By
Dave Nutter
We’ve been hearing from numerous marketing professionals about their ongoing challenges in the current market. Most of the lucky ones that have swerved waves of restructuring are under pressure to achieve more with less. Less budget, less resource and unfortunately less certainty (nice one cookie-less future!) and as a result they’re faced with making tough choices on budgeting and resourcing.
To in-house or not to in-house. That’s the question…
In a tighter market such as this one, alongside media pullbacks, naturally we see the “great in-housing debate” resurface in boardrooms and the attraction to “save budget” on agency fees by bringing strategy, creative & production in-house is understandably alluring. However, more often than not in my experience it can be a ‘red herring’ move that sounds logical, yet rarely is in practice. Quite often it’s an operational utopia that doesn’t exist or indeed last in real world practice. -Certainly in Digital anyway.
A decision to in-house requires a proper strategic assessment of the advantages and disadvantages for each particular business and, crucially, an honest appraisal of the skillsets needed.
Caveat: Now, clearly I have an ‘axe to grind’ as an agency owner, but I like to think my view is perhaps a little more well-rounded on the subject given that we created Perfect Storm in order to ‘lean into’ these client/agency challenges. More on this later you’ll be glad to read…
To make matters worse, the rise of AI has raised questions as to the future of the marketing industry as a whole and these two subjects alone are seemingly causing panic and confusion, only compounding the boardroom challenges. Without doubt, the industry is on it’s toes and evolving as a result. Many agencies are desperate to prove how integral AI is to their operations when very few understand it. -This adds to the perceived vagueness and trickery surrounding agencies – no wonder marketers are wondering if “the agency is dead”.
Of course, there are always commentators on both sides of the in-housing debate and often the most sensationalistic are published. I recently read an article in Adweek that caught my eye about the inherent problems with traditional agencies written by a CMO in the US. There are interesting points made but overall it’s a rather thin narrative that does little to consider the nuances and detail of resourcing. In my experience, there’s no universal solution that fits every scenario and to say agencies need to stick to creative and that brands are better placed to handle strategy does little to recognise the skillsets and experience that external partners bring.
Take time to consider the ups and downs
It takes time to embed good strategy and often resourcing challenges and skills gaps get in the way of progress. We’ve seen brands go around in circles, hiring and firing teams and agencies, often struggling to make it work for them in the medium to long term due to the changing nature of their business priorities. The reality is that there’s a scarcity of specialised talent in the market, particularly in high-demand areas of digital marketing: creative, paid media, data, cx/ux and even project management. Competition for top-tier talent is fierce, making it difficult for both brands and agencies to attract and retain skilled individuals, leading them to seek external resource. Too often I see one role being cited as the answer for a discipline/channel that we might deploy 4 or 5 people across. For example, hiring a Social Media Manager or a Search Manager. Rarely does one person have such specialist knowledge to straddle all the hats needed to an acceptable standard that moves the dial of performance – Strategy, Research, Data/Reporting/Analysis, Technical, Operating Tools, Ideas/Creativity/Writing and Internal Management to name a few disciplines. Invariably what happens then is, agencies/consultants are drawn back in to plug these gaps which is then when disconnecting strategies, poor prioritisation, slow progress and underwhelming performance creeps in.
There are advantages and disadvantages of each solution, so proper consideration against the business’s strategic aims is key.
There’s a misconception that in-housing delivers cost-savings
The headline savings by in-housing may seem significant on face value, but hidden costs such as extra layers of management, training, recruitment, additional tools and the ongoing investment needed to set up a new team can be a huge commitment for a business to sustain in the long run. Building an agency of specialists is certainly not easy!
Consultancies craft great strategy, but struggle to implement effectively
It’s widely acknowledged that establishing a robust and objective strategy is paramount, and often, external consultancies excel in crafting such strategies due to their ‘outsider’ viewpoint, comprehensive understanding of industry trends, platforms, and market dynamics. However, they often lack the ability to implement those plans well, being ‘outsiders’ and naturally service costs are high in this space of high value transformation projects.
Agencies are great at turnkey delivery, but their need to monetise everything creates barriers and biases
Many agencies struggle to fully grasp the intricacies of a client’s business challenges unlike consultancies, because their teams are frequently one step removed from the clients’ evolving day-to-day challenges in a corporate environment. They also struggle to provide unbiased solutions due to the way they are structured and maintaining experienced senior resource is a real challenge, frequently leading to junior overworked teams without the sufficient experience in navigating complex business strategies. High staff turnover in a competitive market is also a constant battle with a wave of experienced agency folk moving to more flexible freelance lifestyles.
Freelance talent is hard to find/manage and consistency of output can suffer
When it comes to leveraging freelancers to plug the gaps, there’s a potential risk of inconsistency and lack of cohesion if not managed effectively. Maximising the productivity of freelance relationships requires a profound understanding of their skill sets and how they align with overarching strategies. This can be challenging and very time-consuming, especially when freelancers are only brought in for sporadic tasks.
Despite our heavy reliance on freelancers in our own agency business model, it’s crucial to acknowledge the substantial time and effort invested in managing and nurturing these relationships to ensure mutual success.
Now’s the time to have your cake and eat it
There’s no one-size-fits-all solution to marketing operations, but in my opinion, working with our team at Perfect Storm is as close as it gets to the best of all worlds (I did say I had an ‘axe to grind’).
Our strongest client relationships are those that take account of our clients’ longer term business plans. Sure like all agencies we interrogate their business objectives, their sales environment and their marketing plans in order to deliver efficient and impactful strategies, but we also go further by helping build an activation plan that includes resourcing. We fill the gaps in internal resource, we train and upskill team members with efficiency and results in mind. We’re an agency working to make ourselves redundant effectively.
How do we do it? We bring together a unique blend of senior always-on strategists and client managers with the very best senior freelance talent in the sector, selected entirely based on what’s right for our clients and the brief in hand. We plan and deliver unstoppable digital strategies as well as ongoing training to nurture in-house teams through constant digital change.
So, whether you decide to work with us – an agency that’s built for this new marketing environment – or not, it’s time to rethink in-housing/outsourcing exclusively and crucially, think less about the costs and more about the strategic benefits to the business and its future.
If there are specific gaps that freelancers can fill better than agencies, then this should be embraced in my opinion. Also, there are going to be services and jobs that are better kept in-house vs delivered by an agency or consultancy. It’s about striking the right balance, ultimately.