Prog IO: Brands Are In-Housing And Agencies Are Adapting

The in-housing trend is real, but agencies aren’t getting kicked to the curb. Their role is simply evolving.

“Agencies have been around for years, and they’re not going away,” said Freddie Liversidge, HP’s director of digital activation, speaking at AdExchanger’s Programmatic IO show in San Francisco on Tuesday.

HP recently completed a multiyear process to bring its programmatic media buying in house – and just launched its first campaign on Monday. Yet some tasks, like TV, out of home and print advertising, are staying with the agency.

“Those are still powerhouse agency buying capabilities,” Liversidge said.

When agencies go in house, they often embrace a hybrid model in which they get more control while also taking advantage of an agency’s purchasing power.

Omnicom media shop Hearts & Science, for example, has several marketer clients that have gone the hybrid route. They own their own but take advantage of the technology rate they can get through their agency, said Megan Pagliuca, chief data officer at Hearts.

“There is a true clout advantage that exists,” even in digital, she said. But it’s also “important for marketers to own their data and their technology relationships.”

It’s a common misconception that in-housing is an all or nothing proposition. Most brands work with multiple agencies, even if they’ve got hands tapping away on keyboards.

When Uber started in-housing roughly four years ago, its agency advised it on how to use programmatic as a branding tactic rather than just for performance.

“They work as an extension of our team,” said Bennett Rosenblatt, programmatic tech lead at Uber. “Knowing what you’re good at and being open to letting partners in to help with what you’re not good at is a great approach.”

While agencies were once reluctant to admit in-housing was happening at all, many today have built business models around it and help clients take the leap.

“I can see them adapting,” said Liversidge, who worked at Essence and Deloitte before joining HP, whose agency is actually helping the brand bring its media buying in house.

But brands also need to adapt when they decide to take their destiny into their own hands.

Bringing the buying function in house means more transparency – but it can also mean a dose of reality for advertisers that are used to agencies that “package things up to look good,” Liversidge said.

In-housing means that brands are going to see the results of their efforts, warts and all, with no agency pizzazz to soften the blow.

“When things go wrong,” Rosenblatt said, “you can’t just fire your agency, which is what brands usually do when they don’t like the performance.”

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