Moving Forward

The Association of National Advertisers (ANA) reported late last year 42% of advertisers nation-wide have set up in-house ad agencies to realize cost-efficiencies. According to this survey, in-house agencies are handling a variety of tasks, with 97% producing collateral materials, 66% working on brand identity and 62% designing online banner ads.

The ANA also found that fewer in-house agencies were charged with the media planning or media buying duties. 35% of in-house agencies planned the media schedule, but only 25% actually placed the media buys. Given the number of media choices and the technology needed to gauge effectiveness of media spending, even marketers with in-house agencies felt that outside agencies offered more knowledge and resources to reach target consumers more effectively.

Interestingly, this survey also found that not all marketers were satisfied with the in-house arrangement. 61% reported that their in-house teams lacked strategic thinking and depth of experience and 50% said that getting fresh ideas and new thinking was becoming a challenge.

There is also new research that indicates while marketers are cutting budgets, very little effort seems to be spent on efficiently managing their agency partners as a resource. A 2009 Jones & Bonevac study on the quality of client input to agencies found 30% of agency service hours for Fortune 500 brands are wasted due to poor briefing and input from clients. Multiple rounds of revisions and approvals by committee also added unnecessary billable hours.

In this new era of growing consumer engagement through multiple channels and influences on brand identity changing almost daily, is it really a cost-savings to bring ad agency functions in-house? Agency personnel offer combined years of experience and can provide clear thinking and new ideas, which minimizes false starts and wasted money. A well-directed, open agency relationship can be a marketers’ best weapon to thrive in challenging economic times.