are a couple of examples. 

Brand A has a strong data measurement team, a creative & content team, solid paid & organic search, and paid social expertise. It doesn’t have programmatic expertise, a data science team or above-the-line capabilities, so it runs paid search and paid social in-house, and sets up all its campaign tagging and reporting but outsources programmatic, data science, and above-the-line to an agency.

Brand B has almost everything in-house, creative & content, paid & organic search, social, programmatic, data measurement, data science & BI, a well-oiled and highly profitable machine. But it can’t help but feel like it is missing some cutting-edge knowledge to ensure it doesn’t fall behind competitors. So it employs an agency to help craft quarterly and annual acquisition strategies, to provide training on topics such as a cookieless future or importance of first-party data, and generally act as checks and balances to prevent Brand B’s in-house team from falling behind. 

MarTech makes it easier

While agencies offer the power of automation and talent, the big advertising platforms have done their best to make the platforms as easy to use as possible. Meaning that not all businesses need to use agency tech and can instead harness the power of big advertising platforms and run their own campaigns at scale with the same output. Although marketers went from Mad Men to scientists overnight, the MarTech stack is increasingly focused on ease of use, meaning you don’t necessarily need the same level of expertise to run successful marketing campaigns.

With that said, in-house teams only ever have each team member’s experience and the shared experience of the brand they are all currently working on. While the focus can be a positive, new perspective or learnings from other business challenges or use cases is difficult to achieve. Without constantly hiring fresh perspectives from other successful marketing teams, in-house teams can find it challenging to stay updated on best practices and industry developments. That is where a hybrid approach offers the opportunity to retain access to  agency knowledge sharing while reaping the benefits of owning your marketing operation.

I have blazed through a complex and multi-layered topic and simplified where necessary to outline the in-housing landscape. But the point is, the concept of in-housing is spreading through the industry as more brands want to take control of their marketing. But not every business is set up to take their marketing in house and there are definitely risks involved. The next article in this series will explain the top 5 risks to avoid when transitioning in house.