Navigating the Shift to In-House Advertising Resource Management
Procter & Gamble Brand Chief Officer Marc Pritchard recently announced that the company is saving 10% of the annual advertising budget thanks to in-house media management. A growing number of companies are considering shifting to in-house models for their end-to-end advertising operations.

In-House Advertising Resource Management (ARM) is a Trend

In recent years, the advertising landscape has undergone rapid transformation, driven by several key factors that have necessitated brands to rethink their advertising resource management strategies. The advent of digital acceleration due to the pandemic, an increase in consumer demand for personalized experiences, and the impending cookieless world have collectively ushered in a new era of media management challenges and opportunities. The traditional media agency model is facing scrutiny for brands planning to adopt in-house models.

A recent study by WFA and The Observatory International reveals that 66% of brands currently operate in-house agencies, with an additional 21% contemplating establishing one. The survey also indicates that 70% of these brands possess strategic capabilities internally, with numerous brands intending to transition new tasks away from external agencies within the next three years.

But what are the main benefits of embarking on such a complex journey as in-housing the entire advertising data equity of a global brand? According to the recent State of ‘in-housing’ report 2023 by ISBA, Alchemists and CvE, the main benefits that companies expect from in-housing can be grouped into fourteen main categories and ranked as follows, with cost-efficiency, speed and greater control as the first three preferred expected outcomes. 

In-housing, seen as the practice of bringing advertising resource management inside the organization, has emerged as a powerful strategy for brands seeking better control over their media operations and first-party data. According to the "Productivity and the Pandemic" report by the In-House Agency Forum (IHAF), there has been a significant uptick in companies operating at least partly in-house, with figures rising from 50% in 2019 to 77% in subsequent years. This shift is driven by the desire for improved control over advertising spending and a stronger company culture through new operating models. 

In recent years, brands have embraced in-housing to boost strategic leverage, financial savings and operational agility, and have already shared promising results with the market about their in-housing experiences. Examples from different verticals have reached international visibility in the news. As shared by AdAge, Procter & Gamble Chief Brand Officer Marc Pritchard has recently announced that the company has saved at least 10% in media costs since in-housing media buying in a live streamed keynote at the Association of National Advertisers (ANA) Media Conference; the P&G manager also added that there is still plenty of work to do to enhance these great results, especially in terms of data visibility and measurement.

By owning their media strategy and execution, companies have also pursued the goal to differentiate themselves in the competitive landscape. Bayer is a well known example of this differentiation strategy in the Healthcare sector since 2017, when they first started in-housing their programmatic media-buying; 7 years later their journey keeps evolving as one of the most complete in-housing experience, with the inclusion of new channels such as online video, connected TV and addressable TV.

Exploring the Spectrum of In-House Advertising Models: From Full Integration to Hybrid Approaches

While the benefits of in-housing are clear, the real transition comes with its challenges. 

Navigating the diverse range of models for in-house operations presents a complex challenge for organizations. Determining the optimal approach, identifying the capabilities to bring in-house, and comprehending the essentials for success can be intricate tasks. Staffing remains a significant hurdle, with a scarcity of expertise in specialized areas such as media buying strategies and vendor APIs. The initial phase of executing an in-house model can also pose risks, given the nuanced workflows and specialist-dependent processes traditionally managed by agencies. 

There are various models for in-house advertising, ranging from fully outsourced to fully in-house and brand-led, with different levels of control and FTE (full-time employee) requirements. The traditional advertising in-house spectrum consists of three main models:

  • Fully Outsourced Model: all the key functions are completely outsourced with full agency involvement from strategy and main KPIs definition to financial reconciliations;
  • In-House Agency Led Model: this group involves different types of hybrid configurations according to the main brand-agency relationship, where outsourced functions are usually audience planning, media planning and buying, campaign set-up and ad operations, campaign optimizations and reporting; 
  • Full In-House, Brand Led Model: all the key advertising functions are completely managed in-house, with an end-to-end approach.

In recent years, the market has also experienced the rise of new advertising in-house models where the transition to a new operational structure is finalized with full support of dedicated technologies such as Advertising Resource Management (ARM) softwares. MINT is one of the SaaS platforms on the market designed to accelerate advertising in-house models with a software driven approach

Software-driven partnership projects are useful to optimize the in-housing process in terms of time and costs, enabling savings and increased flexibility. These options enable companies to build a “brand asset” that remains owned by the company even with future evolutions of the in-house team or a change in the media agency (in case of hybrid set-ups). Therefore, the above list can be expanded by including software-driven models for in-house advertising:

  • Software Driven In-House, Agency Led Model: the designed software supports the brand-agency relationship putting all partners on the same page, allowing increased visibility on operational workflows;
  • Software Driven In-House, Brand Led Model: the designed software fully supports the brand in-housing set-up during all phases of the advertising operations.

How a Software Driven Approach mitigates Project Risk

The journey towards in-housing is a strategic move that can yield significant long-term benefits for brands willing to navigate its complexities. However, any long term project can encounter unforeseen roadblocks or delays. This is where the right software solutions can provide greater control and flexibility. Ensuring you have the right software means that you can mitigate less controllable aspects such as staffing, regulation, and macro economic factors by ensuring you have a consistent platform for data and workflow across the steps of your journey. 

As the marketing landscape continues to evolve, in-housing your advertising resource management represents not just a trend, but an evolution for brands aiming to stay competitive. A software-driven approach to in-housing is able to maximize end-to-end control over advertising operations while supporting hybrid models with agencies. 

Interested in knowing more on in-house strategy options? Get in touch with the MINT team.