As marketers seek better agency over their efforts, so many are bidding farewell to external agencies and bringing more activities in-house. Much of this is driven by aspirations to reduce cost, improve business intelligence, and move more quickly in ever-changing markets.
Indeed, according to a recent survey of over 400 marketers, the top benefits of moving agency activities in-house are:
- Cost efficiencies
- Better knowledge of brands
- Speed & nimbleness
- Institutional knowledge
- Creative expertise
- Greater control
Specifically, 38% of marketers cited cost efficiencies as a key benefit for in-housing agency activities. While this is a fairly understandable concern, the more interesting insights might be found on the second and third benefits noted: knowledge and nimbleness.
While nearly one in five marketers (19%) feel that their campaigns benefit when managed by those who know their brands best, one eighth are more interested in being nimble enough to quickly react to the unknown.
The common thread between these seemingly opposed attitudes lies in a rather simple truth: as audiences become more fragmented, so traditional targeting tactics simply don’t work.
How many agencies have told marketers that their ideal users are within a particular age range or other simplistic demographic grouping, only to be wrong because they don’t fully understand the brand’s appeal to other groups? How many brand marketers have been caught off guard by sudden shifts in the ecosystem that either fundamentally changes who their audience is, or changes how their audience is likely to respond?
Relying on restrictive third party solutions no longer works for these marketers, and they are actively taking more activities in-house as a result.
Granted, while more activities may be moving in-house, the tech itself still often doesn’t. Why? Simply put, while daily operations are more cost efficient in-house, development and setup of proprietary tech is not. According to a summer survey of media agency professionals, 70% noted that setup and maintenance costs are a key factor in their decisions whether to build their own tech or license third party solutions.
As a result, the industry is currently relatively split:
- 32% of marketers handle all activities in-house using a third-party DSP solution.
- 33% of marketers handle all activities in-house using enterprise software
- 35% of marketers use both a DSP and an ad agency.
As DSPs make strides toward increasing usability — as was the case with Sizmek’s most recent update to its self-service platform — so this split is expected to shift over the next two years as more marketers turn away from cumbersome custom enterprise software in favor of more intuitive tech stacks that enable the nimbleness they seek.
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