Understanding the Different Operating Models When Inhousing

What is inhousing? This is a popular and important question that the Consult team is asked. The answer is it depends on what operating model your business wants to work under. Unfortunately, it’s not as simple as going from a scenario where everything is operated by the agency (Agency Owned, Agency Managed) to everything operated internally (Brand Owned, Brand Managed). There are a range of variables and decisions that need to be defined and there isn't a one size fits all approach. 

Our team regularly supports a range of clients, across multiple channels, with inhousing. Understanding which model is right begins with understanding the business objectives that have motivated the decision to inhouse. In this blog post, myself and my colleague, Alex Lock, will step through five potential models and outline the advantages and constraints of each.

1. Brand Owned, Agency Managed

This is the simplest model. Here the brand owns the technology, providing greater control, transparency and ownership, while the agency still manages all activity.

brand owned agency managed
 Advantages:

  • Staffing complexities managed by agency experts

  • Able to leverage agency relations with publishers, media owners and tech providers

  • Easier to move to new vendors

  • Access to a broad range of expertise

  • Ownership of data

 Constraints

  • Higher cost vs agency owned

  • Brands lack proximity to elements of their marketing

  • Limited transparency

  • Limited control

  • Limited integration between brand & agency

2. Hybrid Brand Owned, Agency Partner

In this model, the brand and agency share responsibility on activation. This provides greater flexibility for the client as they can draw on the wider agency expertise, depth and breadth. The downsides include increase in cost, as tech and people increases for the client, and roles and responsibilities have to be very clear defined and managed.

hybrid brand owned agency partner

Advantages:

  • Resource can move fluidly

  • Able to leverage agency relations with publishers, media owners & tech providers

  • Access to a broad range of expertise

  • Highly scalable to grow with media

Constraints

  • Increased costs (recruitment, staff costs, tech costs, data storage costs)

  • Difficult to transfer to new vendors once established

  • Ways of working can be complex

  • Staffing complexities & cost for insourced elements

3. Hybrid Brand Owned, Agency Partner Variation

In this variation of the hybrid model, the roles and responsibilities are clearly demarcated between the agency and the brand. For example, campaign management, tagging, analytics, buying might all sit with the agency, whilst product leadership, strategy, planning and creative rests with the brand.

hybrid brand owned agency partner variation

Advantages

  • Resource can move fluidly

  • Able to leverage agency relations with publishers, media owners & tech providers

  • Access to a broad range of expertise

  • Highly scalable to grow with media

Constraints

  • Increased costs (recruitment, staff costs, tech costs, data storage costs)

  • Difficult to transfer to new vendors once established

  • Ways of working can be complex

  • Staffing complexities & cost for insourced elements

4. Brand Owned, Brand Managed

This model involves the biggest shift, as all activity is taken from the agency and managed centrally with the brand. Moving to this model will take the longest, will be the most complex and potentially the most expensive. It’s also the most challenging, as the brand loses the support of the agency partner, so must ensure processes, people, data and tech are all in place, up to speed and integrated to deliver success. However, when successful, it will often achieve many of the objectives, by providing ownership, transparency and control.

brand owned brand managed

Advantages:

  • Proximity to campaigns

  • Complete control

  • Full data & tech ownership

  • Full transparency

Constraints

  • Staffing complexities

  • Higher cost due to loss of agency economies of scale

  • Requires extensive & robust training efforts

  • Limited access to a broad range of expertise

  • Difficult to keep up with industry & tech updates, best practice 

  • Limited auditing & governance capabilities

5. Brand Owned, Advisory Partner

This often ends up being the eventual model for clients. Essentially, it’s a fully brand-owned model with the agency providing a more consultancy-type relationship that provides advice, governance, learning and development and, where necessary, overflow support (such as secondments/campaign management). This model affords brands to access industry updates, audits, training and guidance through a fluid support network that can be dialled up and down to meet their needs.

brand owned agency managed

Advantages

  • Proximity to campaigns

  • Complete control

  • Full data & tech ownership

  • Full transparency

  • Fluid support network

  • Stay up-to-date with industry updates & best practise

  • Continued access to a broad range of expertise

Constraints

  • Staffing complexities

  • Higher cost

  • Requires extensive & robust training efforts

  • Consolidated partner network required to reduce complexity

If you want to know more about inhousing or have any questions, do get in touch with our Consult team. 

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