“I’m not going to read that blog post, I’ve heard enough about it!” Maybe that’s what you’re thinking when you read the title, dear advertiser. But hold on, because it’s quite a fascinating and interesting story, even if we do say so ourselves.
A large group of senior marketers managing many millions of dollars have answered a questionnaire from the ANA (the US equivalent of UBA), and the ANA has added a qualitative element to its quantitative survey using interviews and in-depth discussions with some of those advertisers. In short, it talked to people who are often at the forefront of global marketing and media trends, and we should listen. If you disagree, you can look away now, dear advertiser.
Spoiler: in-housing has increased compared to 2018, but not all types of in-housing!
The ANA conducts this survey every 5 years and the step change from 2013 to 2018 was striking – though not surprising of course – and now we have made another quantum leap. In-house agencies have become a given in the US; more than 80% of respondents now have one. Marketers indicate that these are mainly driven by cost efficiency and having a better understanding of their own brands. We personally find that last argument unfortunate, as both creative and media agencies should understand their clients, no? The analyses we see during pitches are remarkably strong! Targeted insights, clever brand analyses and clear analyses of the competition abound. In short, it’s data, tools and human insights at their best! But apparently only during pitches… Is that work neglected once a potential customer becomes an actual customer? Yes… it’s as simple as that! The daily grind, the campaign rat race, billing and other issues, you name it… It all adds up and means that all too often there is no time or resources left for creativity.
It is important to underline that the ANA study shows that the in-housing work is mainly linked to the creative part of our business: print creations, direct mailing and certainly also digital with social in the lead. That is less surprising, dear advertiser. In addition to the cost aspect that keeps coming back as a KPI, pace and flexibility are important drivers for you as a marketer and for your management colleagues, especially when we talk about digital.
Zooming in on media, it is striking that the figures for 2013 and 2018 are almost exactly in line with those of the new study. Some 54% of these large advertisers dabble in some form of in-house media services. In addition, the focus is almost exclusively digital: about 30% of the respondents prefer to do social (approx. 40%), but also search, video and mobile themselves. We get some flavour of these numbers by reading the qualitative part of the study, which reveals that the ownership and protection of first-party data is the reason for handling media business in-house. In other words, while there is no end to the rising trend of in-housing creative aspects for the time being, everything related to media is stagnating. “Too complex,” the respondents indicated. We believe that, but on the other hand, we are convinced that finding the right people and making the related, necessary investments is a much bigger problem. As already mentioned, cost efficiency always and everywhere comes up as the most important driver and KPI as part of the in-housing strategy. However, if you want to bring media in-house, there is a whole wish list of tools, data pools, dashboards, and so on that will need to follow as well. Believe me, dear advertiser, when I say that these are major investments!
What does that mean for our country, and what do we observe on the ground?
Well, in all sincerity, the numbers confirm what fma is seeing during traditional but also digital media agency pitches that we support, namely that in-housing is no longer on the rise. What’s more, there’s even fine-tuning! Advertisers have picked up low-hanging fruit (social, search, etc.) and are now looking to only do what is necessary in-house from a data point of view or because of the business requirements, with business performance being the other prevailing KPI. Advertisers in our country often assert that budgets are too limited to pursue an active in-housing policy. Others, who have made the switch, get stuck as their staff are unable to keep up, or are not in the know about the specifics of the media sector and therefore often miss trends.
You are used to fma using clear, sometimes even frank language, and here we are pulling no punches either, dear advertiser: stick to what you know! Make sure that you are on speaking terms with your media agency. Engage them, motivate them, make them part of your brand, be strict, judge them fairly, and incentivise them where appropriate. We too have evolved along those lines, but after 15 years we notice that this policy of moderation helps you to keep up with the trends in the long term, as well as generating the most correct data and the most up-to-date dashboards. And yes, exceptions always prove the rule, but budgets in Belgium are so modest that only limited in-housing activities can be cost-efficient. In other words: in-housing may be interesting for you, but first analyze it very thoroughly and limit its scope. The external specialists can still teach you a lot.
Dear advertiser, we wish you a pleasant Ascension Day with enlightened insights!
Would you like to know more? Feel free to contact us.