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To in-house or not?

The Marketer’s Toolkit 2019 by WARC suggests that though the trend toward in-housing will continue mostly at a global level, it looks less significant

A recent study, ‘The Marketer’s Toolkit 2019’ by WARC, has debated on whether setting up in-house creative and media agencies would be beneficial for advertisers or not.

The report suggests that though the trend towards in-housing will continue mostly at a global level, but it looks less significant. While a lot of studies by major brand owners have prompted marketers internationally to consider in-housing capabilities, WARC's Marketer's Toolkit 2019 survey revealed that, globally, the creation of in-house agencies is a relatively low priority, named by only 15% of advertisers, behind issues such as culture, automation and e-commerce.

The report says that there are some pointers which need to be kept in mind while deciding to go in-house. Firstly, clarity of objectives is essential. Secondly, knowing which aspects of media to in-house is important in determining the objectives. For example, performance-led brands can be highly efficient at optimisation, but then find it hard to scale demand.

Thirdly, a crystal-clear road-map for the implementation of in-housing is vital. Having the right strategy, structure, tools and systems is critical, and these need to be carefully planned. Location can also play a part, with some advertisers finding it hard to attract the right kind of people to their offices in out-of-town locations.

Rachel Hatton, Chief Strategy Office, Oliver, said, "To read the marketing media over the last couple of years, one might reasonably think that in-housing is a recent and emergent phenomenon. In fact it's surprisingly pervasive.

"Research by the ANA earlier this year revealed that 78% of their members have in-house agencies, and 90% of these are stepping up their workload. My own company has been building bespoke agencies inside client organisations for the last 15 years."

Nick Manning, Senior Vice-President, MediaLink, said, "For advertisers considering some form of in-housing, there are a number of key actions required. It is critical to answer the 'why, what and how?' questions with no room for ambiguity, with consensus across the company."

Key findings around in-housing from WARC's Marketer's Toolkit 2019 survey reveal that in-housing is a key consideration for brands of all kinds in 2019. Research shows that more than three-quarters of brands in the US are taking elements of their marketing in-house, and the trend is being replicated in many other markets.

Also, proponents of in-housing cite many benefits. These include greater cost efficiencies, better control and oversight of data, and an improved understanding of the brand by those creating and managing campaigns.

But the fact remains that creative and media in-house teams have distinct requirements. The former only works if it possesses the right talent, often with a strong external perspective, while the latter requires investment in data and insights skills, as well as the right tech stack.

Also, in-housing is not easy. Many advertisers, including Intel and Lenovo, have abandoned in-house teams, while others like Coca-Cola have opted to enhance oversight but leave day-to-day operations to trusted partners and agencies.

Summing up, Alex Brownsell, Senior Editor, Media at WARC, comments, "The path to in-house success is by no means straightforward. As our report shows some brands have opted to step back from in-housing, despite cost efficiencies and industry acclaim. Others like Burger King have eschewed in-housing entirely. Marketers in pursuit of the ample opportunities offered by in-housing would do well to tread carefully."

The Marketer's Toolkit 2019 is based on a survey of more than 800 client marketers and agency executives around the world, backed by CMO interviews and WARC's case studies and best practice guidance.

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