Mobile’s growth coincides with shift to in-house agencies
By Chantal Tode
September 9, 2013
Marketers are assigning mobile to in-house agencies
Marketers are increasingly bringing work in-house that was traditionally farmed out to external agencies in part because those agencies are not moving quickly enough to embrace mobile.
A new report from the Association of National Advertisers found that 58 percent of marketers are currently using in-house agencies, a 16 percentage point increase from 2008. Much of the shift is being driven by growing internal expertise in areas such as mobile and social as well as the need for greater cost efficiencies and quicker turnaround times.
“We all know that mobile is the medium of the future and the present,” said Bob Liodice, president and CEO of the ANA, New York. “ It isn’t about television sets in your living room, it is about a device that is going to be planted to your being.
“Are the agencies ready for that?,” he said. “Do they understand how to work through a screen strategy that includes mobile, television and maybe the Internet. Well, maybe not.
“And that is where the questioning is taking place and that is why there is this substantial shift in the amount of in-house agencies that the marketers are having.”
Traditional roles shrink
The ANA also recently completed a compensation survey that found that more and more agencies are being moved to performance based compensation plans. This finding coupled with the growth in in-house agencies suggests that marketers are looking to agencies to perform at higher levels than what they are perceived to be doing right now.
Other key findings from the report about in-house agencies include that 52 percent of marketers are assigning digital, social and mobile to their in-house agency and that 56 percent of marketers have already moved established business from an external agency to an in-house one.
The marketing landscape is changing as mobile, social and digital platforms such as Google and Facebook quickly grow at the same time that the role of print, television and radio media, which is where traditional agencies strengths lie, is shrinking.
The newer, more technology-oriented mediums require a different set of skills in order for marketing strategies to be successful, skills that some marketers are doing a good job of gaining expertise in.
Increasingly, marketers recognize that they need to be more focused on having a two-way dialog with customers as opposed to the old model that was essentially a one-way conversation.
While agencies such as MediaVest, Vivaki and R/GA are doing a good job of figuring out how to have a relationship with someone on Facebook, create social communities and encourage people to be brand ambassadors many others have not, per Mr. Lodice.
As a result, marketers are finding it may make more sense for them to bring certain functions in-house.
“We’ve been dealing in a world of traditional television, print, radio for eons and the rules of that game have been well understood for years,” Mr. Liodice said. “But the rules of the mobile, social, digital platforms are relatively recent.
“Marketers have traditionally looked to the agencies for guidance in how best to navigate that and if the external agencies themselves aren’t as well prepared to be able to provide that leadership, then the marketers are essentially saying I can peel of some of these responsibilities and bring them in house, where we are increasing the level of functionality towards understanding how to success sin digital, mobile or social,” he said.
For agencies, the news should be a wake-up call that they need to do a better job of staying on top of the shifting marketing landscape.
Those agencies that do not react to the changing dynamics could see a negative impact on their business.
For agencies to succeed in the changing landscape, they need to understand that the silos have dropped and that the customer journey exists within an omni-channel where there is no linear path. To get there, agencies must have a better understanding of how to leverage mobile.
“Agencies must help brands embrace the consumer in real-time and fulfill their needs in real-time,” said Michael Becker, market development North America and strategic advisor at Somo, London.
“Mobile gets you closer to the consumer than any other media or medium,” he said. “Brands need to bring in-house expertise to manage the new customer relationship dynamic that mobile has created, but this certainly does not negate the value that a leading agency can bring to the table.
“There is no way for anyone to know everything at all times. Brands and agencies will work together to fill their respective knowledge and skill gaps.”
Chantal Tode is associate editor on Mobile Marketer, New York
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Comments on "Mobile’s growth coincides with shift to in-house agencies"
Nikolai Onken says:
September 11, 2013 at 12:38pm