'In-housing' deemed biggest threat to media agencies

18 Sep 2018  |  David Pidgeon 
'In-housing' deemed biggest threat to media agencies

A crisis of trust and the availability of new tech is compelling more advertisers to take work away from media agencies and do it themselves, industry bosses have warned.

“From an agency point of view, the biggest issue with digital marketing at the moment is that more and more clients are taking things in-house,” said Laricea Roman-Halliday, head of digital media, The Specialist Works. “It's quite hard for us to justify our existence.”

Roman-Halliday, who was speaking at a Mediatel debate during Dmexco 2018, says more clients are hiring specialists, making it harder for agencies to find the best people – all the while asking: why would we do this with you, when we can do it ourselves?

“It’s a huge problem and that comes on the back of the latest issues around transparency and how we spend the money. It's been an absolute, major challenge for us. Especially in digital.”

Industry experts said the rise of so-called 'in-housing' has also come about because of an industry-wide breakdown in trust.

Nick Manning, senior vice president, MediaLink UK, said advertisers want more control, in part because the value of their own data - as well as the risk of it being misused by third parties - has grown.

“There's the chance of a loss of consumer trust too, there is ePrivacy, GDPR, and also the hacking problem, which is bigger than anybody realised,” he said. "So in-house control of data is becoming almost mandatory now.”

Manning, the co-founder of media agency Manning Gottlieb OMD, added that in-housing is also about advertisers getting "closer to the customer" and understanding the analytics and tech better so they can make "better marketing decisions based on that control.

“Advertiser confidence needs to be restored because of all of the issues around transparency and trust. It isn't just about money, although that's a big part of it. It has been about the access and portability of their data as well."

Manning said he believed the launch of GDPR in May, which represented the biggest disruption to privacy law in two decades, will help achieve that.

Meanwhile, Simon Halstead, head of open demand EMEA, Oath Ad Platforms, said there are categories of clients where in-housing is "entirely the right thing". However, in the main, a hybrid model looks like a "reasonable solution" where clients can handle some aspects, while the execution is handled by the media agency.

“I think those shifts are interesting, but in-housing creates a talent drain. One of the familiar and big benefits of agencies is shared knowledge.”

The future agency is likely, therefore, to move more into consultancy, said Roman-Halliday, rather than purely planning and buying media for clients.

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CraigMills, Sales Manager, World`s Fair on 19 Sep 2018
“The problem with agencies is,they seem to think that every piece of promotional bumf and product launch material they put out is justifiable editorial and as such publications should run it. They don`t seem to realise that promotional stuff is called advertising! If they charge their clients for the work they do and their clients charge their clients for the work they do, why should publications work for free? Pay up!”