This essay is Part 2 of our “What even IS an agency?” series. You’ll find Part 1 here.
I’ve been talking to a lot of friends in tech and marketing the last few months, and there’s been a common thread stitched through a lot of those conversations. Belts are tightening, headcounts are shrinking, and there’s massive pressure to do more with less. “Maybe it’s time to bring the marketing work in-house.”
I’ve spent my career on both sides of the marketing market: working in-house for places like Figma and Wix, as well as for agencies like VSA, YML, AKQA, and other, non-acronym shops. My current role as VP of creative at Codeword puts me in a position of both running a dedicated client team and being able to see which way the market winds are blowing generally. Right now, there’s a gale of in-housing happening, and I want to do my best to explain why.
The agency-to-in-house oscillation is as predictable as the tides— and it can be unnerving for agencies of all sizes. Big shops scale up even more to handle an influx of new work, and then are expected to contract when the winds of change blow through. Smaller ones that live and die on retainer contracts are forced to start thinking about where the next safe port is. Combine that with an atmosphere of cost cutting, and you get some rocky waters for the entire industry like we’re seeing now.
It’s a challenge for agencies, as there’s precious little space left for them in which to operate. According to a study from the Association of National Advertisers, fewer than half of companies ran their own in-house shops a decade ago; now nearly all of them do. Now, it’s not like the ad industry is facing an existential threat—basically every firm cited in the ANA study uses external agencies too—but it does mean that understanding how to fit into the spaces internal teams leave vacant is increasingly vital for agencies of all shapes.
And knowing where those high-value knowledge and experience gaps are can make agencies great partners for companies that know they can’t do everything themselves.
There are times when a campaign pitched and developed in-house needs another team to bring it to life, and it’s a lot cheaper and faster to bring in a crew that already knows exactly what they’re doing. Have you ever seen a company without a production unit try to do an activation themselves? Run an editorial platform? Or make a podcast? It’s a nightmare.
Take speechwriting, for example. For a lot of firms, speeches are handled by communications teams who are both stretched thin and not necessarily staffed by Jon Favreau clones. Competing internal priorities and big executive personalities add to an already tense, high-visibility project. An experienced outsider can be a breath of fresh air, sharing the tough POVs and pushing the work forward in a way that is hard for internal resources.
Agencies can provide that sort of expertise on command, and on a fractional basis. Which can be a huge boost to the marketing expertise of a brand, a release valve when the pressure is on, and a fresh perspective. For most brands, it doesn’t make sense to hire a full-time speechwriter, or a brand designer, or a social media analyst. There isn’t 40 hours of relevant work to do each week, nor the resources to manage and mentor specialists.
We also know that some roles just make more sense as in-house jobs, and we always advise our clients when we think something can be handled more efficiently by an employee on their end. We know when it’s cheaper to bring on full-time talent based on the level of experience and expertise a company really needs in a given position. But speciality roles, ad-hoc help, the ability to scale up and down quickly based on need, broad industry experience across lots of companies, audiences, and channels—those are all areas where agencies like Codeword will deliver more value more efficiently than trying to build an in-house agency.
The debate between in-house and agency doesn’t need to be a zero-sum game. The best agencies know that they can’t do everything for every company, just like the best companies know it’s a mistake to try to do everything themselves. Finding a balance that gets the best out of both sides is how this industry moves forward, one project at a time.
This essay is Part 2 of our “What even IS an agency?” series. You’ll find Part 1 here.
