In-housing: much desired yet many struggles

Brands’ desire to move their advertising in-house is no news, neither is the growing transparency concern at the advertising agencies. Back in 2016, the Association of National Advertisers (ANA) published the results of the independent study of media transparency issues in the US advertising industry. The key findings were alarming:

  • Numerous non-transparent business practices, including cash rebates to media agencies, were found to be pervasive in the U.S. media ad buying ecosystem.
  • There were systemic elements to some of the non-transparent behavior. Specifically, senior executives across the agency ecosystem were aware of, and mandated, some non-transparent business practices.
  • There was evidence of non-transparent practices across a wide range of media, including digital, print, out-of-home, and television.

Transparency issue is not the only concern for in-housing. There are also considerations regarding greater efficiency, better control of the brand image, lower costs, etc. However, while in-housing does have many perks, not every in-housing effort ends in joy and success. At times, a failed in-housing attempt can be costly and devastating.

Take Intel and Pepsi as examples.

Intel built its own in-house agency called Agency Inside after the arrival of a new CMO in 2014. At its peak, this in-house agency grew to almost 100 people handling 60-70% of Intel’s brand marketing, according to AdWeek. By mid-2018, the new CMO that oversaw Agency Inside was out, and the in-house agency team was dismantled and nearly all employees working for Agency Inside were laid off.

Pepsi, on the other hand, produced a controversial Kendall Jenner ad in-house a few years back. In the ad, Kendall Jenner hands over a can of Pepsi to the police officer among the protest crowds of Black Lives Matter and everyone ends in joy and cheers. The ad was heavily criticized as it was opportunistic attempt to trivialize the importance and gravity of the social movement, and Kendall Jenner, a 21-year old white model, clearly had nothing to do the movement in question. This in-house production, which lacked an outsider opinion, offended the public and ended up with the ad being pulled and Pepsi issuing an apology statement.

Business Insider: People Are Outraged By This Pepsi Ad Starring Kendall Jenner

Fast forward to today, with COVID-19 lurking around the globe, the debate regarding in-housing is ever more heated. In time of crisis, brands are more cautious about moving advertising in-house. Why? It’s plain and simple. It is a lot more flexible working with agency than having an in-house team. No matter it’s organizational change or budget cut, it’s much easier, faster and a whole lot less costly to stop service from an external agency than shutting down an entire in-house agency team (cf. the Intel story).

However, between in-housing and working with an agency, it doesn’t have to be strictly one way or another. We believe that with the right solution, brands can continue enjoying all the benefits of working with their chosen agencies just like in the good old days, while control and transparency are re-grasped at the hands of brand marketers. Interested in knowing more about how this is done? Contact the Grasp team and get ready for a new era of brand-agency collaboration fueled by trust, transparency and visibility.

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