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Marketers look to in-house agencies to cut costs

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Marketers use in-house ad agencies for a variety of functions, including producing marketing collateral (97%), internal communications (82%), internal videos (69%), brand identity (66%), direct mail (65%) and Web site development (65%). Some marketers use in-house agencies to handle creative development of advertising. The ANA survey found that 56% of marketers with in-house agencies use them to produce magazine ads; 15% produce their own TV spots; and 15% produce radio ads. Fidelity Investments has an in-house agency that handles creative development for all media except TV, media planning and buying, collateral production, direct marketing and Web initiatives such as webcasts. The company also has an agency of record, Arnold Worldwide, New York, which it uses primarily for TV spot production. Jennifer Engle, a Fidelity spokeswoman, said there are several benefits to using in-house ad agencies. “They have a strong understanding of Fidelity's businesses, and they are very responsive,” she said. “We have creative control and brand consistency, and there can be cost savings.” She declined to comment on the size of Fidelity's in-house agency or specific projects it has handled. Marketers with in-house ad agencies also face challenges. These include “getting respect and delivering the quality of work that outside agencies can provide,” Duggan said. Nancy Hill, CEO of the American Association of Advertising Agencies, said most major advertisers have some form of in-house advertising capability and that it is important for their ad agency partners to work closely with them. “No. 1 is understanding that they are inside the company, and they will have something to offer that you may not,” she said. “The trick is for the outside agency to understand how to push the client and the in-house agency beyond their comfort zone in a way that will not alienate them.” Hill also said that working with an in-house agency is similar to working with a sibling agency at a holding company or multiple agencies on a client roster. “You have to make sure everyone understands the client's agenda, is on board with it, agrees to it upfront and is willing to work together toward the objective.” M
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