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Industry Contributor 19 Aug 2019 - 2 min read

Marketer in-housing is an agency trust and capability issue, less about cost

By Karen Halligan, Practice Lead – Media Value Advisory

Despite new research showing in-housing is falling short of expectations across every factor, the majority of marketers still plan to continue bringing more marketing functions in-house (Marketing Week)

 

Key points

  • According to new research by the Data and Marketing Association (DMA) and Mailjet, the vast majority of brands (86 per cent) are currently in-housing some aspects of marketing and will carry on doing so
  • Increased productivity is a major draw for 47 per cent of marketers. But just 32 per cent of brands are happy this objective has been achieved
  • While 38 per cent expected to improve creativity by bringing processes in-house, only 27 per cent believe this has happened
  • Despite this gap, just 9 per cent of marketers who have tried in-housing say they will not continue with it in future
     

I strongly suspect that trust and control are the primary drivers of in-housing in Australia, with cost reduction expectations closely following. However, this is a complex and potentially time consuming decision. 

Take media buying as an example. Never has the landscape been more complex: there are more channels, ad formats, measurement metrics, technology partners and sales people than ever before. It's the hardest area to in-house, yet even top 20 advertisers are seriously looking at how they could do it.

If media in-housing was practical for major advertising clients, why wasn't it popular when there were only a few channels and no digital? Sure, you can in-house successfully, but only if you plan and staff accordingly and do not try and rush it. It’s hard to recommend this, the effort required alone could be a major distraction, and actually impede you from achieving your core business objectives.

Looking across the marketing stack, there are areas where in-housing makes sense. With privacy concerns at an all-time high, clients are taking a tighter grip on managing their own data. This makes sense, as does owning your own technology logins and providing your agencies access. Having in-house graphic design capability can provide great savings to clients in the right situation, but there’s no one size fits all solution. 

At the end of the day, I wonder if clients would still be considering in-housing if the agency model were still delivering strategy and execution to their expectations, with senior experienced staff guiding them. If agencies get the value proposition right and drive their clients businesses I suspect that clients would not be seeking cost reductions to the extent that they are. And they definitely would not be building in-house capability in complex areas that are not core to their primary business.

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Karen Halligan, Practice Lead – Media Value Advisory

KPMG

Karen Halligan currently leads the KPMG Media Advisory as a part of the Customer, Brand and Marketing team at KPMG.  Karen has held roles in all three areas of the media industry having held client, agency and media owner roles, she has a diverse range of experience across Marketing, Media and Marketing measurement.

She has led some of the country’s largest accounts including Reckitt Benckiser, Yum Restaurants, Procter and Gamble, Coca-Cola and the Coles Myer business when it was spending $180 Million.

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