Helpful considerations and approaches for building your in-house media agency

Back to Blog 09/19/2024 - by Raquel Rosenthal

As in-housing agencies become the new normal, brands face a crucial choice: maintain a hybrid model or fully commit? With 82% already in-housing and 92% still collaborating with external partners, the future of brand-agency relationships is more flexible than ever. What approach works best for your business?

The reality is that in-housing does not have to be an all-or-nothing approach. Instead, brands are recognizing the value of leveraging both internal resources and external expertise to create a flexible and dynamic marketing ecosystem.

This trend is further supported by the World Federation of Advertisers, which found that two-thirds of multinational organizations spending over $30 million annually on media have established in-house agencies, yet many still work with outside agencies for specific functions. This hybrid approach allows brands to maintain control over their core strategies while accessing the specialized knowledge and resources that external agencies can provide.

However, the landscape looks different for smaller to mid-sized organizations with media spends between $1M and $30M. Many of these companies do not have the resources or infrastructure to build fully operational in-house agencies. This presents a unique challenge for them as they strive to balance the benefits of in-housing with the practical limitations of budget and talent availability.

In this blog post, we’ll dive deeper into why brands are increasingly in-housing their agencies and the key considerations that should guide any brand thinking of making the shift. From assessing internal capabilities to navigating the complexities of a hybrid model, we’ll explore how brands can structure their in-house efforts for maximum impact. It’s important to remember that in-housing media isn’t a one-size-fits-all solution—there are many ways to approach it, and brands must tailor their strategies to fit their unique needs and resources.

Why Are Brands In-Housing Their Agencies?

The primary reason brands are choosing to bring their advertising and marketing efforts in-house is to gain greater control, transparency, and brand safety over their campaigns and investments. By in-housing, brands can closely monitor and manage their operations, ensuring that every aspect of their marketing aligns with their vision and values.

Moreover, the growing importance of first-party data has fueled this trend. As brands increasingly recognize the power of their own data, bringing agency operations in-house allows them to better utilize and expand their first-party data footprint. This, in turn, provides deeper insights into customer behavior, allowing for more precise targeting and personalized campaigns that drive better results.

Should you outsource media with an agency, In-House a portion or go all in on in-housing?

The great news is, you don’t need to bring everything in-house to reap the benefits of transparency, control, and brand safety. There are multiple in-housing models that can be tailored to suit your brand’s unique needs and capabilities. Agencies, too, have adapted by evolving their business models to offer a range of flexible service levels, allowing brands to choose the type of support that best complements their in-house teams.

Let’s explore the different types of in-housing models and how they can align with your marketing strategy.

Outsourced agency model:

Outsourcing to an agency offers an immediate solution with access to a diverse pool of expertise and cutting-edge technology— that includes talent that most SMBs might not have access to otherwise.

Agencies bring research, strategy and media planning expertise, injecting innovation and creative strategies that have been proven across multiple industries. But this model may sometimes lack a nuanced understanding of your brand’s core identity and values, leading to potential misalignments.

Pros of Hiring an Agency:

Budget and ROI

It’s essential to evaluate the cost implications of both options in relation to expected ROI, particularly for paid search and social campaigns where efficiency and expertise directly impact performance.

The salary for a single digital marketing manager can range from $90,000 to $200,000 annually, depending on their level of experience. This translates to a monthly expense of approximately $10,000 to $20,000 once benefits, taxes, and the need for ongoing training are accounted for. Choosing a media agency presents a more cost-effective alternative.
Monthly fees for agency services can range from $5,000 for smaller programs to over $30,000, depending on the project’s size and scope. The major difference is that this investment provides access to not one full time employee but a comprehensive team of experts specializing in various aspects of marketing including research, strategy, account management, media planning and buying for SEM, social media, programmatic media and traditional media. This also includes optimization, AI innovations, reporting and analytics.

Access to the Agency’s Broader Team

Choosing an agency for your paid media means tapping into a pool of expertise that often spans the entire digital marketing landscape.

The agency’s broad knowledge base can provide a strategic edge across your digital marketing endeavors.
Gain access to additional marketing tools and industry insights—resources that would otherwise come at an additional expense.
The diverse skills and innovative strategies through an agency can be particularly beneficial for paid search and social media marketing because these are areas that constantly evolve with technology and user behavior.

Exclusive partnership and platform relationships from Google to Meta to The Trade Desk to Amazon. These relationships need swift resolutions during technical issues ues when reaching out to customer support and exclude businesses who cannot afford their minimums. These partnerships provide access to platform innovations and updates.

Elevated status with search, social and programmatic platforms frequently grants them early access to beta features, allowing them to test new campaign types and automation that might benefit your brands business in the future.
Flexibility and Speed-Agencies are continually looking for ways to improve your performance by optimizing campaigns and responding to reporting and analytics
Expertise and Innovation-Agencies uphold benchmarks and standards to remain at the top of a highly competitive market. This ensures that agency professionals are consistently on top of the latest certifications, educational advancements, and trends. Plus, your agency teams are working across more than one business and often across industries, giving them valuable insight into trends at a broader level.

Cons of working with an agency

Reduced Control-Working with an agency means less control over the day-to-day management of campaigns, which may concern some businesses. This reduction in oversight can make it more challenging to ensure that every aspect of a campaign reflects the company’s immediate priorities and nuanced branding strategies.
Risk of Misalignment-There’s a potential risk of campaigns failing to fully align with your companies objectives due to the external team’s complete understanding of your brands business. This distance can sometimes lead to strategies that, while effective in general, may resonate less with your target audience.

Communication Challenges-Effective coordination with an external team requires clear communication, which can sometimes introduce delays in campaign adjustments or strategy shifts. These delays can be critical in a fast-paced market environment where timing and rapid response to trends can significantly impact campaign success.

In this model, a brand leans on an external agency to oversee the entire strategy, execution, and measurement of its campaigns. The agency also manages billing and contracts. While some may argue that this approach offers “less control” over media investments, it actually allows the brand to allocate its in-house resources to other critical business functions. By outsourcing the operational side of campaigns, the brand can focus on areas like creative development, product innovation, or long-term strategic planning.

Hybrid or shared model:

With the hybrid model, control is shared between the brand and the agency. In many cases, strategy and data are owned by the brand, while campaign management and execution are shared. For instance, the brand may develop the overall strategy and rely on the external agency for day-to-day campaign execution. This setup works well for brands that want to stay focused on strategic planning, devote more attention to creative efforts, or only bring specific marketing functions in-house.

However, some brands might take the opposite approach and lean on an outside agency to help develop the strategy and planning, using their in-house team to execute campaigns instead.

Complete in-housing or complete brand control:

One of the main benefits of inhouse media is brand familiarity. Also, the brand assumes control over all aspects of its media and marketing operations. This includes owning the entire strategy, execution, measurement, billing, campaign management, and vendor or technology contracts. It’s the model most envision when they think of an in-house agency, where every part of the marketing and media investment process is managed internally.

However, there are variations of this model that offer full control with more flexibility. For instance, some brands choose to use an external agency’s Demand-Side Platform (DSP) to buy media by paying a platform fee, establishing a minimum spend, or purchasing user licenses. This self-service model enables brands to maintain control over their strategy and media investments without the need for a significant technology investment.

Pro’s to in-housing

Brand familiarity and industry experience-In-house media teams are embedded in the organization’s structure and able to invest more time in understanding the brands products, customer base and target audience. In addition to having a connection with the brand’s vision and goals. Thus, becoming industry experts in the brands vertical.
Control-When you bring your media in-house, you are increasing the amount of control you have over your media.
Focus-An in-house team is not divided across more than one brand. This can provide having all the time and attention focused on this main brand and can allow for faster execution of marketing objectives. This means your in-house team may be more accessible than your agency team.

The cons to in-house paid media teams

Limited skill-sets-It is unrealistic to expect your in-house team to match the skill-set of agencies. In house teams are smaller and rely on a small select team in contrast to agencies which have access to more team members with a wide range of skills
Potentially becoming too insular-With a smaller team, there is less opportunity for a diverse range of skill sets and ideas. At an agency, there are strategy sessions that involve debate and continual analysis on how to formulate the best marketing and media plans possible.
Cost-It is a common misconception that paid media agencies cost business more than in-house agencies. Unless you are a brand that is spending 30-60 Million plus in media, in-housing can be more expensive. You have the upfront cost of setting up ad tech and martech software, Platforms, Research, Subscriptions, HR, etc. See some cost below
Recruitment and Hiring-20% of respondents of the World Federation of Advertisers state attracting and retaining talent can be a significant downside to in-housing. The amount of effort to hire can be a burden on a mid sized brand. Where as if an agency has attrition they can pull from another team or take on the risk of hiring.

What should my organization in-house first?

When deciding what to in-house first, several factors come into play. Your organization needs to assess its existing technology, talent, and strategic goals. It’s crucial to identify which functions provide the most value when handled internally versus those that can benefit from external agency support. Start by asking: where does your team already excel, and where can you use external expertise to complement your efforts?

Technology & costs:

Start by identifying the channels and platforms you plan to advertise on and determining the technology partners necessary to support those efforts. Building an in-house agency often begins with structuring the ideal tech stack, which can be a crucial step in gaining control over your marketing operations. However, this process involves navigating complex contractual agreements, securing licenses, managing annual subscriptions, and allocating user seats—all of which require substantial business acumen and significant capital investment.

For many brands, the barrier to entry in this space is high. Some tech platforms demand media spends of over $20 million or set other restrictions that can be out of reach for smaller or mid-sized organizations. While owning your technology provides a high degree of control and flexibility, it isn’t always the most economical choice. The costs associated with purchasing and maintaining the necessary tools can quickly add up.

This is where economies of scale come into play. Agencies, by managing media for multiple brands, often have access to these technologies at a fraction of the cost, passing along these savings to their clients. For many brands, partnering with an agency to access advanced technology platforms is a more practical and cost-effective solution, allowing them to enjoy the benefits of cutting-edge tools without the prohibitive upfront costs.

Talent: Hiring, retention, and attrition

Once you’ve identified the necessary components of your tech stack and organizational needs, securing the talent to run your operations is the next step. You’ll need to find the right people with relevant experience and knowledge to run your operation and ensure opportunities for continuous learning to keep your in-house agency fresh and on the cutting edge. Of course, recruiting top talent means providing competitive salaries that match a candidate’s expertise and experience, which can be quite costly, especially for smaller brands.

Moreover, it’s critical to consider employee turnover, how to strategically allocate resources to replace employees and onboard new ones, and the impact that employee attrition and new-hire onboarding has on productivity.

Expanding and contracting markets

In an ideal world, markets would remain steady and stable; unfortunately, that’s not the case. When in-housing your agency, it’s essential to consider how your business can successfully navigate periods of tremendous growth, demand, and decline. Understanding how you’ll maximize your human capital without burning them out during demanding seasons and how to mitigate business downturns without losing talent is tantamount to long-term success.

How can brands successfully in-house their agencies?

As mentioned, many brands bring their agencies in-house because they see the potential to save money, gain more control over their investments, and improve ROI. However, setting expectations with internal stakeholders early in your in-housing process is important, as transformational outcomes will take time to surface.

When embarking on this endeavor, it’s important to remember that:

Your brand direction should come from your long-term objectives, vision and mission. Ensuring your brand and media and creative agencies are aligned on your brand strategy—and can execute against it— is crucial.
Owning your own data is critical to success in today’s world. While it is fine to work with an agency to help you store, manage and interpret data, you will want to maintain ownership of your first-party data.

Furthermore, the road to success is unique for every organization. To successfully in-house your agency, it is critical to understand your organization’s objectives and examine different or alternative routes to reaching your goal. What works for one brand might not work for another.

Crawl, walk, and run to your in-house agency

Suppose your brand is absolutely set on in-housing its agency. In that case, a prudent and manageable strategy can involve establishing a crawl, walk, run approach. Below is a brief breakdown:

Crawl: Lay a foundation. Begin by bringing small, manageable portions of your digital advertising efforts in-house. This approach could involve managing specific campaigns or channels internally while the agency continues to oversee the broader strategy. The goal here is to build internal confidence and expertise without disrupting ongoing campaigns.
Walk: Building competence. As the internal team gains experience, begin increasing the scope of in-housed activities gradually. This phase might include taking over campaign management for a few additional channels, integrating data analytics, and starting to own more of the strategy and optimization processes. Begin investing in necessary technologies and recruit or upskill team members to oversee these technologies and who can handle the workload. Collaboration with the agency should shift from execution to advisory, with the agency providing support as needed. Remember to regularly assess the performance of in-house activities against the set KPIs. Use this feedback to refine strategies, improve processes, and ensure the in-house team meets or exceeds expectations.
Run: In-housing achieved. At this stage, the brand should be fully equipped to manage all aspects of your digital advertising in-house. The team should be confident handling end-to-end campaign management, from strategy and execution to optimization and reporting. Ensure your teams work cross-departmentally to make data-driven decisions across channels and platforms.

Conclusion

In-housing is an exciting and promising prospect for brands across the globe. Before embarking on your in-house agency and before partnering with an agency, be sure to ask yourself and your colleagues the following:

Is in-housing our agency the right approach for our business? Is it core to my company’s approach?
What expectations must we set to ensure our in-house agency succeeds?
Which model is right for our brand? Complete outsourcing, hybrid or complete in-housing?
What resources do we have for an internal team?
How can our agency help us achieve our goal? Are there different service models our agency offers that are better suited to our business needs?
What accreditations or certifications does my agency have?
Which partners and platforms do they utilize?
What media channels does the agency have?
Who is the team that I will be working with?
What fee structure and how many hours will this cover per week?
What does client communication look like?
What does the onboarding process look like and will discovery be a part of this?
What is the reporting and QBR cadence?
Will I have a bespoke dashboard that my team has access to?
How does my agency’s strategy and innovation team help the agency stay up forward thinking?

Remember, there is no right answer or one size fits all approach. Whether you choose to in-house parts of your media agency or bring it entirely in-house, your agency is your partner. Engage in honest dialogue with your agency partner to ensure a successful transition.

To learn more about the different pricing and service models that Digilant can provide, contact us here. We’re happy to consult with you to help you make an informed decision.