Thinking of bringing your marketing and advertising efforts in house? While some may argue that cutting out the middle man saves money, it can also come at a significant cost. The fact remains that companies should not relinquish one for the other. Even companies with large in-house teams still rely on agencies to optimize their campaigns as agencies can offer more targeted data that many companies simply do not have access to. And today when data is more important than ever for maximizing return on ad spend, it’s in a company’s best interests to enjoy the best of both worlds.
Limitations of Going In-House
Choosing the Right Technology
To succeed, digital marketing companies must be extremely precise when calculating their expenses and ROI – and that requires specific technology for data, metrics, and optimization. An in-house marketer can choose one of the “off-the-shelf” programmatic solutions. The difficulty here is that there are actually hundreds of solutions to choose from, most of which are being continuously updated, re-designed, and not always user-friendly. And this makes it challenging to know which platform and features will best serve them.
Therefore, while programmatic technology automates marketing at scale, there is still a media buyer behind the curtain pulling the strings.
Limited Access to Data
Today’s successful media campaigns rely on the ability to optimize ad targeting with access to high-quality audience data. And there are many different types of data – demographics, consumer behavior, geo-location, etc. However, when choosing to go in-house, marketers are limiting their data pool to the specific media channels they work with and whatever data their company owns. Furthermore, not all media platforms make their data accessible to everyday marketers. Facebook, for example, does not share its user-level data with marketers – opting instead to keep that information to themselves.
Some marketers might think working directly through a Data Management Platform (DMP) will solve this problem, however, DMP services are very expensive and most still do not offer user-level data. Despite being able to see the device ID and tracking it, companies are unable to do much with that information because they do not have access to the user data behind the ID.
Unable to Scale a Multi-Channel Strategy
Both multi-channel and cross-channel approaches are growing in popularity as consumer attention is increasingly divided between devices and media channels like social networks, websites, gaming apps, and more. Ads, and the budget invested in them, are wasted if they’re not shown to the right user, on the right channel, at the right time.
To optimize media campaigns, advertisers should leverage user data – including demographics, unique characteristics, and behavioral patterns – with smart technology to determine where and when to target the best users with the most appropriate ads. While in-house teams can market across a handful of channels such as Facebook or Google, they are unable to execute a multi-channel strategy at scale. Besides with the lack of quality user data required for a penetrative campaign, they do not have the infrastructure in place to carry it out. To effectively target users across multiple channels in real time, a company would need to set up their own “in-house agency” with media buyers dedicated to understand different platforms, different media channels and different kinds of publishers.
The Talent Challenge
An often overlooked downside of going in-house is building and maintaining an experienced team of marketers and media buyers. Finding talent is a real challenge. An experienced media buyer can cost upwards of $100,000 a year—and if marketers want to scale their campaign across multiple channels, they will need to start multiplying that salary. Furthermore, for companies that don’t focus primarily on media, acquiring talent and minimizing turnover is difficult if there is little to no career trajectory for employees.
But cost isn’t the only drawback. Running an in-house marketing team also comes with operational risk. For instance, if the media buyer for Facebook is out of the office, those activities would need to be back-filled otherwise the campaigns will suffer.
Working with the Experts
The Benefits of an Agency
Agencies are multifunctional media machines dedicated to offering the best technology solutions, access to media platforms and user-level data, and industry expertise. They are able to leverage knowledge and data from one campaign to another and have dedicated media buying teams for each top-tier publisher, enabling them to take advantage of new features, formats, and ad trends as they happen. Agencies have the resources and talent required to scale any campaign and cross-channel strategy. Bottom line: agencies are there to provide support to your internal team and ensure you get the most ROI for your ad spend.
Always Keep a Balance
Going in-house makes sense once a company has achieved a certain scale and has the resources for a dedicated marketing team – but this doesn’t mean companies should forego the agency altogether. It’s always beneficial to save a portion of the budget for outsourced marketing. Take the gaming industry, for instance, which is leading the digital market. Marketing budgets for gaming are some of the highest, with available spend anywhere from $1-2 million a month. Gaming companies can afford a large in-house team. They are already tech savvy and have access to massive amounts of user-level data. But, even the biggest companies in this billion-dollar industry use agencies to complement their in-house marketing efforts, recognizing that having an in-house team to collaborate with and to leverage the agency’s access and expertise allows them to reap the most benefits.
Sagi Niri, COO & CFO, Matomy Media Group