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The myths of in-housing media buying: ‘People think it’s going to be easier’

One of the biggest trends to hit the agency business is clients taking more marketing control. Marketers at the Digiday Brand Summit Europe this week in Monaco who have adopted in-house strategies discussed misconceptions about the realities of taking media buying and other marketing in-house.

Here is a myth buster:

Myth 1: Agencies are adverse to brands picking their own tech vendors
The rise of in-housing media buying operations, spurred by the increasing demand from brand marketers to take control of what’s happening in their digital ad supply chains and reduce budget wastage, hasn’t been the threat to agencies that the market once anticipated. A key message from brand marketers, including Deutsche Telekom, HSBC, BT and more, spoke of how they regard their in-housing strategies as one which their agency partners can supplement. BT has spent the last year taking full ownership of contracts with its ad tech vendors, specifically with demand-side platforms.

“It’s a myth that agencies are adverse to this,” said Graeme Adams, gm of media for BT. “We now own our own tech contracts, and our agency partners operate the contracts for us. They have been an invaluable source of consultation, advice and technical expertise.”

Myth 2: Advertisers are close to achieving a true in-house model
For all the hype around advertisers taking all their media buying and advertising in-house, there are few examples of it done properly. In fact, Deutsche Telekom’s head of international media management Gerhard Louw believes the industry is still “very far away” from “marketers putting hands on keyboards” to buy all their biddable media.

Advertisers including Vodafone, Phillips and GlaxoSmithKline have touted their own in-house models over the last year, but the reality is they’re closer to a hybrid approach; the advertiser effectively has more control over what their agencies and ad tech vendors do with their money. Pushing beyond that dynamic seems a step too far for many advertisers. There are internal political issues to manage, recruitment hurdles to overcome and business models to develop before an advertiser can no longer be reliant on agencies or ad tech vendors to buy their ads.

“People think it’s going to be easier to in-house that work with an agency, and when you combine that with all the talk around taking control at the moment, then it seems like the perfect time to do it, but what they underestimate is how difficult it is to recruit the right people, develop them and retain them, for example,” said Louw. “I personally think that in-sourcing is really only suited for brands and companies where media and marketing are at the core of the business.”

Myth 3: In-housing is quick and simple
It turns out it’s rare for a brand marketer to successfully bring aspects like media buying or data management in-house in less than at least eight months. Uber was the sole exception to this among the advertisers at the summit. The advertiser decided it would buy its own biddable media in October 2016, and then four months later in January, it had nearly completed the move, said Mattia Santin, head of media marketing at Uber. But the advertiser was only able to go from buying performance ads through an agency to doing so through its own team because of how much expertise it already had internally.

“There’s a perception that it’s a plug and play situation,” said Adams. “That it’s just a matter of signing a few new contracts and off you go. But in reality, it takes a long time. It has taken us about eight months to get to where we are now.”

Myth 4: Recruitment is a stumbling block to taking more marketing in-house
Senior marketers from Deutsche Telekom, HSBC and BT refer to the trials and tribulations of convincing talented traders, strategists and creatives to come to the brand side.

And yet the agency model is going through such change those businesses might not be able to offer the variety and perks their talent has become accustomed to. There is nothing easier to transfer than staff, as Uber can attest. A total of 300 people have applied for one job at the advertiser’s in-house media team for Europe, the Middle East and Africa, said the region’s head of media marketing, Mattia Santin.

Myth 5: In-housing media and advertising is expensive
The cost of hiring staff, overhauling agency relationship and sourcing ad tech can balloon quickly for advertisers with limited funds. One senior marketer at the event said they thought it would be more expensive to own the DSP ad tech making its programmatic budgets than using the one licensed by the advertiser’s agency.

“Even with a margin, I thought the agency would be able to source the DSP cheaper than us, but they weren’t or they weren’t giving us that price,” said the executive. “That confirmed to me that we were on the right track and that by taking the DSP in-house we could pay less. Even if it would have been more expensive to source the tech ourselves, there are so many advantages from getting transparency on bids and the learnings we get from the data we own that it outweighs the commercial element.”

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