A recent IAB Europe report confirmed that the in-housing trend has advanced rapidly in the European marketing world: over 86 percent of programmatic-savvy brands have some in-house ability, with 39 percent of them in-housing all of their marketing activities. A 2018 report from ANA in the U.S. revealed similarly high numbers, thus confirming that the trend of in-housing marketing activities is here to stay across the globe.
What is driving this in-housing trend? For one thing, brands feel an ever-growing need to control the data they collect on their consumers. In many ways, this leads to a “self-fulfilling development” of in-housing activities: the more first-party data that brands collect, the more they seek to control their online marketing platforms – which leads to more data collection, and so on… This need is catered to by platforms such as Google, Facebook, and Amazon, as well as technology stacks such as Salesforce and Adobe.
Consequently, brands are more aware than ever of the wide variety of content they need to produce across media channels. Companies need an overarching brand narrative that is recognizable both in on and offline channels – and especially need to ensure they maintain a sense of brand differentiation and distinctiveness, as these elements are widely considered to be essential drivers of brand value. Creativity is key to building these drivers, which is why the question of whether creativity can be effectively in-housed remains one of biggest open questions in the marketing world today.
Certainly from a sheer volume perspective, there is more need for creative work than ever before. The decline in linear TV viewership across most Western societies means that it is no longer sufficient to create one TV campaign and a few key visuals. In order to maximize reach to their target audience, brands must develop specific creative assets across a wide variety of channels where the audience spends its time – those places, in other words, where brands can best drive user conversion and engagement. At the same time, this proliferation of distinct content channels has stretched brands’ available budgets for content creation. This financial strain, in addition to a desire for more control, is what leads to the pressure to move marketing in-house. Indeed, the ANA survey confirms this assumption: “When asked to identify a single primary benefit of having an in-house agency, cost efficiencies were top ranked by a wide margin.”
The next question, then, which marketing capabilities are most likely to be in-housed by a given brand, and which are most likely to outsourced? We believe that the chart below represents a logical progression of capabilities along this continuum – with commercial ownership and data ownership most likely to be in-housed, and creative production and third-party tech positioned more towards the outsourcing end of the scale.
Although we believe there are in-housing opportunities for brands along this full continuum, there is also an ever-increasing need for third party involvement in certain aspects of brand management. This is especially the case for marketing capabilities that involve creativity. Fairly recent examples of controversial in-house creative work for Dove (namely, an Instagram video that seemed to suggest light skin was better than dark) and Pepsi (the Kendall Jenner “protest” ad) resulted in PR disasters that illustrate the need for strong creative leadership, as well as the value of an outside perspective from a partner agency.
Therefore, we think it is important to consider the consequences of in-housing on the future of creative content development at brands and agencies. This is especially true given the following statement from the aforementioned ANA report: “Over the past three years, 70 percent of respondents have moved some established business that used to be handled by their external agencies to their in-house agency. Top services moved have been content marketing, social media, and influencer marketing.”
While in-housing creative production offers a higher sense of control, the long-term effects of this trend on brand value are difficult to predict. Often, brands will not consider their in-house creative production capabilities to be a core business activity, which results in a lack of overview and management. Confusions around scope, process, and expectations can result in unwanted complexity. In-house creative products should have well-defined scope of work, as well as a single point of oversight and management to avoid an overload in requests – but this is not always the case in practice.
In conclusion, while brands will continue to in-house certain marketing activities, they should not overlook the value of expertise and help from outside partners. Chiefly, it is imperative to safeguard creativity: and the only way to do this, is to have constant access to talent - talent that is hard to attract and retain outside the stimulating creative environment of an agency.
Brands that do pursue in-housing should choose their support partners wisely. For while there are dozens of agencies specializing in in-housing and in-sourcing certain skills, the level of talent brands can attract to these efforts is directly linked to the opportunities available for that talent to learn, develop, and grow across categories and brands.