Originally posted on Marketing Brew by Phoebe Bain, August 5, 2021.
When SmileDirectClub was founded in 2014, it—like most startups—was moving quickly to get the business off the ground.
SmileDirectClub CMO John Sheldon told Marketing Brew the teeth straightening brand’s creative agency struggled to keep up. “The business changed so often that it was frankly challenging to work with an external agency. They couldn’t follow all the twists and turns.”
After 15 months, Sheldon said SmileDirectClub decided to cut ties with the agency and take the majority of creative functions in-house.
The brand’s decision is indicative of a 21st century marketing trend that’s been picking up speed over the past couple of years. A survey of 400 marketers released by Gartner last month found that 29% of work previously handled by agencies has moved in-house in the past year. And a separate survey conducted by Gartner in 2020 revealed that marketers most commonly bring social marketing, creative production, and content marketing in-house.
Marketers say internal creative teams have the benefit of being closer to the brand itself, meaning they can turn work around at a faster clip and have a better understanding of what’s needed. But in-housing isn’t necessarily a cheaper or more efficient option for marketers, especially ones who rely on agencies for a broader range of skill sets and expertise.
Marketers cite the speed and flexibility that come with cutting out the middleman as reasons for bringing creative capabilities in-house.
Greg Wright, VP of content marketing at the Association of National Advertisers, told us that while in-house creative agencies used to be more the norm in sectors with lots of regulations and red tape—like financial services or pharmaceuticals—they’re now becoming increasingly common across the board.
“With digital marketing coming to the forefront, having somebody in-house who can quickly crop an image or do more advanced creative treatment to various assets has become very beneficial from a speed standpoint and a cost efficiency standpoint,” he explained.
Marie Lamonica is a client partner at We Are Rosie, a company that connects freelance marketing and advertising professionals with brands and agencies. She said the ad world’s increased need for agility is directly tied to the growth of digital marketing. “The pace at which you have to constantly update those digital assets—it’s another reason to have your team in-house,” she told us. “You’re constantly posting on social, you’re constantly updating your website, so it makes more sense to have that person or that team sitting in the room. With the speed it takes to constantly update those assets, you need that person there.”
Sheldon said SmileDirectClub recently researched different messaging strategies and found that one message in particular “popped to the top” with a specific audience segment. Because of its in-house agency, the brand was able to turn those insights into a campaign within a week.
“That research came in on Monday, was shared on Tuesday, we had our first test of creative with the message on Friday, and we knew by Monday it was working. With an agency, you wouldn’t have that brief in a week, let alone live work,” he shared. Sheldon, who worked at both Ogilvy and BBH earlier in his career, said limited staffing and resources make it difficult for external agencies to move that quickly.
Sweetgreen Chief Brand Officer Nathaniel Ru told Marketing Brew that its in-house agency understands the brand better than an agency could, and can move faster because of it. “Having a team that has this level of familiarity with the brand means they can make decisions almost as if they were owners themselves. They can really act like an owner to make decisions about the brand fast and confidently,” he told us.
Of course, there are downsides to in-housing. Sheldon pointed out that, while there are cost benefits to in-housing, expenses “find their way in, creeping up in other places.”
Lamonica explained that in-house agencies come with their own set of costs, like salaries, bonuses, raises, tool subscriptions, and benefits. But some of the costs they used to come with—think office space and parking—aren’t as much of an issue in pandemic-era work.
“Insourcing does not necessarily mean cost savings,” Gartner VP of research Jay Wilson told us, explaining that savings “depend on what a client is currently paying an agency, the cost of recruiting and retaining comparable talent, the efficiencies gained, if any, and ultimately the impact on marketing effectiveness and business results.”
Recruiting the right people can be a challenge, too. Ken Robinson, partner at and cofounder of agency search firm Ark Advisors, has advised clients on creative in-housing many times over. With in-house agencies, he said brands are “buying” talent as opposed to renting, which can be risky—especially if a company’s needs start to change.
“There’s an opportunity when you have an [external] agency to kind of refresh your team, to add in new players, to have access to capabilities and talent you may not have in-house,” he told us. For example, he said a brand might not have an SEO or SEM specialist at the ready; if it were to suddenly need one, an outside agency could probably help.
Wilson agreed. “Marketers tell us the breadth and depth of skills and experience at agencies exceed what is available in-house, especially when it comes to expertise in emerging content formats and technologies.”
Plus, Wilson said companies wanting to hire creatives might find that these employees “yearn for a diversity of experience that may be limited on the client side, making retention challenging. If retention challenges result in erratic support of critical and ongoing creative needs, the business continuity risk is significant.”
To combat these issues, several marketers are opting for a mix of in-house and external teams in hopes of gaining the best of both worlds. AB InBev, for instance, formed its internal shop DraftLine in 2018, but continues to work with the likes of Wieden+Kennedy and FCB.
Prudential recently selected StrawberryFrog as its creative agency despite having an in-house team. Yue Parsons, Prudential’s manager of media relations and marketing, said the company regularly partners with agencies, giving it “the opportunity to benefit from the fresh ideas an agency brings to the table” while leveraging “strong execution and brand consistency” from its internal team.