In-Housing and Trust
10 June 2022
A few weeks ago an old colleague (and loyal Cog Blog reader) Florence Waterman posed an interesting question. Paraphrasing, she wondered why so many advertisers use influencers, without it seems much evidence, or data to justify their decision? After all, most spending is subject to a certain rigour.
Surely there are agencies with access to evidence and data? How come their expertise is not being accessed as frequently as it could be?
Maybe the influencer market is too small for anyone to bother much about?
The issue of influencers and their pay (and thus the size of the market) is in the news here as the whole matter is the subject of a recommendation from MPs to the UK Government that an investigation is held into what are referred to by ‘The Guardian’ as ‘inconsistent pay rates and evidence of a racial pay gap’.
The influencer market is estimated (in ‘The Guardian’ piece) to be worth $6bn in 2020, rising to $24.1bn by 2025. So, not small potatoes and well worth the bother.
It seems though that when it comes to direct relationship between brand and influencer the choice of individual and the details of any deal are frequently handled in-house as opposed to by the client’s media or creative agency.
Despite what you may read, in-housing is nothing new. Many advertisers (P&G, Unilever, Mars, Diageo to name but a few) have been handling certain media functions for decades.
But there is no question the in-housing trend has accelerated, both in terms of number of advertisers investing in specialists, and the functions their teams deliver.
Some of this makes a lot of sense. In the case of performance marketing of a typical fast-moving consumer goods brand, linking the advertiser’s proprietary first-party data with social media outputs, and adjusting as you go along is, at least in theory made smoother if the whole exercise is done within the advertiser.
Setting corporate policy on such sensitive issues as diversity, inclusiveness and social responsibility and linking such policies to media activities is hard for any third party to do.
None of this is to suggest the agency can’t contribute – it can and it should by using its collective experience supported by research and insights to offer informed impartial advice.
However, ‘impartial advice’ is something agencies put at risk when they chose to make money doing agency deals with media vendors. After all, if you’re risking impartiality in your media selection by acting in a non-transparent manner why should anything you advise be trusted?
To add to the perfect storm of declining agency influence, the giant social media platforms have built impressive direct-to-client sales operations. They’ve in effect disintermediated the agencies – although they make all the right noises to convince the agencies to think otherwise.
The extent of the work done in-house by the advertiser is correlated with trust. It’s not black and white – having a team responsible for how the money is spent and ensuring the company’s corporate reputation is at the very least protected makes perfect sense and should happen anyway.
But there are borderline tasks when the thought must occur – I’d be better off doing this myself rather than risk getting into a fight over trust and transparency.
The best in-housing teams work with their agency partners. They recognise that the agency has experience outside of their own narrow sector, and the resources that can be brought to bear where necessary to enhance client performance through partnership
The trust and transparency debate was downplayed by the largest agencies when it first appeared. ‘Nothing to see here’ was a recurring theme.
Some of us though recognised that you reap what you sow; and that trust once lost is mighty hard to regain.