In- or Out-Housing?

Weirdly it was only last week that The Cog Blog was chuntering on about how good we are at polishing up new ideas and reinventing the wheel So let39s look at the history and the pros and cons of clients doing it for themselvesIf you were a TV buyer in the 197039s and early 198039s your favourite quotclient you loved to hatequot was Procter and Gamble I should add that PampampG might have been one of only very few but they weren39t unique It39s simply that I grew up on their business so I know them bestPampampG did their own TV buying They had an inhouse team led by the formidable Bernard Balderston which would even buy down to the spot level and would then fax the agencies what spots they had bought The agency would then enter the buys onto their systems thus making it possible to claim the commissionProcter also developed a brilliantly simple argument to use in negotiations They believed fundamentally that TV advertising worked so more TV advertising worked better They allocated regional TV budgets on the basis of share of sales if your region generated 10 of sales you got 10 of the moneySo if you give us a cheaper deal we39ll end up with more advertising that will generate more sales and more budget for you next timeThe quotjam tomorrowquot tactic in other wordsPampampG were masters of the inhouse approach Over time maybe even at the same time Nestle Mars Unilever were doing something similar Unilever had way before then started an internal agency which became Lintas Unilever or maybe Lever Advertising ServicesYears later Unilever was among the original funders of Brainjuicer the research company now known as System 1 Investment in expertise comes in many flavoursThis bringing stuff inhouse wasn39t confined to the UK There was an agency in Holland called I think Kobalt that was owned by a consortium of advertisers lead if memory serves by Heineken Mercedes Benz started Debis in Germany Both closed rather fastInhousing isn39t new but it39s improved and evolved It39s no longer purely about buying cheap stuff and it39s no longer loathed as a concept by the agencies some of whom Oliver being the best example have embraced the idea and are working to help clients set up strong inhouse modelsThe best inhouse teams improve planning by ensuring that the client39s proprietary firstparty data is available and used Many are by definition fleeter of foot than any agency when it comes to reacting to social mediaAll the inhousers and this is surely the defining factor take media at least and often beyond media to embrace all aspects of communications seriously and see it as a key business driverAfter all most boards will likely believe their own people their own experts over what they see as a justification of their existence by their agenciesThere are naturally cons tooInhouse operations aren39t always that objective Who after all tells them they39re doing a poor jobMost comments in the public domain from inhouse teams talk of how much they39ve saved hardly surprising given the fees saved and the lack of identifiable costs and how wonderfully integrated life is Mostly this is hogwashOthers see this type of organization as a stick with which to beat the agencies Lloyds39 comment that quotnoone in agencies can write these daysquot was misinterpreted but it can39t have added a lot to agency client trustThen there39s the career path matter If you39re a media guy in an agency you have a clear route ahead with options along the way If you39re an inhouse media guy at a client your options may well be more limited One route is to move up the marketing ladder at your organization or at another client but your skills may not prepare you for that Or move to a sales house or agency which few do successfullyThen there39s the term itself Inhousing isn39t a great descriptor suggesting as it does something divorced from agencies something limiting even something antiagencyFar better to see what is happening at these advertisers as one element within a digitallyled transformation of their marketing operations as a result of which certain but not all marketing decisions are taken faster and smarter than going through a briefing meeting responding redrafting systemNot as snappy a headline though I39ll give you thatClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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In- or Out-Housing?

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Brian Jacobs

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