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In-House Advertising Software Vs. Advertising Agencies: Which Is Best For You?

Featured Image - in-house advertising vs agency
More than half of marketers have already moved their advertising from an external agency to an in-house team (even Facebook has revealed that it’s moving more of its advertising work in-house.) So how do you know if your company should follow the in-house herd?
Ask yourself the following questions to determine if an in-house advertising team is right for you:

Cost - - in-house advertising vs agency Would you like to cut out unnecessary advertising costs?

When you hire an outside agency to manage your ads, you’re also shelling out a portion of your budget to middlemen who provide ad management service. In fact, the media markup from ad networks and intermediaries ranges from 30-40%. The chart below lays out how this markup can impact your ad budget:

3rd party vs in-house cost chart - in-house advertising vs agency

In the example above, a company has unlocked $500,000 in additional marketing budget by pivoting away from 3rd party managed services. That money can be channeled to actual ad buys instead of intermediaries; it can also be used to bid higher to win auctions and place your message in front of high-value audiences who typically cost more to reach. The take-home message? In-house advertising can actually improve the effectiveness of your ads.

Speed - in-house advertising vs agency Do you want a fast turnaround time?

The programmatic marketplace is fast-paced, and being able to adapt quickly to changes is vital. For example, let’s say you’re an ecommerce company running ads for a product during the busy holiday shopping season. If inventory for that product runs out, you’ll need to make sure that your campaign stops or is rerouted to another product. If working with an agency, you’ll need to notify them to make the necessary adjustments. However, since agencies are also busy managing accounts for many other clients, it’s not guaranteed that they’ll swiftly react to your request. If you’re running an ad over the weekend (when online holiday shopping activity spikes), your agency may not even get your message or take action until they’re back in the office on Monday.

That’s probably why 71% of marketers cite faster turnaround time as an advantage of the in-house approach. When your industry requires you to be flexible and agile at a moment’s notice, you need to have the ability to be proactive.

Expertise- in-house advertising vs agency Do you need the person managing your ads to be well-versed in your company and industry?

No one understands your company’s customers, products and industry better than your marketing team. So why not leverage the expertise that already exists within your business? After all, your marketing team lives and breathes your company every day, so they’ll also be able to use their product and customer knowledge in order to maximize the relevancy and effectiveness of advertising campaigns. No third-party solution can achieve that level of internal intelligence or match the insights that arise from internal cross-team collaboration.

Data Transparency - in-house advertising vs agency Do you value transparency?

You have the right to your first-party data, yet working with third-party agencies doesn’t always mean that you can get insight into performance data — or how much of your ad spend is landing in someone else’s pocket. Pairing in-house advertising software with direct-to-publisher media buying means you have full transparency into media cost. It’s much easier to quantify the value of your ad spend when details are a click away — and much easier to boost future campaign performance with applied learnings. In a 2015 Econsultancy survey, 64% of senior-level marketers reported that-first party data drives the highest increase in customer lifetime value.

If you answered yes to more than one of the questions above, in-house advertising may be the right move for your business.

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2 Responses

  1. Well, the media markup for Facebook marketing will not be as big as stated above, however, as Facebook brings together marketing and data, many companies are beginning to see the worth of the insights generated back from that. And due to the increasing complexity of Facebook and programmatic, media agencies find it very hard to read, interpret and foremost share the insights generated. And it doesn’t stop with media agencies, but creative too.

    It’s not all roses though. Running the media/creative yourself requires a different company culture or even personnel and is a long learning curve, but as Carolyn outlines, I can only encourage every company to review.

    • Thank you for your input, Johannes! We agree that in-house advertising doesn’t happen overnight, and it definitely requires a data-driven way of thinking. We will continue to create resources like our latest talent recruitment eBook (http://nani.gs/1l69Gb7) to help companies make the transition.