Confessions of a marketer: Agency overbilling is spurring the move in-house
There are numerous factors behind clients’ desire to move marketing in-house. In the latest installment of our Confessions series, where we exchange anonymity for honesty, a senior executive at a global advertiser says the amount of extra work hours its agency always seems to tally up is one of the top reasons behind the company’s decision to move strategy and media in-house.
The conversation has been edited for clarity and length.
What is one of the main reasons why your company plans on leaving your agency and move marketing in-house?
There’s always overbilling when it comes to the hours our agency puts in and we’re not sure why. The agency says they’re going to spend 1,000 hours a month on our business, and after the month is over, I see where all of the hours are allocated and they’re actually spending 2,000 hours.
Does your agency tell you these hours are accruing?
No, there’s no check-in from the account leadership where they might say we’re mid-month and we’re already at our month’s cap. All of a sudden, I just get a report that shows they are double the hours over our spend.
Are they charging you right away for these extra hours?
No, they’re not charging me for those extra hours, but I guarantee you that next year they will come back to us and say, “You know what guys, we need more money because we are doing 2,000 hours a month,” or they will say they have to add more staff to complete all the hours they’re spending on our company.
Do you believe these extra hours are justified?
While I don’t nitpick, I’ve looked at some of the roles and I can’t point to any deliverables I’ve gotten that would’ve needed these extra hours. There’s all these internal status meetings people are being asked to be a part of. I’ve had some people on the agency side come to me confidentially and say, “We’re in too many meetings.”
Why does this lack of transparency lead to your company bringing marketing in-house?
It makes me feel powerless. I don’t have a high level of confidence that my agency is giving everything I need both strategically and tactically. As a client, you really have no way of auditing [agency hours] unless you hire a third party to audit your agency. If you tell me you spend 80 hours on my account, I can’t tell you that you didn’t; all I can say is that feels high.
Is the fear that the agency would drop you if you say no to more hours?
No, they would never drop us. The fear is that we would always be stuck working with them. They use a fear tactic. They’ll say, “You’re never going to be able to do this yourself. Look at how many hours we spend. We have 50 people working on your account; you’re not going to hire 50 people.”
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