The number of in-house agencies continues to grow. According to IHAF, 64% of companies have in-house agencies today, which is a 52% increase since 2008. This industry trend could lead us to question whether the status of the independent marketing agency is fading.
With supercharged growth in employing in-house agencies there is a valid debate about whether the modern marketing operation has evolved beyond the external agency.
Source: Forrester Research, Inc. Unauthorized reproduction, citation, and or distributed prohibited
In-house v out-house agency – is there a winner?
In-house agencies are considered powerful tools that enable marketing leaders to control and cultivate their customer information. In-house agencies often have in-depth product knowledge which enables them to market in a more concrete manner. Often, the best form of marketing is an outward projection of the company’s vision and culture. In-house teams understand this better because they’re immersed in it each day. Taking all of this into account, does the independent agency still have a place at the marketers table?
A 2018 report from Forrester recommends that readers should “blend agencies, don’t break them”. The report suggests that marketing leaders should invest in their in-house digital marketing capabilities but that their business model would also benefit from collaborating with external creative and media agency partners.
Where do agencies prove their worth?
Insular thinking can sometimes be the enemy of in-house agencies. Occasionally, they can veer down creative burrows and end up producing repetitive results. An agency's perspective is the fuel for its creativity. Agencies act as an auditor for their clients' assumptions and test their validity. It can sometimes be challenging to replicate or maintain their story-telling expertise and objectivity in-house.
Agencies usually bill hourly or via a retainer fee, which is dependent upon certain deliverables. This facility means that agencies can often be pulled into a project at certain times and can remove themselves from the process when not required. This hiring flexibility can be appealing to marketing leaders that aren’t entirely sure what specialist skills they will need for a project and when they will need it.
Agencies live and breathe creativity and creative talent thrives on having diverse brands to work on, collaboration with other creative thinkers, exposure to ideas, and unconventional working environments. Marketers lose out when creative talent becomes overly absorbed in daily business.
There is a significant time investment when building an in-house team to ensure that your team not only understands the market strategy, but understands each other’s roles. On the other hand, agencies typically have industry knowledge and go-to-market skills that can easily plug into your business and achieve results quickly.
Can agencies and in-house teams co-exist?
Maturity comes from approaching in-house and external agencies through a blended agency model: linking key capabilities across creative, digital marketing, and media between in-house and external agencies.
“The ideal world is an agency that can operate seamlessly across media types and touch-points.”, said a Marketing Director, CPG. Marketing leaders need time and space to generate new ideas for acquisition and retention. Outsourcing the more time-consuming activities, such as building email campaigns, writing blogs, and posting on social media can enable in-house marketers to concentrate on more strategic efforts such as account-based marketing, SEO and events.