Reports of the impending demise of marketing and advertising agencies are yet again making headlines, and are still greatly exaggerated.
The latest headlines, based on the Association of National Advertisers research, notes that three out of four marketers have in-house capabilities. The same research also acknowledges that 90% of ANA members still have a relationship with an agency, proving that agencies endure as we undergo the most massive transformation the industry has ever experienced. It's also worth pointing out that some of these respondents may work at in-house agencies—the industry should be wary of reports where respondents are rating themselves.
Brands may move from agency to agency—that will never change—but to win over the people who buy their products or use their services, external partners are imperative.
But, to be fair, there are reasons this notion took root in some way. The increased complexity of business and marketing today, and the velocity of change, continue to accelerate, along with the impact of technology. Calls for greater transparency have led brands to consider looking closer to home for their marketing. The arguments for taking communications in-house are well-rehearsed. Employing teams directly could save time and money, and could also provide greater control over output.
In some cases, there are areas of expertise that make sense to keep in-house. For example, given the potential liability associated with social media and the increasing need for a tighter connection to legal teams, it could be beneficial to have this offering in-house. Similarly, companies with rich first-party data may consider keeping programmatic and data management offerings internal. Although, just a few weeks ago, telecommunications conglomerate Vodafone, one of the world's largest marketers, reconsidered bringing its programmatic buying in-house due to the many complexities and challenges of building an in-house trading desk, from talent to technology.
But, the ANA report isn't telling the full story.
The solution may not be to have internal or external creative work, but to strike the right balance of both. During a recent keynote, Claudine Cheever, Global general manager of marketing and advertising at Amazon, noted that agencies and clients should demand a two-way relationship built on trust: "We need agencies: we need that outside provocation and perspective to create work that is brave and bold from our agency partners. Agencies are masters at storytelling."
External agency partners offer more careful and thorough consideration over ideas that might not otherwise land well. In the ANA report, 39% of brands note that one of the biggest challenges in-house agencies face is delivering great creative. What happens when brands don't have a connection to external perspective and provocation? You get creative work like Pepsi's tone-deaf Kendall Jenner ad. Most marketers and agency observers agree that, had there been some external perspective, Pepsi would never have produced the cringe-worthy spot.
This balance is crucial as we've found that in-house agencies rarely employ rising stars, with brands typically ending up with less experienced staff or burned out industry veterans ingrained with a commitment to toeing the brand line. Conversely, agencies are tasked with winning over the client time and time again, guaranteeing hungrier, more competitive and provocative partners.
The advice often given to those looking to get into the marketing industry is to go work at a marketing communications agency. Agencies are filled with talented people who have an entrepreneurial spirit and know how to work collaboratively to generate the best thinking and ideas to strengthen and grow a client's business. It's the best training and experience a person can get. Unfortunately, it's why people with agency experience are so attractive to marketers, platforms and publishers. Some of the leading CMOs and marketers in the business today have agency experience that helped prepare them for their current roles.
One critical benefit of going (or staying) external is the wealth of cross-brand and category learning agencies can provide. The fact that different skill-sets and outlooks reside at an agency provides a competitive advantage for business survival, especially in the constantly evolving and rapid-fire world of marketing. This applies even more to global brands, which rely on their agencies to understand local complexities in international markets that any in-house team won't have exposure to given their vantage point from headquarters.
The top agencies can bring you the best of all worlds. Treat them as a specialist and trusted extension of your own marketing and/or in-house team, and they'll reward you with boundless value in the form of insight, creativity, and perspective. Ultimately it's about driving business growth and outcomes.
Who wouldn't want all that?
Marla Kaplowitz is president-CEO of the 4A's