Part 2: The Eternal Marketing Dilemma: In-House vs. 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, brands must determine how and where to allocate their marketing resources more than ever before, and whether they should capitalize on internal talent or leverage outsourced marketing services to determine strategy and execute their spend.
Here’s the painful truth: there is no one-size-fits-all approach.
I made the case for an internal marketing approach in Part I of this series (link). I’ll now investigate the agency approach, which was born when TVs hit American homes en masse and, with them, national TV advertising campaigns. At the time, brands looked to the external creativity found with agency partners to best engage these captive audiences. And for good reason.
Known for concepting the most original campaigns and employing some of the top creatives in the industry, agencies were often thought to be the go-to source for the best thinking and execution. With the advent of the digital age, the platforms (and best practice tailored to these multiple platforms), expertise, and innovation necessary to execute successful campaigns became paramount to a marketer’s success. Regardless of platform, innovation is still king: one in every six marketing dollars is spent on innovation and nearly 10% of CMOs feel that marketing innovation will be vital to the delivery of their company’s marketing strategy over the next 18 months.
The Case for an Agency Approach
Looking to protect resources and reap the creative manpower of an agency? You’re not alone. While companies are increasingly bringing marketing in-house, the total number of ad agencies in the US is also steadily growing. I 2015, there were more than 13.3 thousand such establishments in the entire United States and that number continues to expand. U.S. ad agencies are expected to generate over 45 billion dollars in revenue in 2020, a 5.5 billion dollar increase over 2015.
It’s true that in-house marketing organizations often understand the nuts and bolts of the business more intimately than an external partner, but that can be to the detriment of expansive thinking and creativity. Internal teams are often pulled in multiple directions and into the day-to-day rigamarole of the organization. External teams are rarely faced with those same challenges, enabling them to see the forest through the trees and giving brands to benefit from their wealth of expertise and creativity. What’s more, an external strategy takes the investment and burden off of internal teams. When brands outsource creativity and execution of marketing strategies, allowing agencies to do the heavy lifting, internal resources can focus on what they do best: running the business.
So, how do advertisers get the most out of their partnership and avoid the pitfalls of outsourced marketing?
While I have never been on the agency side, I have worked with many external agencies and have developed a clear understanding of what it takes to make the partnership work. With the right partner, brands exponentially benefit from a strong strategy and playbook that an agency can bring to the table.
Seeing the Forest through the Trees
It’s no secret that an agency is never going to know your business as well as you do inside and out. That said, internal teams frequently suffer from the “seeing the forest through the trees” predicament: oftentimes those that are too involved in the details of an issue struggle to look at the situation as a whole. Agencies have the luxury of looking at the sky as the limit, and bring learnings and best practices from multiple partners, industries and campaigns to their clients. If even achievable, an in-house team often needs to research and communicate with lots of different advertisers to glean the same learnings.
Boundaries Can be a Good Thing
As I mentioned in Part I, agencies have boundaries, and those boundaries can serve as a double-edged sword. Oftentimes lines must be drawn by agencies to ensure they prioritize the well-being of all clients and drive results across the board, rather than constantly be forced to grease only the squeaky wheels – to the detriment of others.
Devil is in the Digital
Where’s the devil now? The old adage “the devil is in the details” is true in multiple arenas. In the Part I section “The Devil is in the Data,” I discussed the importance of a data-driven marketing strategy, often best understood by an internal team. But agencies are also set up to understand best-in class strategies and practices across all advertising platforms to the benefit of their clients. It’s the job of the agency to stay abreast of the most cutting-edge strategies and latest developments in the industry. The best agencies know the latest platform and channel developments and the commensurate technology and tools like the back of their hands, and how to maximize them to the advertiser’s benefit. After all, they live and breathe marketing day in and day out.
Train, Don’t Drain
It’s tantamount to a brand’s success to invest the time making sure agency partners truly understand their business and industry, and avoid draining them with the internal morass that may not be immediately beneficial to their business and overall results. Leave that to the in-house team.
Trust Your Agency’s Vision and Strategy
Trust is the basis of all successful partnerships. Given that “success” is an amorphous body, results are heavily dependent on the trust between the brand and its partner, as well as the vision and the strength of the agency overall. This said, success is also driven by the attributes of the individual team members that service an account. Given the turnover that is prevalent at all agencies — often a pain point for the clients – advertisers have to trust the core tenets and strategic approach of the agency. The best agencies devise a sound strategy, and are also able to execute on the strategy regardless of the inevitable team turnover.
Neither strategy (in-house vs. outsourced) is a walk in the park. Managing an agency takes a lot of time, and the individuals in charge of managing the relationship are required to act as a liaison between the agency, internal legal, internal BI, internal product, and other organizations. Suffice to say, clear arguments can be made for bringing marketing into the company fold, as well as working with a strong external partner. Achieving a winning advertising strategy is not for the faint of heart.