A slight departure from our usual luxury marketing related topics, today we want to talk about a discussion as old as time, in-housing vs hiring marketing agencies. The question has been in the air for quite some time: which one is better? what produces more ROI? And no matter what kind of industry you are in, the trend for in-housing has been taking over the minds of business people across all sectors. You can argue that on the first thought, it makes sense.
Over the last couple of decades, a lot of companies have at some point been burned by their external marketing partners. Horror stories of “black box” agencies that seem like they came straight from Madison Avenue and Mad Men type companies, operating with zero transparency, overcharging their clients and under-delivering at the same time, creating campaigns that are completely off-brand, and so on and so forth, still haunt a lot of marketers and CEOs to this day. And so the brilliant idea of in-housing must have seemed like the holy grail that would solve all these problems and deliver magnificent results at a fraction of the cost at the same time. But is in-housing really that magic bullet everyone tends to think it is or is there more to having a powerful marketing strategy than just hiring a lot of people?
Before we deep-dive into this topic, I want to kindly remind you, that the glorified era of Mad Men is way past behind us, and there are agencies out there (us, for example) that prefer to be transparent with their clients and use strong business ethics in dealing with their clients.
Why Brands Move Marketing In-House
Quite unsurprisingly, one of the major reasons for in-housing is cost-saving. It is old news by now that businesses are always looking for a chance to “strategically reduce cost”, and unfortunately, a lot of organizations see marketing as a scapegoat of sorts and quickly opt-in for reducing their expenses by taking marketing and creative resources in-house. Additionally, in-housing also promises better, more efficient use of the existing budget, greater control over all elements of marketing campaigns (creatives, technical set-up, data, analytics, and so on), a higher level of brand consistency, as well as a higher level productivity and quicker turnaround times. By now obviously, the alarm bells of realism and real-world experience should be ringing loudly in your ears.
According to Marketing Week, for the majority of the brands in-housing has failed to live up to their expectations, ironically, especially when it comes to things that we mentioned before like increased creativity, productivity, transparency, faster scalability, and cost-saving (yes, in-housing often costs more than hiring an agency, surprise!)
Why In-Housing Might Not Be The Answer
As I just mentioned, in lots of cases in-housing fails to live up to expectations of board members and c-level executives who promote it internally, and if you really think about it, it makes totally sense. First of all, putting together a big in-house team that is supposed to take care of all your marketing activities, from creative production and technical set-up to media buying, email automation and analytics, is harder than you might think, especially if you are just starting out with your business or you are on a smaller side of SMBs. The truth is, it takes more than one or two, or even five people to manage all digital marketing activities for a brand, and don’t even get me started on traditional marketing (events, brand marketing, out-of-home advertising, customer marketing and so on).
On top of that, sometimes we experience the sad fact that business owners or managing directors completely ignore the fact that they actually need to continuously invest in their employees to compete with the cutting edge know-how agencies work so hard to maintain. If you want to have an outstanding team, you have to encourage and support their professional development, so they can stay on top of things happening both in the industry and their area of expertise (for example, the latest martech, new emerging social media channels, changes in programmatic buying, the psychology of luxury copywriting, and so on – all things we try to stay on top of, by the way). In the world of luxury marketing and digital marketing in general, it is evolve or die for service providers. So we work hard to always know a bit more than our clients, even if we deal with enterprise companies.
Another thing is that in-housing creates an echo chamber where, to put it frankly, creativity comes to die. It all might work perfectly fine at the very beginning, but after some time creative stagnation and fatigue will settle in. Being cut off from external teams and external inspiration comes with a price. Most likely your team will start operating in a black box environment where no decisions are being questioned, the creative range of ideas shrinks significantly and everybody falls into BAU (business-as-usual) mode. This is a very slippery slope, as we all remember what happened to Dolce & Gabbana after their 2018 campaign, or the infamous Pepsi’s Kendall Jenner ad, which is easily in the top-3 of the biggest in-house marketing fails of all time. In-housing leads in the long-term, in most cases, to a stale brand, no outside perspective on what might work or not work, no ground-breaking new concepts, no push for creativity or any kind of operational improvement. In the agency world, on the other hand, creative talent thrives and out-of-the-box thinking as well as new ideas and technologies are highly encouraged.
One more downside of in-housing, and it is directly connected to my previous points, is that if you as a business owner fail to provide sensible skills development options, don’t motivate and inspire your talent, you will end up with an uninspired, unproductive team that for the biggest part sticks to outdated marketing practices and technology and sucks up a lot of costs in terms of payroll and benefits. At the end of the day, in pursuit of cost-saving, higher productivity, and a “iron fist” control over your brand image, you might end up with the completely opposite spectrum of results.
Agency Or In-Housing: Which One
Should You Choose?
While there are cons and pros to in-housing (as there are pros and cons to everything in life), I believe that there is no binary answer to the “hire a permanent in-house team or the external marketing agency” question, as it shouldn’t be a binary option. There are different ways you can use a specialized agency to help your internal team with certain activities, for example, take a significant workload off them, improve your current marketing efforts, or teach your team something they don’t know yet. Regardless of whether you have an early-stage company or a well-established multi-national brand. Partnering with a specialized marketing agency also doesn’t mean that it will replace your internal team completely, but rather complement it in areas where they might be lacking. And this applies for in-house teams that are 5 people all the way to 500.
Digital marketing (or direct mail in some cases), especially targeted towards affluent travelers, is much more complex than just having a nice polished website and running boring ads with glossy images. Partnering with a specialized agency, whether it means outsourcing parts of your marketing process, working together with an internal team in a consultative manner, or taking care of a specific project, will provide you with unbiased opinions, fresh perspective, creative ideas, and cutting edge know-how. If you’re wondering whether we are the right agency for your brand after reading this, don’t hesitate to fill out our callback form.