Fri, 26 Mar 2021 12:07:02 GMT
Outsourcing versus in-housing. Businesses have long wondered, which is better?
Of course, there are unique benefits to each. And, today there’s even a way to outsource your in-housing with the specialists (see more on this later).
It comes down to knowing what’s best for your organisation.
Determining this, however, isn’t that simple. OLIVER has compiled the following list of pros and cons to help businesses determine in the first instance if in-housing is the right solution for them and their brand.
Arguably, the greatest benefit of in-house marketing and advertising is the close connection between the agency and the brand. It’s very much one team.
An in-house agency will know your company inside and out and is fully integrated with it. Campaigns will therefore be handled by insiders who share the brand’s values and mission. It also means that the agency team has the same goals and objectives as the brand – and this is, to make your company succeed.
With an in-house advertising or marketing agency, you never have to navigate through their priorities list or schedule an appointment to meet with them, nor will they be selling you anything more than great ideas. You will always have their fullest attention.
You have a lot more control over your advertising and marketing because this team will be dedicated 100% to your projects, all forming part of the same operation.
That last point also means there are fewer delays, which is extremely important in today’s world of fast communications. To illustrate, let's consider an advertising crisis.
Certain world events, like the COVID-19 outbreak, can alter the effectiveness of the perceived message of ads you've recently published. In a worst-case scenario, your ad might be criticised or deemed inappropriate.
In such situations, you need to respond immediately. Third-party advertisers won't be able to help all of their clients at once.
Fortunately, in-house agencies are there to act and respond in real-time. When a crisis hits, you and your in-house agency can start working on the solution right away.
There could be some drawbacks. Many of these have to do with the fact that, when you build your own in-house team, the risk is all yours.
Managing your in-house team
Brands that build their own in-house agency become 100% responsible for hiring, training, and coaching each employee on your in-house advertising team. This includes tasks such as performance evaluations, determining raise amounts, deciding who to lay off when you need to downsize, etc.
The bigger your in-house agency is, the more invested time that’s needed to ensure its success.
Building and managing your own in-house team will no doubt incur greater costs to your payroll. After all, you don't only pay for their salary, you also pay for their vacation, sick days, bonuses, insurance, pension, and any other benefits you offer your employees.
Furthermore, when you lose an in-house employee, all the money invested in hiring and training that employee is lost. Then, you must also replace them, which requires more time and money. It's estimated that the total cost of this loss is about 33% of the lost employee's annual salary.
One of the benefits of in-house advertising and marketing agencies is also one of its drawbacks. Since your advertising team is a fully-integrated part of your company, it can sometimes lack an outside perspective.
However, this is more of a trade-off than a drawback. And, as you’ll read below, it’s not always the case that you have to choose between the understanding and proximity that an in-house team brings and the excitement of fresh ideas coming from outside your business.
That last point illustrates the main advantage of outsourced advertising agencies. Specifically, the fact that they are separate from your company is their primary benefit.
An outside perspective
As we mentioned, it's very helpful to rely on advertisers who have an outsider's point of view. For one thing, they aren't subject to the "tunnel vision" of seeing things exclusively from your perspective. Thus, they can help you thrive by bringing something unique.
One of the biggest challenges of hiring any type of supplier is recruiting top specialist talent. It takes a lot of time and a hefty salary to finally obtain even one such expert to add to your in-house team. Even worse is knowing that these employees may leave at any time.
On the other hand, this level of expertise is precisely what you're paying for when you hire a third-party. Top-talent is the very product that they're selling.
Break into the market more easily
All these advantages are especially important for new companies that are entering the market for the first time. Effective advertising is extra difficult when you’re new to it.
Outsourcing to experts who have experience in your industry is often the best way for new businesses to get results fast.
No worries about turnover or downsizing
Outsourcing means you'll never have to worry about the cost of turnover because there is no turnover. Also, if you must downsize or expand, third-party advertisers can adapt to new needs.
Now, we'll see how this can be a problem for you. Here are a few ways in which a third-party ad agency might not mesh with your business.
First, external ad agencies inherently have their own agendas. At certain times, these agendas will likely conflict with your company's values or indeed ambitions and goals.
The agency you choose is your one-and-only advertising team. And yet, you are rarely their only client. This could easily influence how committed they are to your brand’s day-to-day success, with their time and focus split in many directions.
Today, you might not need to choose between outsourcing and in-housing your marketing and advertising – because there are ways to have the best of both.
Many in-housing specialists today give brands their own dedicated and bespoke team, as well as the external firepower that they need from capability specialists. These types of suppliers will design, build and run a brand’s in-house agency for them – taking out the pain of embedding people, process, and technology – but also offer a hub of talent that sits external from the brand to call on for support when needed. This allows brands to scale-up and down when they need, and ensure that their creative output is always going to get the cut-through that they want.
As you can see, the marketing and advertising landscape today has changed enormously. No longer is there one way to work with suppliers, and you get to choose the exact service that’s right for your business.
In a year like 2021, it’s time to take advantage of this.