Agencies today continue to face competition from other agencies and related firms. Agency owners and managers also continue to find themselves in the uncomfortable position of competing with their own prospects and clients who operate their own in-house advertising departments. This in-house advertising department trend is similar to the ugly Christmas sweater phenomenon: every year, we hope it goes away… and every year, there it is again.
We sometimes wonder why so many companies go to all the trouble of investing in people, equipment and systems, all to go into a business where there are already tens of thousands of advertising, PR, and mar-comm agencies, plus thousands more graphic design firms, and where most of these professional firms provide good service and excellent value. In-house "art" or "advertising" departments range from small one-person operations to full-blown departments. And while some in-house departments amount to mere vanity projects, assuaging the egos of sales and marketing executives, many are the result of accounting and finance seeking to control every dollar that enters and exits the company. Certainly companies want to gain control over a process that they feel costs them money. AI tools have accelerated this thinking considerably. When a marketing director can generate a campaign brief in ten minutes, the case for an outside agency feels less obvious to them. We see the in-house trend as a permanent feature of the landscape, not a passing response to economic pressure.
In light of this, here are some points to expound upon when you explain to your clients and prospects why they should not go in-house. Consider using these when you pitch companies that have existing in-house agencies as well.
First, agencies offer clients an independent and interested, outside, third-party point of view on almost all matters. In-house agencies cannot do this, because they are mired in company thinking, company opinion, and have to deal with in-house political and non-political issues. Agencies can cut through the corporate-speak and bring a breath of fresh air.
Agencies are built to be creative entities. Agencies are structured to reinforce creativity and creative thinking, and agency people are hired and mentored by other creative people. In contrast, in-house agencies are generally built to answer to the needs of the sales and marketing departments, and in-house agency people are often hired by non-creative people. If a client needs good, strong creative, chances are they will not get it in-house. Agencies and the people who work in agencies are very good at generating new ideas that help to sell more goods and services.
Agencies can generally leverage purchases better than a single client. Because they buy for a number of clients, agencies develop extensive experience and vendor networks. Dealing with digital vendors, designers, printers, audio/video producers and photographers takes time and technical expertise. Agencies earn their keep by providing these professional services to clients.
Agencies are better prepared to deliver a commercially acceptable end-product. Because of their experience in dealing with vendors, agencies are generally better at getting first class products to the client. This in turn creates a more stable relationship, as clients take the role of receiver, not producer, of the creative end product.
Although clients may understand their own customers, they don't always understand how to market to their customers. They think they know, but too many things get in the way of marketing properly to their customers. Chief among these is the client's need to meet sales goals, which often conflicts with marketing goals. Sales and marketing are two separate processes. Sales benefits the company, and marketing benefits the customer. The ultimate purpose of marketing is to make sales unnecessary.
Outside agencies have a place in this scenario. Because they have an independent view of customers, agencies can help clients design programs that are more holistic, in support of the marketing process. Outside agencies can arrive at research-based insights, develop creative strategies that engage and move the customer to take the desired action, and even nurture that customer until they become a brand advocate. In-house agencies seem less able to focus on the end user, as they are often too busy meeting the needs of the sales process and other internal goals.
Fighting a client who wants to go in-house is tough. Win some, lose some. Just make sure they hear the argument before they go.
