In-house Agency Facts:
Fact: A recent study by Harvard Business School found that almost half of U.S. advertisers, large and small, operated some form of in-house unit, a trend apparently on the increase.
Fact: The Association of National Advertisers (ANA) study reports that full-service in-house agencies are a rarity. Most in-house units perform only limited or specialized functions.
Definition: An in-house agency is owned and operated by its one and only client: the advertiser. Instead of a company outsourcing its advertising and collateral to an agency, its marketing and communications requirements are mainly handled by its own in-house agency. Some material may still be directed to outside agencies, usually on a per-project basis.
An In-House Agency's Primary Purpose is Saving Money to Corporate Management
As marketing budgets tighten, there is increasing interest in corporate management to give serious consideration to the internalization of at least some marketing and advertising services. While others are considering establishing full-service in-house agencies capable of increasing sales while lowering costs (agency commissions, media placement fees and vendor costs) and improving the bottom line.
Often there is a pendulum swing when it comes to using outside versus in-house resources. When outside agency costs are viewed as too expensive, companies will establish an internal team. And, if inside costs become or appear excessive, corporate management will revert back to outsourcing these capabilities.
As the leader of your company's in-house agency, corporate management is relying on you to establish the proper infrastructure that meets the needs of their internal clients, with all of the strengths found in outside agencies. Naturally, you are expected to do all this while containing and managing costs.
What does it take for an In-House Department to Evolve into a Full-Service Internal Agency?
Some in-house services offer specialized or a limited range of services like "creative boutiques" that provide only graphic design and production. Other in-house departments are generally limited to routine and quick turnaround work (tier 3 work).
The evolution of an in-house department to a full-service in-house agency is no small task. It requires vision and can take many months, and--for some groups--years. Obviously, it will depend on what capabilities you already have in place and the range of services you wish to offer. Develop an implementation plan and timeline for phasing in service offerings and new hires, and revisit and tweak your plan periodically. Following are some things to consider.
1. Organize for Effectiveness
Offer a broad spectrum of classic marketing functions. A full-service in-house agency is composed of various departments; each is responsible to provide required inputs to perform various functions that serve the client. In general, the structure of a full-service in-house agency should contain the following departments:
- Account Management is the department that is in direct contact with clients.
- Account Planning is mostly involved in market research, event marketing and strategizing the "campaigns."
- Creative Department is responsible for the copy writing, design development and production of traditional print as well as e-solutions (internet and mobile solutions). The Creative Department may also include traffic.
- Media-Planning plans and coordinates with media agencies to determine the most effective vehicles (print, internet, mobile, search engine optimization and search engine marketing) to channel advertising to achieve optimum results.
2. Consolidate the Client's Use of Your Services
This is best accomplished by assigning account managers to open doors to new business and to manage client expectations.
- By assigning an "account rep" aligned to various business units you can establish relationships and build trust and confidence.
- They can work business unit leaders to create plans to increase sales and maximize their marketing and communications spend.
3. Determine the Proper Balance Between Using Internal Resources and Outside Resources
Some companies may opt for in-house departments to oversee the use of outside agencies, graphic design firms, media buyers and broadcast producers and event planners.
- In-house agencies outsource specialties they don't have in response to opportunities. When they need it, on a per project basis which is fiscally sound.
- Weigh the value and permanent commitment of bringing on full-time employees as they become fixed costs to the company--salaries, benefits, equipment and space--versus contract or temporary support.
4. Think in a Broader Business Context
It goes beyond the work of copywriters and designers. All in-house agency team members need to understand the core business of the company and speak the language of its clients.
- In a recent ANA survey many corporate executives (61%) felt the in-house agencies lack a depth of strategic thinking. About 50% said it was challenging to obtain fresh thinking when working with internal teams.
- A long-standing issue with corporate management is whether an in-house agency can attract and retain the best creative talent. Others believe in-house resources cannot offer the experience, objectivity or range of services and outside agencies.
- In-house agencies tend to be viewed as less capable or creative as outside agencies.
You can overcome these perceptions by hiring the right people to lead the various functions--and promoting their credentials. In today's economy there are many top notch agency people that can come in and hit the ground running. They can lead and inspire your existing in-house staff, and, at the same time, implement industry best practices into the in-house structure.
5. Add Services to Your Portfolio
Survey your clients to find out what type of services they need.
- Roles for in-house agencies vary widely. They typically handle traditional print collateral, internal and employee communications (including internal company videos), brand-identity efforts (development and compliance), website creation and maintenance, direct mail.
- An in-house agency is also poised to provide related work such as events management, executive and sales presentations and proposal support.
6. Keep Your Focus on Business Results
Measuring the results in quantitative terms that matter to corporate management--e.g., increased revenues, increased market share, increased brand awareness--will convince corporate management to keep investing in the internal group.