Media in-housing: the future is now clear
Remember when the hot topic was media in-housing? Nick Manning revisits the issue to reveal what happened
Cast your minds back to calmer times two years ago, before the metaphorical comet hit us.
The talk then was about how advertisers were flocking to ‘take media in-house’, fuelled by surveys purporting to show that it was an unstoppable wave.
Well, like most high-profile trends in our industry, the subject of in-housing turned out to be a grey area and not the kind of black and white matter people love to talk about (and which fills pages and conference venues, virtual or otherwise).
The reality is that very few advertisers have ‘taken media in-house’ and recreated an internal media agency.
The vast majority were never going to and they didn’t; the truth is much more nuanced and the picture is now clear, even if less sensational.
Advertisers have instead done something far more interesting. The most enlightened have invested in highly qualified and experienced internal teams to manage the multiple channels that companies now routinely use, often employing agency people into the new roles.
To quote the Brexit argument, they have taken back control.
They have effectively re-defined ‘media’ as any channel that contributes to the customer journey and experience. This can be physical as well as virtual, but the strongest trend is in the management of their consumer communication channels.
- Taken control of the data analytics function and use tools that draw from their own customer databases as well as external systems such as Google Analytics and often outside marketing mix modelling systems that integrate with their own.
- Created processes to orchestrate an array of content and channel partners, including their various agencies, ad tech partners, platforms, measurement, research and data providers and external advisors.
- Taken control of their ad tech interests, with their own DSP seats, contracts with content verification providers and with full access to the necessary user interfaces to track and monitor trends
- Sometimes taken ‘hands on keyboards’ control of a small set of channels, especially paid search and social, where the choices are limited and the systems highly automated, including programmatic in businesses that use it day-in, day-out as a mainstream channel
- Removed the risk of data infringement via GDPR by owning and controlling customer data and privacy protocols and systems
- Redefined their media agency relationships, with media strategy increasingly a joint exercise
- Created partnerships with key business partners such as the large platforms and independent specialists, much as they did with poster specialists many years ago
- Contracted systems providers such as Elsy and Bionic to provide multi-channel measurement and workflow platforms to co-ordinate the web of activities
What they haven’t done is also interesting.
They have generally not taken control of media execution and will not (with some exceptions). There is no need to assume the effort and cost of replicating disciplines that media agencies are far better qualified to perform, including managing the people and the money.
In many instances, the relationship between advertisers and their media agencies has been strengthened by this trend. There is a more even distribution of responsibilities and a far higher level of trust. Media Agencies recognise where their strengths lay and focus on them, performing better with the resources of the client combining with their own.
The enlightened clients appreciate the contribution of their media agencies more as they familiarise themselves with the complexities of the media market. They appreciate the judgement the media agencies bring, rather than being slaves to the algorithm (as Grace Jones nearly said).
They appreciate the market exposure of the agencies and their wider media owner relationships, which is where many of the best ideas come from.
Media transparency has often improved as client awareness grows and ownership of contracts replaces agency-led arrangements, although advertisers still will not have transparency beyond the reach of their media agency or DSP partners.
These trends have come about through the complexity of modern-day brand strategy but also because no one agency can do it all. Media agencies have generally stayed in their lane and have not invested in new lines of business, leaving clients to pick up some of the slack.
Advertisers’ requirements of independent advisors have also changed, with the need to have impartial measurement and organisational guidance. They are moving beyond the traditional audit towards independent tracking solutions that aggregate vast quantities of data to inform fast decision-making; while the twice-yearly benchmark may well persist for procurement reasons, the real action is in platforms that analyse digital data accurately and rapidly.
And with so much to manage they are also employing independent advisors to help them organisationally and operationally. There has been a flurry of activity in the independent advisory sector, including the announcement last week of The Aperto Partnership, as the independent market moves from ‘audit plus pitch management’ to a much wider range of services-and not before time.
Advertisers will employ the new generation of advisors to provide the kind of orchestration they need as an alternative to recruiting their own teams. They will get access to top talent without the need to pay for them full-time.
Pitch management itself will decline over time as advertisers become more operationally self-reliant and with the eventual demise of the three-yearly beauty parade to see which media agency networks can artificially undercut the incumbents.
These are interesting times. What is clear is that the much-trumpeted media in-housing trend is not leading to a wholesale internal recreation of media agency services. Advertisers will still require their media agencies to provide the vital spark that only comes from their market-wide experience and expertise but they will continue to internalise the mission-critical functions of multi-channel marketing.
There is a reason why the industry is no longer talking about media in-housing. It’s because it isn’t what we thought it was going to be. It may be less sexy but it’s more logical.