The Eternal Marketing Dilemma: In-House versus Outsourced Advertising
A Look at Strategies and What’s Right for Your Business
With the overall U.S. ad spend expected to reach $246 billion by the end of this year and The total US advertising agency revenue projected to be $53.5 billion by the end of 2024, it’s no surprise that companies are hyper-focused on how and where to allocate their marketing resources. Like many other essential business functions, marketers struggle to quantify the benefits of developing and leveraging talent within their organization, versus outsourcing marketing services. The strategy an advertiser employs is highly dependent on each organization’s goals, resources, and maturity/stage of growth. In other words, there is no one-size-fits-all approach.
The Evolution of the Agency Model
In order to determine what’s right for your business, it’s helpful to step back and take a holistic look at evolution in the industry over the past 60+ years. The agency partner strategy was born out of large national TV advertising campaigns that gained prominence with the ubiquity of the television in American homes, when the TV room became the family gathering place, and external creativity and resources were needed to put compelling brand content in front of newly engaged audiences.
But, with the advent of the digital age, the platforms, best practices, subject-specific expertise and measurement required for successful marketing rapidly evolved, compelling marketers to manage and produce marketing strategies tailored for each channel and platform. It’s not always easy to execute and measure the success of those strategies out-of-house — especially as platforms, creative, and roles bleed into one another. And it’s not necessarily one or the other, some brands have recognized the value of a hybrid model, made easier by the recent explosion of the gig economy and the widening pool of external talent that can be tapped on demand without the infrastructure required by internal teams.
The Case for an Internal Approach
Which approach is better for your business, and how should you assess when to leverage the skills of outside talent and when to harness the expertise of internal teams?
Let’s begin by taking a closer look at internal marketing strategies.
There is an increasing trend of companies bringing marketing in-house to have greater control of the process and outcomes, and take advantage of the intrinsic knowledge that internal teams have built over time. What’s more, internal marketers live and breathe numbers, and much of the deep insight that drives value and success is lost when the marketer is beyond arm’s length.
Agencies are often not as close to the customers, trends, industry, or metrics as an internal team, who are also often better equipped to rapidly act on data to better engage audiences in real-time.
How to make in-house work for you? To effectively leverage an in-house agency or internal individual(s) to create the most engaging marketing and advertising campaigns, a few key factors must be considered.
- Prioritize Resources: Once an advertiser commits to this strategy, a team should be built with both strong soldiers AND a strong lieutenant to protect resources and make accomplishing marketing goals a priority. The time and space to be creative and develop campaigns that are unique, compelling and really hit the mark is paramount to the advertiser’s success. Oftentimes, the internal marketing team is pulled into the day to day operational needs that can knock proactive marketing off the top of their priority list(s). Internal marketers must be given the time and resources necessary to conceive and design the creative, plan campaigns and execute.
- New Platforms, New Creative: The explosion of new social platforms put an even greater demand on internal focus, ingenuity, and creativity. With social media capturing 33% of the time users spend online, and 40% of internet users following brands on social media, it’s paramount that marketers intelligently leverage these platforms with unique messaging that engages customers and builds loyalty.
- Devil’s in the Data: Internal marketers also often have a leg up on their agency counterparts when it comes to measurement. Internal teams live and breathe numbers; they are close to the data that drives necessary insights, which can be lost on agency partners.
At the end of the day, agencies are by and large not as intrinsically invested in an advertiser’s success as the internal team. Boundaries must be drawn to ensure they can service all clients and constantly be forced to grease only the squeaky wheels. But sometimes these boundaries – justified or not – breed distrust with the client. I experienced this firsthand with a former agency partner that eschewed reviewing creative wins with me on a regular basis. While I’m sure this boundary was warranted, it only served to make me believe they were not testing enough creative, or that the cost of greater creative was more than our contract justified. When I moved the advertising program in-house, we were able to conduct the creative testing necessary to immediately gauge efficacy and drive success. Within the first 90 days, we grew our key KPI by 27%.
Suffice to say, a clear argument can be made for bringing marketing and advertising into the company fold. But I’m not immune to the clear fact that arguments can be made for both approaches when you look at the benefits and pain points on either side. As I mentioned, there is no one-size-fits-all approach to advertising. Stay tuned for Part Two, where I take a look at what a company gains by outsourcing their marketing program to an agency partner.