The Rise of In House Advertising Agencies

On August 27th, The Wall Street Journal published an article entitled, “In house agencies on rise as advertisers seek services closer to home”. I found it interesting and mildly surprising. Three MR readers coincidentally e-mailed me the link and asked that I cover the topic. Hence this post.

Over the years, In house advertising agencies did not have the greatest reputations. Generally, they were formed as a means for the parent company (the advertiser) to save money. Agency people were often their worst enemy. Clients came to believe that agency staffers were arrogant and charged too much for their services. They also flaunted their high incomes. Many is the time that I arrived with a creative or management rep at a client meeting in one of their Mercedes or Jaquars. The client would sometimes say something to me afterwards. They felt that the agency team was rubbing their affluence in their faces.  Agency people also often talked of their fabulous vacations to marketing people client side who were struggling financially. It did not play well and, years later, when I ran in to former clients, it has often been a topic of conversation. So, many felt that a move inside would save a boatload of money and the work would be almost as good.

On the negative side, there was a stigma for many regarding working at an in house shop. The conventional wisdom was that there was little turnover and a true ad pro would want the fast pace of traditional agency life and enjoy pursing new business plus working on a variety of type of businesses. Many of my peers said in house was great for collateral material or grinding out coupons or Free Standing Inserts but fresh thinking had to come from the sharpies at ad agencies. If you worked on only one piece of business or category, you would get stale.

Things appear to be changing and in more ways that the splendid Wall Street Journal piece discussed.

I hunted up some people who I knew casually who worked at in house shops. A few former colleagues put me on to some others. Here are some comments from people currently working in house:

—“We went in house several years ago. It was a good decision. We move quickly (no waiting for our big shop to get a work starter wending its way through the creative department), save money, and our people know the brand. Our company is the brand. Amazingly, some agencies do not get this.”

—“Friends made fun of me when I went to a large in house shop. Well, the staff is professional and the hours are great. Sure, I work late every now and then but I only went in on two weekends last year. No new business to pitch so we focus on our assignments and are really good at time management.”

—“I am a single Mom and the benefits at my huge company dwarf that of any agency that I worked at. The health care package and 401k is so much better than my agency experience. Also, twice I was let go when my shop lost a big account. I was told that I did nothing wrong but they had to cut expenses. I do not have to worry here about what you often refer to as ‘the leaky barrel’ of agency/client relationships. It is not totally secure but better than I have ever known.”

—“The stigma of working in house is lifting. I like the better hours and benefits plus the salary is comparable to ad agency levels. We are nimble here and there are far fewer levels of review. Also, we do not suffer under an egotistical creative chief who hates ideas that were not his.”

—“Ad agencies do not get it. As a total percentage of marketing spending, advertising continues to decline here. Also, we deal directly with Google, Facebook, and lately, Amazon for our on line advertising needs. The reps are young, smart, state of the art, and, AND THEY LISTEN!  I see us using a free lancer or two in a few years for theme lines or a new set of eyes but we will not need an outside agency much longer.”

—“As we move to digital, we deal with the FANGs sans Netflix. What pros!”

Agencies are not going to disappear. Yet, in an era when accountability continues to become more prominent and measurement metrics improve, the trend of a movement toward in house shops seems likely to continue.

If you would like to contact Don Cole directly, you may write to him at doncolemedia@gmail.com or leave a message on the blog.