Agencies

Why the Drastic Rise of In-House Agencies Shouldn’t Surprise You

According to a recent article in the Wall Street Journal, advertisers with in-house agencies increased to 64% from 42% a decade ago. Surprising? Not really.

As an agency search consultant at AAR Partners for the past 17 years, I’ve witnessed a cyclical pattern that seems to happen every five years: advertisers bring accounts in-house then they revert to outside agencies, and it seems to go back and forth every half-decade. Of course, we can’t ignore the transparency issues in ad buying that has been under scrutiny for the past couple of years.

“I believe that trust between advertisers and agencies is lower than it’s ever been because agencies keep denying there are transparency issues.” -Bill Duggan, Group EVP, ANA

As mentioned by Duggan, the transparency and trust issues have undoubtedly led to having more clients bringing their accounts in-house since a successful relationship cannot be achieved without either of these critical factors. But the bigger question stemming from Tuesday’s article is, what can agencies learn about new business and prospecting new clients?

There are many variables for a successful client-agency relationship, and there are many check-boxes to be ticked when marketers select an agency to manage their account. Some of those criteria include:

  • A robust strategy
  • Innovative, creative, insightful and real-time analytics
  • Compatible chemistry and culture.

Of the many needs, there’s a handful that bubble to the top:

  1. Knowledge of the brand: There isn’t an agency review where the marketing team doesn’t evaluate the agency’s understanding of the brand and more importantly, their learning curve of the brand from the start to the end of the review. It’s essential for the marketing team to see how quickly the agency learned some of the primary KPIs, operating procedures, brand guidelines, etc.
  2. Knowledge of the business: It has become quite common for marketers to want to select an agency that can not only offer solid MarCom solutions but also understand the operations of the business. When AAR Partners helped manage the American Airlines review a few years ago, the client team was very clear that the agency needed to have a solid understanding of the airlines business.
  3. Cost-effectiveness: This one shouldn’t be shocking. Cost-consciousness and efficiency is the price of entry today. Responsible spending is expected. When AAR Partners managed the Ancestry review earlier this year, one of the key criteria was to select an agency that had stable and efficient production capabilities. Every marketer needs to show cost efficiencies which affect their ROI.
  4. Speed: Unfortunately, many reviews happen because agencies are slumberous with laborious layers to jump through resulting in missed deadlines. Agility and speed are vital today. Long gone are the days of the 30-second TV spot taking weeks or months to produce. Real-time speed is vital to get the most from digital media. Missed deadlines equate to complacency which is a top reason for marketers to call a review!

The bottom line? The marketer’s business IS the brand, and the more nimble, proactive, and efficient the agencies are about the brand the better. Clients don’t just want but rather need agencies to be business solutions partners that are media agnostic, analytics-driven, and of course, transparent and trustworthy.

Tags: Client-Agency Relationships, Marketing

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Lisa Colantuono

An avid writer, Lisa has contributed many articles in top industry trades such as Forbes, Huffington Post, Advertising Age, Adweek and HubSpot Blogs’ Agency Post. Recently, Lisa entered the world of publishing with her book, @AARLisa: New Biz in 140 characters (or Less), written for the on-the-go new business exec that needs cut-to-the-chase insights to nail new business wins again and again. Lisa is also part of the industry speaking circuit, presenting at national conferences including 4A’s Transformation Conference, AAF Admerica National Conference, BOLO, HOW Design Live, Mirren, and AdAge Small Agency Conference.