Don’t fight, but rethink the in-housing hype
The relationship between brands and marketing agencies has continued to evolve over recent years. For brands to reap the full potential of their marketing efforts, they must curate an efficient balance of in-housing and out-sourcing – however, one size does not fit all. Riina Rintanen, consultant brand and content at Frog, investigates the debate on taking things in-house.
Frog weighs in on whether taking things in-house enhances commercial success / Kristin Wilson via Unsplash
To in-house or not to in-house? That is today’s question for chief marketers. While the question seems simple at first glance, first impressions in this case are deceptive. In actuality, chief marketers need to consider a complex combination of factors to develop an optimal agency strategy. As a digital marketing and experience consultant working at Frog (part of Capgemini Invent), I’ve had the pleasure of working on agency strategies for some top-name brands in the FMCG sector; in the spirit of sharing is caring, I’m going to walk you through some of my learnings.
In recent years, experience and innovation have become key to establishing brand differentiation. As a result, chief marketers continue to redefine the capabilities that could – or should – sit in-house. Internal marketing teams have transformed from delivering high-volume, low-value execution to developing strategy and transformation. An example of this internal transformation is the utilization of first-party consumer data to power personalized experiences. This strategic remit has been traditionally owned by big-name agencies, routinely securing large-scale deals with hefty price tags. However, in-house marketeers of today are emerging with newfound empowerment.
What’s the cause of this shift?
Socioeconomic events have spun brands across the globe into a new world of unpredictability. Chief marketers of late have received a ‘baptism of fire’ to accelerate their digital transformation as they rely more and more on connectivity. The economic precarity brought on by the pandemic – combined with recent geopolitical conflict on European soil – has consequently tightened the purse strings of consumers. As brands have had to cut budgets, marketing teams have been disproportionately hit, creating more scrutiny around agency partnerships as 43% of chief marketers are looking to move to a more in-house model.
So, what does this mean for the brand-agency relationship?
While (81%) of marketeers currently work with agencies across brand, strategy and digital capabilities, over half are planning to bring this work in-house over the next few years. However, with the evolvement of the consumer landscape showing no signs of slowing down, in-house teams won’t be able to keep up on their own. Therefore, agencies are beginning to reposition themselves as consultative partners providing thought leadership, knowledge and education as their way of adding value.
Although the general discourse indicates the favoring of the in-housing shift, it is unlikely that the brand-agency relationship will cease to exist. Deepening cross-collaboration and continued development of relationships allow brands to get the best of both worlds: increasing output, speed and data-driven marketing through empowered in-house teams, while also gaining industry knowledge, access to benchmarks and competitor insights from agency partners.
To facilitate the changing brand-agency dynamic, brands are allowing agency partners access to internal conversations and information that they haven’t had access to before. This is largely in response to the recent change in ways of working, with virtual work becoming commonplace and in-person time less so. Barriers to knowledge sharing have thus been lowered and collaboration is coming more to the forefront.
Does hybrid mean happiness?
Nailing the perfect balance of in-house and agency resource is not a straightforward task. It is crucial that brands take a step back to consider their strategic focus areas before making decisions. Gaining a fundamental understanding of what to in-house, along with how and why, is essential to maximize long-term benefit.
Each brand operates with a unique mix of expertise, customers and channels. Therefore, agency strategy is not a one-size-fits-all solution. Partnerships with agencies can allow brands to tap into advantages powered by economies of scale, particularly in areas of less in-house capability. For example, in the short term, outsourcing paid media could be more impactful and result in greater cost-efficiency than building skills in-house. Outsourcing in the short-term while investing on upskilling and coaching in the mid-term could result in a lucrative long-term agency ecosystem. Brands should thus adopt a phased approach to agency strategy covering short-, medium- and long-term goals.
What’s the perfect brand-agency match?
When pondering on whether in-housing is worth the hype, consider some key questions below before swiping right on your next agency partner.
What in-house skills and expertise do you already have in place?
How advanced is your marketing technology stack?
Where does your brand sit in the competitor landscape?
What do your customers expect from your brand?
It’s not easy to find the perfect fit, but careful consideration of your brand’s needs and wants prior to choosing an agency strategy is essential for long-term happiness (and profitability).
At Frog, we help brands redesign their agency ecosystem and strategy for optimal long-term value. For more information on Capgemini Invent and Frog, visit our site and get in touch.
Content by The Drum Network member:
frog is a leading global creative consultancy, part of Capgemini Invent. Partnering with passionate leaders and visionary entrepreneurs, we apply creativity, strategy, design and data to re-invent businesses, drive growth and orchestrate customer centric transformation.Find out more