A Playbook for the Transition to In-House Advertising

Digital Full Service
Performance Marketing

Advertisers are known for chasing unconventional ideas – often at warp speed- to connect brands with consumers; for decades, the symbiotic relationship between brands and agencies have created value for both parties. The thought was: if there is a sliver of advertising terrain anywhere on the planet, an agency would find it, fire the message and hit the target every time. With such synchronization, why switch the music in the middle of the dance?

Are you trending with the trend?

Somewhere along the way, brands heard a different chorus and began to rethink their strategies. So what is the trend? How many power hitters have made the transition? Determined to answer these types of questions, the In-House Agency Forum (IHAH) and Forrester Research conducted a joint study. They confirmed that the trajectory of businesses moving advertising in-house is headed north; in the U.S., there are 64% of in-house agencies, up from 42% one decade ago. Their survey reports that even globe-straddling brands are weaning themselves off their reliance on agencies and are moving operations in-house.  

Four reasons why companies are more internally focused

If we dissect the reasons why in-house agencies are on the rise, we will find one that soars to the top of the list: cost-efficiency. The two vying for second place are data and institutional knowledge. A brand that doesn’t keep data under lock and key will soon learn it can be their kryptonite; losing or abusing it can have a detrimental effect on the brand’s reputation. Regarding knowledge, internal resources are familiar with various levels of the companies’ infrastructure. Thus, knowledge and data are basically intertwined. Internal teams have the home court advantage; they control the data, can access it quickly and with agility. Another factor that demands attention is business acumen. Advertising is a high-stakes, multimillion-dollar game. With the work being handled in-house, it can greatly reduce the element of surprise, as the entire team can easily track spending, media, data and analytics.

Create a playbook to get you from Point A to Point B

Each year in May, about 800 daring mountaineers converge in Kathmandu, Nepal, under the shadow of the world’s tallest mountain: Everest. They have a single goal: to stand on top of the world. Summiting is a feat that is accomplished only by breaking down this monumental objective into manageable pieces. Even before arriving at base camp in March – lungs require two months of acclimating to the altitude – they have intently studied Everest. While they hail from every point on the compass, no climber intends to ascend 29,030 feet solo; most use a hybrid approach consisting of a guide and a Sherpa or two. Or three.

Businesses that are considering whether or not to embark upon a massive undertaking may think it eclipses even Mt. Everest. It may sound daunting to sever ties with an agency that has been their safety net but it can be accomplished, one step at a time.

The power of team effort

Prior to making any in-house transition, brands should have a solid tech team in place. Before moving operations in-house, they should acquire the right tech and the right people to implement the technology and harness their data.

An excellent example is how Calvin Klein navigated the behind-the-scenes transition; they brought Jellyfish Dynamix in early to discover, design and build their technology infrastructure. Calvin Klein invested an enormous amount of time vetting the right team, seeking the advice of Jellyfish Dynamix and Google along the way.

  • Laying the foundation - CK started from the ground up with a brand new team
  • Adding resources - The three-person team expanded when they recruited another tier of new hires months later
  • Assistance on standby - Calvin Klein wanted a partner with the expertise and capacity to assist in vetting the right team, even if their assistance was not requested.

In-Housing is not one-size-fits-all

All ties do not need to be severed; there’s no universal law that requires you to transfer everything in-house. Brands decide what aspects of advertising are most important for them to in-house. Shifting to a digital, data-driven organization is a big change – one that requires a unified vision. To create a solid in-house relationship, trust and open communication are essential. The following captures the nuts and bolts of their transition.

  • Everything is customizable and scalable. The goal is to meet the client's needs but to also coax them to adapt to change. The selected partner must be the expert.
  • CMO of Calvin Klein Marie Gulin-Merle (now Chief Digital Officer of PFH Corp) had a clear perception of the challenge: Calvin Klein had a limited understanding of their consumer and ownability of their data. Driven to correct it, she led the charge towards a digital first, data-driven marketing approach; it was the key that would unlock a vault of valuable data, revealing many unknowns about their base.
  • The initial high-level awareness strategy started to shift toward a targeted approach, in which Jellyfish proposed a multi-pronged solution for a stronger ROAS with Open Exchange tactics.
  • CK listened with an open mind to their trusted partner’s recommendations and agreed to incorporate their proposed changes

Is leadership onboard?

To facilitate effective change, leadership must be fully invested in supporting in-house efforts. Then to sell the vision, leaders must cascade well-crafted messages from the top tier down to every level. 

  • As the executive change agent, the CMO began to build an executive team. To drive execution, it was essential that all verticals – finance, media, marketing, etc. - be on board. Unless everyone was singing from the same sheet of music, in-housing would not occur. Her battle cry was: an attitude shift is a critical priority.  
  • The CMO embraced the project; she owned and nourished it. She breathed life into it as if it were her own child.

It’s imperative that leaders not underestimate the impact of getting onboard with in-housing – quickly. As your team notices the stakeholders’ passion about executing clearly-defined strategies, they, too, will embrace it and help fuel the excitement. Those who engage while the iron is hot can reshape the future; those who wait on the sidelines will end up watching others create the future without them.    

Darwin left us with his thoughts about adaptability. To paraphrase him: the species that will survive will be the ones most responsive to change.

- Kiley Mellor, Account Director, Jellyfish Dynamix