Summary: More and more companies are starting to bring in-house work, that was previously the domain of agencies. It's a move that confirms marketing is shifting and the only way companies can adapt to this shift is internalising talent. And the benefits are numerous.
Before I go ahead into what are the benefits of internalising work that was previously outsourced, please note that I am not against advertising agencies. I'm not saying they are not up to par. I'm just saying that nowadays, having full control over marketing may prove more beneficial to companies. And I'm also saying that the role of agencies should change, but more on this on a future post.
Also, this is a sign that the environment is changing fast, too fast for the decentralised, outsourcing model of communication to work. It reminds me of the post-Communist era or even current-day China where all companies were/are holding companies: they have everything from childcare to financial services because the business environment was either so un-evolved or unable to offer the services companies needed.
Internal teams are better at making complicated things, simple
In tech industry especially, and now in nearly any field, things are getting more complicated in marketing with the advent of technology, social media, various marketing platforms, broken departmental silos etc. Often, agency people have too many accounts, are overworked and spread too thin to really have the time to think about your "complex and urgent" issue.
Internal teams have the time to get to the bottom of things. To pry everybody's mind from customer service, product management and finance. These departments are also more willing to talk to somebody from the inside. How many times did you organise meetings between your finance manager and your account manager from the agency?
Having better informed marketing team members - helps with simplifying the messages that customers get.
Internal teams are faster
Not much to explain here. In the light of the recent Volkswagen crisis and any other crisis, internal teams are obviously much faster. Even if you don't have a crisis, being able to create a funny campaign on the spot, is a great advantage.
Internal teams have more skin in the game
If something goes wrong or unexpectedly (which in marketing it surely will) in-house marketers bear more responsibility. Freelancers or contractors just face a termination of their contracts with no side effects. Yes, you can argue that contracts bear liabilities, but are you willing to put your legal team to fight this? I guess not. So for me, skin in the game is a good thing to look for (Not too rant too much: Nicholas N Taleb has a lovely point on this: our current political state is due to precisely the separation of benefits and risks. Those that rule and make decisions often face nothing more than a resignation if things go bad).
Internal teams receive better information
Sadly, businesses are not eager to share sales data and other relevant info with agencies for fear of unwanted disclosure (despite confidentiality contracts). Naturally, agencies resent this lack of trust. And they have less good info to work with. So their results are less than what they could perform if they had the same level of information.
Internal teams know more about the business. It's almost like insider information if you will. And the ugly, ironical side of this is that internal teams have the sick pleasure of pointing out the fact that they know more :) and rub agencies' noses in the dirt.
Internal teams have longer tenures which translate to better business knowledge
Internal teams are formed of people employed for 1, 2, 4 years or more. So they get the time to learn more about the company. Agencies are under the threat of the pitch, which happens every 2 years at the very least, or even more frequently, at the whim of a C-suite. And considering you're not selling peanuts or pieces-of-cake, each agency you employ has to start at the bottom of the learning curve.
There you have it: reasons why inside teams perform better. Do you know any other reasons or benefits of having in-house marketing teams? I'd love to hear them :)
PS. I will follow up with posts on when should you internalise and when you should outsource a marketing capability. And also what benefits agencies bring.