Will brands reduce in-housing because of the virus crisis?

Advertisers taking marketing services away from agencies and bringing them in-house was a hot topic before the coronavirus crisis, but some analysts are asking if some brands will ease back on in-housing because of Covid-19.

Goldman Sachs said in a recent note that it has seen some evidence that advertisers are looking more favourably on external agencies to keep a lid on costs and permanent headcount.

Christian Polman, Group Chief Strategy Officer said:

While we’ve seen a steady march towards in-housing, Covid-19 is causing a rethink. Brands are having more open discussions with agency partners and looking for more flexible options. We’ve always sounded a word of caution to brands looking to fully move to in-housing and this is a good opportunity to rethink and consider all options. In-housing is not a black or white decision – there are different pros and cons for marketers depending on their strategy, focus, scale and complexity.  

Coronavirus has amplified the need for a robust business case for in-housing, as well as an environment ripe for fresh thinking. While the motivation for some brands is to take control, there are simpler ways of achieving this outcome without additional risk.

As flexibility and agility accelerates, brands are revisiting alternatives to in-housing. Agencies have retooled their approach in light of leaner marketing budgets and faster planning and production cycles. The end result may be a healthier agency ecosystem that delivers the flexibility, and results, brands require.

 

To read the article in full in Campaign, click here.

First featured: 30/06/2020