Agency or DIY? the Behind the Scenes Trade-Offs of Marketing Allocation

By Alon Tvina On Jul 31, 2019

If you’re debating where to place your marketing, here’s what you need to consider. If you’re keeping tabs on how major brands are working their marketing, you probably haven’t missed the in-house marketing trend that is upon us. The past year has seen a slew of brands claim back their marketing from outsourced agencies. HP is undergoing a major process of in-housing, and so is the Radisson Hotel Group, citing its bid on in-house marketing as a way to take back control of its target market and the customer journey from third-party partners. Cosmetics giant Revlon created their own in-house team (Glossy, 2018), to manage Digital Advertising, spanning the creation of audience-specific content and managing influencer partnerships. Following suit, earlier this year Benefit Cosmetics launched an in-house influencer marketing ‘hub’ to bridge the gap between their outsourced marketing and digital influencers. Meanwhile, Adidas is upping the ante by reclaiming most of its marketing and media strategy, leaving the agency’s main focus on tactical campaign delivery.

These are not isolated examples. According to new research from MediaSense, 66% of brands are looking to reorganize their internal operating model for marketing, while 59% plan to bring more media functions in-house and 61% are reviewing their agency model.

Brands cite different reasons for this shift, including cost-efficiency, brand knowledge, and overall control. But at its core, this new reality is driven by the realization that the brand, not the agency, controls and must take ultimate responsibility for the customer. And with marketing becoming increasingly segmented, real-time and reactive, it only stands to reason that the stakeholders with the deepest understanding of the target market, brand identity and product line will dictate and own customer-facing interactions.

This shift has been made possible by the proliferation of new technologies, which use AI to radically simplify complex marketing practices such as Ad Bidding, Audience and Market Analysis, Competitive Intelligence, etc. In many cases, mastery of these modern tools provides great results, enabling brands to gradually wean themselves off agency services. The upshot is that by bringing these capabilities home and taking back control over essential business practices, brands become stronger not only in the brand equity sense but also as non-dependant businesses with a full capacity over their faculties.

So, should you hire in-house marketers, or work with a marketing agency? Whether you’re a part of a 2-person start-up or manage a scaling organization, it’s not the simplest of questions to address.

Considering the Trade-off

Outsourced marketing is often the result of a compromise. The past two decades have seen marketing shattered into dozens of specialties, each requiring unique professional knowledge. And while all businesses acknowledge the significance of great marketing to their endeavor, they are more likely to outsource marketing compared to any other core business activity. Indeed, while marketing agencies are a dime a dozen, we’re yet to see an R&D or a Product Dev agency catering to the needs of startups.

And in many situations, agencies are indeed lifesavers. They are on the edge of all the latest marketing technologies and tactics, they have all the processes in place – as well as the skill-set and expertise required to execute them. If you do your due diligence and choose a great agency, you can rest assured that you’re getting cutting-edge services based on the constantly changing industry best-practices.

And still, a trade-off is involved, and it revolves around three major pillars:

Brand Authenticity – No matter how involved and on-board your agency is, no one understands your vision, brand, products, and audiences quite like you do. An agency can’t emulate your brand personality, but rather create an approximation of it, which will inevitably feel more generic across all your activities. If you hold your brand identity close to your heart, working with an agency might feel like your getting lost in translation.

Agility – Gone are the days when it was cool to revisit your marketing strategy every quarter, and otherwise, let things flow along. Marketing is becoming increasingly time-sensitive, and for a while now it has been happening in the now. The immediacy of social networks, online media and e-commerce are creating constant marketing opportunities and threats, demanding brands to become both more reactive and more creative. When you’re working with an agency around weekly calls and an allotted time-frame, you need to concede with the fact that your marketing will be moving along in the speed of a steam-engine while the reality is riding the hyperloop.

Cost – There are multiple ways to skin this cat, but the overall agreement is that for smaller operations working with an agency will be cheaper than recruiting an in-house team, while enterprises have a lot to gain by bringing the work home (in 2017 alone, this move saved Procter & Gamble $750M, and Unilever – $300M). This makes sense, and also hints at the fact that somewhere along your growth trajectory there will come a time when it will not be only more customer-centric to build your own marketing team – but also more financially sound.

The Mixed-bag Approach

As with life at large, so with marketing things are more grayscale than black and white. With marketing, today spanning so many activities – messaging, SEO, PPC, creative, media buying, content marketing, to name a few – you’re probably outsourcing some while keeping others closer to home.

When considering how to divide your efforts, it’s worth thinking about the interaction of authenticity, agility, and cost. For example, your content marketing will surely be more authentic if you author it in-house, but outsourcing it may make more sense because it isn’t very time-sensitive and the cost of an in-house writer will exceed that of a freelancer. The same goes for media buying, creative and messaging, SEO or branding – these are areas that require specific domain expertise and are not supported by tools that can short-circuit that need.

On the other hand, you may feel that outsourcing your audience analysis is preventing you from seizing timely opportunities and staying in touch with your target market, hurting both your authenticity and agility – with no financial justification.

In that case, you may want to take back the reins of audience analysis and data-driven campaigns to ensure that you have accurate, real-time and actionable audience information to act on. This is doubly true with the introduction of new and powerful marketing technologies, which are allowing brands to process data and conduct audience analysis regularly to optimize their marketing efforts.

Thinking a Year Ahead

As you weigh the pros and cons of dividing up your marketing cake, ask yourself where you’d like your brand-customer relationships to be at a year from today. If, like the brands mentioned earlier, you consider agile marketing control over customer communications as mission-critical to your business, bringing audience analysis home may be the thing to do.

As you review your strategy and the need to be data-driven, remember that the right decision will be the one that allows you to focus on what you do best: generating effective campaigns, acquiring new customers and growing your business.