To in-house or not? How brands are taking back control and how the role of agencies is evolving

by Toccara Baker

Posted on 11-13-2018

As dig­i­tal rede­fines how brands relate to con­sumers, mas­sive changes in tech­nol­o­gy and con­sump­tion habits are trans­form­ing adver­tis­ing. In response, busi­ness trans­for­ma­tion is in full swing, and the pace of change is staggering.

The oppor­tu­ni­ties for brands are huge, but so are the risks. In a world dom­i­nat­ed by data, issues around con­sumer pri­va­cy and brand safe­ty have raised the stakes for brands in recent years. In response, brands are recon­sid­er­ing how they run their adver­tis­ing oper­a­tions, and where the divide lies between them and third-par­ty sup­pli­ers. It’s about inject­ing much-need­ed trans­paren­cy into the val­ue chain, and at the same time about brands tak­ing more con­trol of their data in order to bet­ter meet con­sumer expec­ta­tions in this new world. It’s no sur­prise that, accord­ing to a sur­vey by Adobe last year, up to 62 per­cent of Euro­pean brands are look­ing to take full own­er­ship of their media buy­ing by 2022.

A time of disruption

This is a piv­otal moment for brands and all sides of the adver­tis­ing sup­ply chain. Con­sumer dig­i­tal touch­points con­tin­ue to pro­lif­er­ate. Mar­keters face an explo­sion of con­tent across these chan­nels. Mean­while, con­sumer expec­ta­tions keep grow­ing. Just as dig­i­tal gives mar­keters more choice than ever about how they engage with con­sumers, it also gives con­sumers more pow­er to engage with brands on their own terms.

In this con­text, data has become the lifeblood of mar­ket­ing. The holy grail in adver­tis­ing is now to serve the right con­tent to the right cus­tomer at the right time. Per­son­al­iza­tion is the end-all-be-all, with brands on the hook to cre­ate expe­ri­ences that engage con­sumers more rel­e­vant­ly and based on real-time needs.

To meet these demands, there is increas­ing focus on the buy­er jour­ney and how adver­tis­ing chan­nels need to be opti­mized in response. Brands are get­ting busy col­lect­ing data from across chan­nels and build­ing new attri­bu­tion mod­els to under­stand and mea­sure how con­sumers are engag­ing across these. On top of that, they need to deal with large vol­umes of con­tent to be man­aged, opti­mised, and deliv­ered to a more diverse set of audi­ences. At times this can be overwhelming.

Increas­ing­ly all these ele­ments need to con­nect togeth­er: Brands need to find ways of uni­fy­ing their cus­tomer data, which includes orches­trat­ing its col­lec­tion from mul­ti­ple sources with­in the orga­ni­za­tion as well as under­stand­ing how to derive insight—and take action—on it.

This is where Arti­fi­cial Intel­li­gence comes into the pic­ture. As its capa­bil­i­ties grow across the mar­ket­ing tech­nol­o­gy stack, AI becomes an ever more pow­er­ful tool for media plan­ners as they look to accel­er­ate data col­lec­tion and improve deci­sion-mak­ing based on data.

So the per­fect storm is set – a con­flu­ence of tech­nol­o­gy dis­rup­tion, mass con­sumer adop­tion and ris­ing con­sumer expec­ta­tions. But as data becomes the cur­ren­cy of this new econ­o­my, we hit the ‘pri­va­cy para­dox’: As data pri­va­cy con­tro­ver­sies emerge and reg­u­la­to­ry scruti­ny increas­es, brands also have to con­sid­er how pri­va­cy needs to inform every­thing they do.

Tak­ing back control

This is where the idea of con­trol comes in. As enter­prise data con­verges, brands are becom­ing aware that it’s impor­tant to take more con­trol of their adver­tis­ing oper­a­tions so that they can join data from across their orga­ni­za­tions and make smart deci­sions with it. It also allows them to bet­ter under­stand where emerg­ing tech­nolo­gies like AI can add val­ue. More crit­i­cal­ly, it allows them to under­stand what data is being collected—and how it’s being used—to help them respon­si­bly unlock its val­ue while build­ing and sus­tain­ing the trust of their consumers.

In response, brands are start­ing to explore new oper­at­ing mod­els for their adver­tis­ing. The pic­ture is var­ied: A minor­i­ty (about 18% accord­ing to a recent sur­vey) have already moved their pro­gram­mat­ic func­tions in-house, and plan to con­tin­ue in this path. A con­sid­er­ably larg­er group (47%) are adopt­ing hybrid mod­els where­by they are par­tial­ly take these func­tions in-house. Many are still explor­ing their options and remain unde­cid­ed about how to move for­ward. About one-fifth have no plans to in-house at all. [Source: Adver­tis­er Per­cep­tions Omnibus April 2018]

In this frame, agen­cies are look­ing towards a new future, and it’s an excit­ing one. More and more, the val­ue of agen­cies is cen­tered on their capa­bil­i­ties around con­sul­tan­cy and cre­ativ­i­ty. The evo­lu­tion of the agency mod­el is increas­ing­ly allow­ing agen­cies to get bet­ter paid for these capa­bil­i­ties and for the depth of expe­ri­ence they bring to the table. Brands also need to part­ner with agen­cies to keep up with best prac­tice and stay on top of trends in an ever-chang­ing mar­ket envi­ron­ment. So, far from play­ing a dimin­ished role, agen­cies are reeval­u­at­ing where their core strengths lie and reap­ing new val­ue from them.

What does this new era of con­trol look like for brands? Greater own­er­ship of data will mean fuller own­er­ship of tech­nol­o­gy con­tracts and deploy­ments, increased trans­paren­cy into costs along the adver­tis­ing val­ue chain, and a grow­ing onus on brands to set clear­er roles and respon­si­bil­i­ties between them­selves and their sup­pli­ers. It also means greater respon­si­bil­i­ty for brands to define success—and dri­ve busi­ness results—based on data, and with that the need to ensure they have safe­guards in place to respon­si­bly unlock the pow­er of data, in order to build and sus­tain con­sumer trust.

How­ev­er things shape up, the future points towards a mod­el which places adver­tis­er needs at the cen­ter of the val­ue chain. This is in turn reflec­tive of the real­i­ty that con­sumer needs—the need for brands to stay rel­e­vant with con­sumers, in a rela­tion­ship found­ed on trust—are them­selves at the cen­ter of every­thing brands do. On this basis, the whole val­ue chain needs to embrace this evo­lu­tion as a win-win.

Topics: Digital Transformation, advertising, artificial intelligence, Content, data, digital, Targeting, UK, UK Exclusive, Digital EMEA