Do Brands Need Agencies for Social?

There’s been a lot of back and forth over the last couple of weeks on whether or not there’s room for agencies in social media, as the channel evolves and brands start bringing people in-house. Already, companies like Nike, Ford and Campbell’s are relying on in-house personel to handle strategy, analytics and the day-to-day social media outreach.

In “Brands Go it Alone in Social,” executives said that bringing social in-house is part of the maturation cycle of social media as a marketing function. It’s comparable to online circa 1997-2000, when all the big brands outsourced that new “Web thing” and then companies began creating new positions like head of online or head of digital once they became more comfortable.

“Agencies will be relied on for creative executions and helping brands stay ahead in the space,” said a brand exec that asked to remain anonymous. “What I am hearing from our agencies is that they are thankful for our digital talent, because it becomes easier for them to sell their ideas to us. But I am not sure how long this happiness will last. There will eventually be a point where agencies see a revenue decline because so much is being taken in-house.”

Mike Mikho of Big Fuel offered the counterpoint, “Brands Still Need Agencies for Social,” arguing that agencies are still needed in social and aren’t necessarily cost prohibitive. In my article, brand execs talked about how expensive it is to use an agency for social media management. It comes to about (8 hours a day x $100 minimum fee x 5 days a week x 50 weeks per year) $200,000 per year, per Mikho, which is the equivalent of three in-house employees. In a comment to Mikho’s post, Adam Kmiec, social media chief at Campbell’s says, “But keep in mind, just like 24/7 call centers, there are agencies who are asked by clients for 24/7 coverage and as such offering a billable rate of 100 x 24, not 100 x 8. The sooner we get off of the billable rate model, the better it will be for agencies and clients.”