Marketing and advertising agencies must get over themselves in thinking that in-housing is a threat and instead understand the shifts that are affecting the evolution of the practice and adapt accordingly.
That is the stark conclusion of a new report from agency body the IPA, entitled “Shift Happens”, and authored by marketing consultants Rhona Glazebrook and Janet Markwick.
The report draws on in-housing research and is informed by in-depth interviews with agencies, intermediaries, new entrants, in-house organisations, procurement specialists and clients, to outline the variety of models and approaches that are in place today.
It also investigates why in-housing has matured to become so prevalent in marketing ecosystems and concludes with what the evolution of in-housing means to agencies today and in the future and how to develop transformational strategies and solutions.
“Shift Happens” also highlights four key shifts influencing the evolution of in-housing and the future of agencies:
A shift in media spend from campaigns to always-on experiences. Agencies must focus where the growth is and align their agency ambition. Crucially, agencies need to transform digitally. They need to be able to work with, or plug-in, customer data using automated processes to ensure that their models keep pace with advances in technology and with the growing number of in-house agencies who already have many of these capabilities at their core. As such, they must build deep expertise in these fields.
A shift in maturity, from in-housing as a newcomer to now being an established part of the marketing mainframe. Agencies must respect in-housing as an intrinsic part of the ecosystem that will help them succeed and should embrace and understand its value to clients. On this basis, agencies can replace trepidation with optimism.
A shift in value, from in-housing being focused purely on functional efficiency to incorporating more business-building capabilities. Cost efficiencies and quicker processes that deliver speed to market were the original primary reasons cited for in-housing, now effectiveness is cited as a key benefit of in-housing, according to the report. Agencies must therefore clearly identify their role within the marketing ecosystem and define and measure the value they will deliver.
A shift in value from ‘exclusive expertise’ to becoming ‘integrated partners’. Agencies must shift from being suppliers of marketing services to becoming truly integrated partners, ones with an inside-out understanding of their clients’ businesses and look for ways to integrate and transform using the power of creativity and strategic thinking within the marketing ecosystem.
IPA commercial leadership group chair Christian Byron, who is also chief operating officer of OMD UK, said: “In-housing has been with us for many years and has become an integral part of the marketing ecosystem. As this new report advises, for agencies to ensure they remain critical players in the marketing ecosystem of the future, they must continually assess the changing requirements and indeed capabilities of their clients – so as to better deliver complementary services, expertise and essentially incremental value.’’
Report co-author Janet Markwick worked both client and agency side at Coca-Cola, Sony, Grey London and Y&R before setting up Markwick Consulting in 2019. She said: “With evolution comes opportunities for growth. The old, linear processes are now dynamic, providing additional opportunities to deliver creative work. Agencies who embrace the power of technology to transform their businesses will be the ones who survive and thrive.”
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