For decades, brands have debated whether in-house media teams truly deliver better rates than external agencies. Mark Leone, partner at MadClarity, separates fact from fiction and shows why benchmarking is a secret weapon, in this week’s Mad Reality Check.
They do, right… surely? Don’t they?
A silly delusion that has endured for decades… so why am I talking about it again? Interestingly, every now and then, the debate seems to resurface, like it has now.
A recent poll from the In-House Agency Council (IHAC) found that “86 per cent of brands believe their in-house media agency rates are as good as or better than those of external agencies.”
A great headline… but are they right? More on that later.
In-house media buying isn’t new. We have worked with in-house media teams who buy their own media direct for more than 20 years. Benchmarking their buying performance against other in-house buying operations, and agencies of all shapes and sizes. Not just media rates, but all elements that help to deliver great campaign performance.
It wasn’t all that common 20 years ago and whilst in-housing has grown significantly… it is still a small share of all media buying in Australia. Much lower than some suggest, so let’s not get too carried away. But it is growing, nonetheless.
The growth is being fuelled by two factors.
Agencies producing mediocre work. Both a lack of strategic smarts and the distrust created by the agency obsession with principal media deals and other methods of extracting yield from clients. Many brand teams believe they can do better themselves. At least they can trust decisions are being made in their best interests.
Combine this with reducing barriers to entry in many channels, and you can understand the interest to in-house from some brands. For example, just about any advertiser, of any scale, could manage their social media in-house today. In fact, based on what we have seen, most probably should. But broadcast media on the other hand, is much more complex. There aren’t many who do this well in-house today. It isn’t easy.
The simple fact is, bigger agencies do not necessarily buy better than either smaller agencies or in-house teams. They haven’t for the 20-odd years I have been doing this work. We have truckloads of data, from dozens of advertisers over decades to prove this point. Some of you may not believe it. Some of you won’t want to believe it. But it is true.
But simply moving your media buying to smaller agencies or in-housing it will not guarantee you will be better off. We know, we have seen the good, the bad and even the ugly from all buying models. It can be more difficult than it seems.
One of the biggest challenges that smaller agencies and in-house teams face is often knowing what good looks like. How far can they genuinely push the deal? It is normal for this to happen?. When you are trading smaller volumes, you have less visibility on the market.
The solution to this is greater visibility on what the best are getting. It is where regular benchmarking of performance comes in. It helps you become less reliant on the larger agencies… or any agencies. It helps set challenging yet realistic performance targets.
We work with many brands that know this. A number of these buy some, or even all, their media in-house. They don’t use benchmarking to check up on their in-house teams. They use it for vital intelligence to support their in-house teams. Their secret weapon when doing deals
