What We Learned from This Year’s Major Internal Shakeups

A transition to internal isn’t a panacea for every challenge a business faces with production, media buying or campaign strategy. In fact, going internal can cause problems when not done strategically—for one, internal agencies often encounter the same frictions with their own organizations as external ones might with their clients.

According to the 2018 Creative Industry Report, 71% of internal teams cite client behaviors (like frequent revision requests, not having enough time to deliver quality work and more) as their greatest challenge, while 37% said gaining respect from clients is a top challenge. This suggests that organizations can do more to use their internal teams more effectively.

Consider How Internal Efforts Align with the Business Strategy

For an IHA to be successful, it must serve a core business function with strategic value. Among the biggest advantages of an internal agency is its proximity to the board room and C-suite, allowing it to better act on strategic business needs. Niharika Shah, VP and Head of Brand Marketing and Advertising at Prudential, which employs its own internal agency, calls this the “in-house insight.” “I think of it as us owning the brand and being part of the business system,” she says, “which helps us understand what could be a very complex web looking outside in.”

To really get a sense of how and why an internal agency should strategically serve business needs, consider the recent story of Agency Inside, Intel’s recently downsized in-house agency. The agency was built to support a specific function, which it excelled at: reinventing the brand for a modern global audience and simplifying its messaging to consumers. As new leadership came in, the business shifted from consumer-facing to B2B—a focus that Agency Inside wasn’t built for. Intel knew they would need a new approach to support its new strategy, which resulted in shrinking the agency to support external partnerships. When considering taking capabilities such as creative, media and production internal, it’s essential that you likewise consider specific goals you hope for it to achieve. If you have specific goals—like cutting costs or producing assets at greater speed, for example—but don’t know how to execute a team to achieve them, you might turn to one of the more collaborative models like outsourcing management of your team to a strategic partner.

Carefully Consider Costs vs. Savings

Cutting cost is often cited as a main reason why businesses go internal. But the old adage to “look before you leap” very much applies here, as several organizations have found that going in-house doesn’t automatically guarantee savings. This is because the transition to internal can result in unexpected costs that reduce the potential for savings.

When Vodafone announced that they would take all their online ad buys internal, they discovered that doing so would require them to build a trading desk, an endeavor that would eat up a significant portion of the savings they’d make by cutting external agencies out of the equation. The snafu has prompted them to review their strategy—and any organization employing (or planning to employ) an internal creative production team should do the same.

On a related note, it’s worth measuring the cost of your internal team’s services with comparable external partners. According to the Creative Industry Report, a surprising 57% of internal practitioners have not been asked to do this. But identifying the value of an IHA’s services empowers them to impose chargebacks, which can help the business prioritize projects and ensure that most of the IHA’s resources don’t go toward projects with negligible perceived impact on the business’ growth.

Supporting Your Personnel

According to the 2018 Digital Trends for Creative and Design Leaders Survey, more than a third of in-house practitioners view finding and retaining talent as a major internal barrier. In today’s fragmented and shifting business landscape, if your employees aren’t growing and progressing, you don’t have an agency for the future—just an agency for today. In addition to growing talents’ skillset related to their daily duties, you should also expand their understanding of the overall business as well.

This accomplishes a few things. First, increased business understanding helps you achieve the “in-house insight” benefit to an internal team as mentioned above. Second, individuals on your team will have a greater capacity to assert themselves as strategic assets within the business, which is increasingly important as creative strategy becomes more aligned with business strategy.

Offering these unique opportunities for growth can also offset worries that prospective employees may have that doing work for one company can limit their careers. The expectation is that external agencies offer more variety and therefore greater impact on a resume. But by fostering increased business acumen, you can reframe employees’ closeness to a single company as an asset, not a limitation. And this conveniently circles back to our first point: how you manage your IHA should be in service to the specific needs for your business. By keeping these points in mind, you can gain a smoother process between agency and client while keeping morale high.