In-house Advertising against External Ad Agencies

The economic meltdown was a major global disaster that crippled many strong economies. It resulted in companies reducing their staff; some slashed remunerations by 10 per cent and budgets were reviewed.

On the down-side were bankruptcy of small and medium scale ventures, mergers and buyouts. The melt-down, however, brought about corporate improvisations, one of which is the in-house advertising agency.

Under such an agency, marketing promotion is done by members of that company and not contracted out.

Sometimes the buying arm of the business may be contracted to an agency but retains the creative arm and company communication. In other times the company retains control of its own advertising and marketing communication.

Many companies create in-house ad agencies to achieve cost efficiency/cost savings. Their reason for doing this is to create a consistent brand message alignment.

Another reason is that most companies want a fast-paced response in the market. It is believed that nobody understands a brand better than the owner. When a company needs re positioning  it would take an in-house agency to prompt such actions because they understand the pulse of the product or the company in the market place and wouldn't want to delay in responding to the change or else they would be overtaken by competing brands.

Full attention can be devoted to the brand if an in-house agency handles it. There would be no case of a brand competing for an agency’s attention.

Most outside agencies usually control several accounts with different briefs and goals, and often times less attention is paid to some accounts; this happens when a new account is won.

Advertisers sometime want their marketing objectives and creative goals to align closely and so would prefer an in-house agency which allows the management to contribute to the creative development and marketing process.

Most brand owners want to control the creative and marketing process of their brands. Firms that come up with their own advertisements, maintain sole authority over the way their products or brand is presented to the public, and so they prefer in-house agencies.

Advertising experts see some flaws in such agencies. First, it is assumed that the creative sight of an in-house ad agency might be myopic because no external perspective is involved. This stems from brand familiarity or creative exhaustion.

Using a full-service advertising agency does three things primarily, first it saves time, second it saves labor and lastly it streamlines your product or brand to your actual target markets.

“The theory of division of labor and specialization comes into play here. An advertising agency has a team of professionals who would take up the job and execute it, using their wealth of experience to conceptualize, produce and eventually place them in the media.

“All these are not jobs for just anybody, because most times what happens is that a company would create an advertising department and then hire an expert to lead a team of non-experts. It doesn't work that way.

“Then there is the limitation of creativity, it most often lacks freshness because eventually the in-house team would begin to think like the company and might not see anything outside it, they would be constrained into a box and freshness is missing that way.

“Finally, you look at the angle of advert placements, there is a limit to the media contact of an in-house agency and they have little information to work with unlike the full-fledged agencies that have wider coverage of media houses and media tracking information.”

The effect of going In-House on the industry is that it reduces the professionals employed, and it also affects the standard practice of advertising, crippling the economic success of the industry. Imagine a time when all companies and manufacturers go in-house, what is going to happen to the advertising agencies? Wouldn't monopoly set in? What is the future of advertising agencies when all manufacturers go in-house?

It is expedient that before a company thinks of going in-house, it should think of the adverse effects, particularly the issue of brand staleness because of lack of fresh ideas.