Brands are bringing agency services in-house at a rapid pace. It is a trend that continues to increase in momentum; with good reason. Traditional agency models can be slow and expensive, and the ongoing pressure to lower fees has chased great talent out of the ecosystem. Any savvy CMO worth their salt would review the in-house option regardless of the health and productivity of their current agency relationships. The “in-house” trend is something that we as agency executives, cannot ignore. There are inherent advantages to having everyone under one roof. While most will assume this arrangement would require the creation of its own internal department, there are alternate with more effective results.
We were recently given the opportunity to partner with the new executive management of a decade-old brand. They were facing questions of relevance with consumers, longevity with shareholders, and overall company valuation. During the rapid on-boarding with the Team, the client evaluated the existing infrastructure, inclusive of legacy employees, and decided to do significant housecleaning. The result was a CMO with no marketing team. Rather than trying to backfill, the new CMO decided to try something radically different: she moved into our office. We in-sourced our client. Admittedly, this is a set of unusual circumstances. However, we’ve seen the following five benefits that agencies and brands alike, can realize.
- Transparency. Because the client sits down the hall, we are certain to be working from the same playbook. The client is always in the room and knows exactly who is working on what and the rationale for the fees. For these reasons, she is completely vested in the plan.
- Speed. Traditional agencies dedicate too much time filtering what the client sees, wasting valuable hours and mindshare. In this new model, the client is part of the conversation and sees the raw thinking. Looking back, I’ve spent my whole career ensuring that what the client sees is near-perfect. Now, we move much faster and the client is part of every step of the process. It also allows our client to share the information with her team without unnecessary reporting from our team.
- Trust. There is a high-level of unbridled trust across the entire ecosystem. The client trusts us because she has visibility to how vested we are in her business. We have eliminated the need for filters.
- Client Visibility. Agencies suffer from a lack of exposure to a holistic understanding of the business. To a typical agency, brands are like icebergs. Agencies only see about 10% of what is happening within a brand. Thus, the thinking tends to be very idealistic, instead of actionable. Factors such as pressure from a board of directors, share-holder expectations, true cost of goods sold, etc., are often kept from the agency. This new model immediately required us to up our game. Now we know what our client knows so our ideas and approaches must sit within the realities of the business.
- Savings for the brand. In-sourcing advocates love to talk about cost savings. However, if priced and staffed properly, there should be no way a brand can staff cheaper. Here’s why: in this case, the staffing model forecasts nine full-time employees. But, that doesn’t mean nine people are working on the business. It’s 27 different people with wildly different skillsets that add up to the nine. If our client were to hire 27 full-time employees, the price-tag would double, and cause other headaches in regards to benefits management and HR.
As you evaluate the benefits we’ve realized utilizing this structure, keep in mind that the circumstances around this model are unique. It is a huge shift in the client/agency relationship. However, a take-away brands should consider is placing one of their key employees inside their agency. Whether the agency is imbedded with the brand, or the brand is imbedded within the agency, the resulting proximity and openness, allow for better work in less time, with a smaller financial footprint.
About Sean Baker:
Sean Baker is president of IMM, a full-service digital marketing agency focused on building national marketing programs that get smarter every day and increase in value over time. Baker joined IMM in 2013 as SVP, Client Services, overseeing account strategy and execution on behalf of clients. Prior to IMM, Baker spent more than 15 years providing account leadership across a range of verticals. He received his undergraduate degree from McMurry University and his JD from OCU School of Law.