Better Together

Better Together

1920 1517 Hunt Adkins

A case for the modern in-house agency to work with external agencies instead of forgetting about them.

 

bar graph showing in-house agency penetration increase from 42% in 2008 to 58% in 2013 to 78% in 2018

Unless you’re still conducting three-martini lunches, asking your agency to bring their projector to the presentation or expensing your 64-ounce tomahawk steak dinners to the photo shoot, the rise of the in-house agency is no secret to you.

According to a recent study from the Association of National Advertisers, 78% of advertisers had an in-house agency in 2018, up 20% from 2013 and 36% from 2008.

 

There are many sound reasons for the growth of the in-house agency:

  • An in-house agency can provide the full range of traditional agency services in addition to more focused capabilities that require real-time support such as content marketing, SEO, primary data analytics and influencer marketing.
  • Processes built on institutional knowledge, history and continuity.
  • A dedicated staff only an office or floor away allows for last-minute meetings, quick requests and within-the-hour turnaround times.
  • And arguably the number one reason—cost savings.

The common-sense appeal of these benefits is hard to argue. For decades, in-house agencies have been delivering cost-effective tools and materials on behalf of their brands. Who can argue paying $300 an hour when $50 an hour can get the job done?

So, given the above, if you can staff in-house, why work with an external agency partner at all? If you’re simply looking to augment your in-house staff’s bandwidth, you shouldn’t. Hire freelance. Hire contract. Save your time and money. However, if you’re looking for efficient problem solving and specialized resource management, an anchor agency will make your in-house agency stronger.

 

Drawbacks of In-house as a Standalone Agency

To frame this argument with context, let’s take a look at drawbacks inherent to relying on in-house agencies as the sole provider of strategic and creative services, and follow up with the solutions external agency collaboration can offer.

Drawback #1: Internal Politics

An in-house agency is subject to more downward political pressure than an external agency. In a siloed environment like this, it’s far easier for a superior to kill a great idea or, worse, force through an inferior one.

Resolution: External Objectivity. An external agency partner can offer an unbiased third-party point-of-view without the immediate fear of “losing their job.” When working in true collaboration with the in-house team, an external partner can take on the political pressures required to accelerate a big idea, as the bigger risk to them is to let something with insignificant business impact through. As industries get more competitive and cost of attention increases, it’s increasingly difficult (and expensive) to get a message out. There’s no room for “good enough.” Success demands that well-executed transactional engagement and industry-transcending big ideas be championed in a collaborative ecosystem.

Key Takeaway: External agencies are a powerful partner when fighting for big, transformative ideas, because both your business and theirs depend on bringing these ideas to life.

Drawback #2: Diminished Disruption

Creativity is no longer a strategic differentiator; it’s a table stake. And creative, innovative people with the innate ability to produce significant, on-going change (growth) have short attention spans. It comes with the territory. They need ever-changing challenges to keep them interested, and working for one brand, in one vertical or with one management team, every single day, can be a prison sentence. Simply put, it kills disruptive thinking.

Resolution: Constant Collaboration. An external partner provides your in-house disruptors and innovators people to bounce ideas off who will challenge their thinking and approach. This helps to build an operational system of constant improvement, both internally and externally, increasing the likelihood of breakthrough ideas. Conversely, allowing your external agency partner true collaboration with your in-house agency—versus working in a silo or simply executing requested tactics—allows them to understand the challenges of commercial and operational realities while not being handcuffed by them.

Key Takeaway: Charge your external agency with proactively bringing ideas forward to challenge the usual way of doing things. Encourage them to collaborate regularly with in-house staff and together, chart a path to the future.

Drawback #3: Category Inbreeding

Working on one brand every day for years creates “category inbreeding.” Having one point of reference through a single vertical lens limits opportunity for and likelihood of radical business-building work.

Resolution: Category Cross-Pollination. One of the most underrated side benefits of the multi-category, multi-client agency model—and the talent that gravitates to it—is the cross-pollination of ideas that occurs when working on a variety of brands. A lesson an external agency has learned in one category can save significant time, resources and budget when an in-house team is exploring a new idea in theirs. Experience with, and understanding of, a wide range of trends and threats can help guard brand and business alike. A marginal idea in one category can evolve into a groundbreaking idea in another.

Key Takeaway: Big ideas and business growth require treading into unexplored territory. An external agency is your seasoned, savvy guide.

Drawback #4: Staffing Compromise

What is the price of cost savings? Junior people will typically take longer to get to a lesser idea. Senior people can get to big ideas quicker and require less business onboarding. The need for specialized skills and focused expertise can ebb and flow with marketing and business activity, making resources required one quarter irrelevant the next. Goals are missed when people need unplanned (or even planned) time off. It can be financially impractical for an in-house agency to hire and retain the required breadth, diversity and seniority of staff to meet goals with, practically speaking, just one client to charge their time against.

Resolution: A la Carte Talent. External agencies assign senior and specialized employees (most employees, in fact) to multiple projects and accounts to optimize outcomes and value for both client and agency alike. The external agency manages capabilities and resources to fluidly adapt to a client’s changing business needs, relieving the client of on-going maintenance and overhead costs associated with full-time or contract staffing.

Key Takeaway: The external agency’s staffing model provides an opportunity for in-house agencies to tap into talent who are familiar with the brand on an as-needed basis, or shake things up at a moments notice, without the hassle and expense of the typical hiring and on-boarding process.

 

Evaluating the Anchor Agency Partnership

From a big picture perspective, it’s still all about finding the right partner.

Oddly, brands large enough to create in-house agencies often leave their large and expensive external Agency of Record only to replicate the same structure (and issues) in-house. Or, in an effort to move more quickly, they build out capabilities in-house, continuing to use their existing one-stop, monolithic AOR agency on a more limited basis. But that shotgun marriage rarely works. Big box agencies are beholden to the financial returns required by holding companies, creating the ugliest of poaching scenarios: the external agency competing with the in-house agency for the choice projects and margin opportunities—both of which conflict with the purpose of an in-house agency.

The right partner for brands—big or small—has a collaborative perspective that is operationalized across their organization. They have the confidence to both challenge and support the in-house teams. Financially, they think like a client, not a holding company CFO. They are focused on outcome over output. They want to work with, not against or apart from, their clients’ in-house teams.

 

 

At Hunt Adkins, we believe in efficient problem solving and specialized resource management. We have built our model to be most helpful to brands seeking an external agency partner that can drive growth (or fix problems) across all areas of business with human-centered, purpose-driven problem solving, efficiently and effectively. We forecast, plan and pinch-hit. We believe in integrated contribution. We are pencils up when you need us, not pencils down when you run out of money. We are not an end-of-the-line producer or single-channel partner, and we have zero interest in fighting with your internal department over art direction and headline copy.

We are an anchor agency. A CEO and CMO’s right-hand wo/man. We are a disruptor, objective, outside point-of-view, a strategic business consultant, a brand or creative platform creator, a big idea generator, an air traffic controller and a partner that you can count on to get you back to where need to be when you’ve veered off course or experienced a major setback. We favor collaboration with in-house agencies and outside vendor partners. We are the antithesis of the traditional agency mercenary, steal-any-business-you-can approach.

This is not a positioning play. In 28 years of business, it’s what we found leads to best success for both in-house and agency alike. It’s the best path to real, significant business growth. And that’s what we’ve always put first. – PH