Tag: Agency

The contours of the media landscape are ever-changing. What was once ubiquitous is now far less so. By the end of 2022, 39.3 million US households cut the cord on traditional cable, a number expected to hit nearly 47 million households by the end of 2024.

Perhaps it’s no surprise that so many are saying bye (or never saying hello) to traditional cable with a plethora of streaming services like Netflix, Prime TV, Hulu, Apple TV+, Disney+, and more, which allow viewers to watch what they want, when they want, for less than the cost of a traditional cable subscription.

What is CTV?

In this rapidly shifting landscape, digital marketing is experiencing major change, with Connected TV—or CTV—emerging as a pivotal player, transforming how audiences engage with content. CTV is any television set that connects to the internet and streams digital video content through built-in smart TV functionality or external devices like streaming sticks like Roku, set-top boxes, or gaming consoles.

With this technology, viewers can access a wide range of content that goes far beyond traditional broadcast channels, like streaming services, on-demand video, and internet applications. All of this is causing major shifts in how brands advertise to their audiences, with CTV advertising in ascendancy and changing the TV advertising game. Let’s dig in.

The What and the Why of CTV Advertising

CTV advertising refers to video ads delivered through a streaming service while a viewer watches a TV show, movie, or other video content on an actual TV set via a connected device like Firestick or Roku or directly from a smart TV. For most streaming services, CTV represents over 80% of all viewing, the remainder occurring on other internet-connected devices like laptops, smartphones, and tablets.

Unlike traditional television advertising, CTV advertising leverages viewer data like demographics, viewing habits, and interests, allowing for a more targeted and personalized ad experience. Advertisers gain improved measurement and tracking abilities, allowing for smarter and more efficient ad spending — and the ability to reach more niche audiences with greater precisions.

Evolution of TV Advertising

Traditional or linear TV advertising lets advertisers reach millions of viewers all at the same time. Linear TV advertising is what you see when you watch broadcast or cable TV — the traditional, old-school TV advertising that’s been around for decades. Linear TV ads reach everyone watching a particular program rather than just their intended audience. And measuring the success of a linear TV ad campaign is more nebulous — it’s hard to know if anyone went to go buy something after watching the ad.

With changing viewer behavior as cable and satellite TV use continue to drop, advertisers are instead following their viewers over to CTV, lured by more measurable ad performance metrics and better-optimized campaign management overall. As linear advertising spend declines, CTV ad spend is fast on the rise.

Ad spending for CTV is expected to reach $21.45 billion in 2024, an increase of 16.2% from 2023. In 2025, it is forecast to hit $24.4 billion, growing year over year by 13.9%.

CTV Advertising vs OTT Advertising

OTT means “Over-the-Top,” referring to content that goes “over” your cable box, providing access to TV content via an internet connection instead of with a cable cord or satellite. While OTT and CTV are often used interchangeably, and can refer to the same thing, it’s important to note that OTT is how video content is delivered to viewers — it can stream content across all devices, like mobile and desktop. CTV only streams content onto smart TV screens, which is why it is often referred to as streaming TV advertising.

OTT ad inventory tends to differ from CTV, which typically has premium network content similar to what you would find on traditional TV. In contrast, OTT offers a much wider range of inventory.

So, Why Use CTV ads?

If you want your ads to help you find users who actually want your products or services, CTV ads are the way to go. As streaming services like Hulu and Netflix adjust their pricing models to an ad-supported tiered system that displays more ads to folks on less expensive plans and fewer or no ads to those on higher plans, marketers can now zero in on their demographic with far more precision.

Here are a few other perks that come with CTV ads:

  1. Multiple precision targeting methods

With linear TV, targeting is limited to finding shows that best index against ratings — the system network television uses to make programming decisions and to price advertisements. But Nielsens’ typically can only offer broad age and gender demographic metrics, like women 25 – 54 and men 18 – 49. But CTV advertisers can leverage similar digital targeting to Google and Facebook, which means audience segments can be based on everything from income or education level to personal interests and more.

Some of the top CTV targeting options to get familiar with include:

  • Geolocation targeting
  • Contextual targeting
  • Retargeting
  • Time-of-day targeting
  • Lookalike targeting

  1. Hyper-local targeting

With CTV ads, it’s far easier to pinpoint consumers based on their IP address, which means ads can be hyper-localized and served to viewers in far smaller geographic areas than with linear ads. Messaging can be highly customized based on where the viewer is located. For example, a spa with four locations can send the right commercial to the right viewers closest to each location.

  1. High Video completion rates

Superior targeting means that CTV ads are far more likely to be truly relevant to those viewing them—which means they are more likely to be interested in the ad and engage with it until completion. Using automatic content recognition technology, or ACR, CTV providers can provide real-time, second-by-second completion rate data, which helps advertisers hone the effectiveness of their marketing campaigns.

  1. Detailed attribution measurement and accuracy

CTV ads allow advertisers to measure the effectiveness of their brand campaigns more accurately via conversions — they can see who came to the brand’s website and completed a purchase after viewing an ad. With time and increased data, advertisers can learn what creative worked best and which publishers, dates, times, and other factors had the greatest impact on conversions.

 

BOTTOM LINE
Marketers, if you want to lead your company’s CTV marketing innovation charge but need help figuring out where to start, Creative Circle can provide the talent and build the teams to help you perfectly craft and precisely target your brand to shine on the TV screen. The media landscape is fast evolving — to succeed, it’s important to prime your business to be in step with the times.

In 2011, Kat Gordon, a Creative Director, got firsthand experience with how women were often left out of pitches and essential meetings — and why it matters. Her agency had an important pitch to Saab. But when they actually went to do the pitch, the team was a wee bit lopsided: 16 men and (just) 1 woman, and — spoiler — they didn’t win the pitch. Wanting to better understand why, Gordon decided to do some research on women in creative leadership at ad agencies. She was dismayed to find only 3% of Creative Directors were women, so she dug a bit deeper to get at why agencies were so woefully short on women in Creative Director roles. Overall, she found that there was a glaring lack of:

  • Motherhood support
  • Female mentorship
  • Women negotiating the salaries they deserved
  • Awareness that a woman’s perspective was critical for connecting with consumers
  • Recognition for women’s work, due to gender bias in awards juries

She wondered if part of this issue had to do with men making the majority of purchases. She kept digging, and it turned out that was not the case. Apart from only three categories where men dominate purchases in the market, women were making the majority of purchasing decisions, effectively making them the superset, not the subset. And with the rate at which women were building wealth and influence in society, Gordon concluded that it was simply myopic to overlook them. Unfortunately, advertising, at least at that point in 2008, had largely been doing exactly that. Case in point: the Saab pitch.

All of this became a rallying call for Gordon to create change in the advertising industry — and so she birthed the 3% Conference with the straightforward goal of growing the number of women in top creative marketing jobs and expanding diversity and inclusivity within the industry (especially since, of that 3% cohort of women Creative Directors, an even smaller percentage were women of color).

How are things for female creatives today?

Flash forward to 2023 — some change has happened, but not as much as you might think. The pandemic created a seismic shift in how and where we work, creating an unintended revolution of more flexible policies that have helped women (and men) juggle their home and work lives. Although conversations around equity, inclusion, and opportunity have grown, the lack of representation of women as creative directors persists. Ironically, women hold the purse strings, making more than 80% of all purchasing decisions — not to mention 60% of social sharing — but the advertising intended to help sway their choices is often not ideated or produced by women.

However, this is not an ad industry-wide issue. Whereas women make up roughly half of the advertising industry’s workforce, as of 2023, women only hold about 12.6% of Creative Director roles in the sector. Even as women have seen their economic impact grow, contributing 37% of the Global GDP, substantial discrepancies abound. Despite women playing an increasingly significant role in driving consumer purchases, they are still conspicuously absent from the command center of creative decision-making.

Why representation matters for your business

Women account for $20 trillion in annual consumer spending, but according to a 2019 study, 66% of women don’t actually connect with what they’re seeing in advertising. Even worse, 60% say that ads have an outdated view of women.

Given that most purchasing decisions are made by women, it is critical to ensure that advertising messaging and storytelling align with their experiences, perspectives, and values. However, when creative leadership lacks adequate gender representation, the risk of producing marketing content that fails to resonate, or worse still, misrepresents women is high — and the ensuing impact on the business’s bottom line can be sizable.

Check out what some key decision-makers in the advertising industry have to say about how women’s desires and needs have shifted in a recent Quantcast article, Why It’s Time to Change the Conversation About Women in Advertising.

“Between 2011 and 2021, the number of women drinking beer has increased 12%, which is four times faster than men. So the idea that women don’t drink beer — those days are over.” Josephine (Fien) Bertrams, Senior Vice President and Chief Corporate Affairs Officer, Heineken USA.

“According to Statista, two-thirds of women are self-proclaimed sports fans. And you’re seeing them not only as fans, but as engaged participants in sport on social media. And for brands, that’s important – that’s where the audience is. I also found that 80-90% of women sports fans don’t feel like they’re being properly spoken to by brands. This is where the data and AI part comes in. This is an opportunity for us to really personalize and customize messaging. That’s what I’m excited about in this space.” Leah Meranus, North America CEO, dentsu X.

“In the month of January 2023, we had more women betting than in the entire year of 2021. Women are sports fans and sports betting is a form of entertainment. It feels scary at first, but there’s not that barrier that everyone assumes. Being able to do it digitally on your phone has opened it to everybody.” Jennifer Matthews, Vice President of Brand Strategy, FanDuel Group.

This is just the tip of the iceberg. Women’s desires are changing in many ways, and these are just some that go up against ingrained ideas of what is “male” territory.

Closing the gender gap

Advertisers need to adjust exactly who is crafting the narratives used to sell products across the board, especially when women are often the main audience marketers are trying to reach. Tone-deaf marketing will continue to haunt brands, effectively sending market share to brands that aim to reach women where they are today and choose to amplify women’s voices through commensurate representation in the creative suite.

To truly address this disparity, agencies need to actively promote women into key creative leadership roles and create environments that foster advancement, growth, and opportunity for women. This means creating dedicated mentorship programs, flexible work policies, and addressing inherent biases in hiring and promotions. What’s more, being intentional about vendor and partner selection that is representative of a brand’s audience can also go a long way in connecting with a brand’s intended audience.

It’s no secret effective communication thrives when diverse voices are behind branding and marketing efforts, and it’s high time women’s influence as high-level creatives mirror their consumer purchasing power. Inclusion, among other things, means producing work that is relevant, authentic, and impactful. It starts from the inside out, not just with a script that pays homage to women in March but forgets them come April.

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Bottomline

The 3% Conference now goes by the name 3% Movement, and its mission to bring the number of female Creative Directors to 50% is well underway. By giving agencies a clear road map on how to champion female talent and leadership — along with annual conferences, a vibrant online community, a student scholarship fund, and so much more — the 3% Movement is helping lead the change for a more inclusive world.

How does your team square up? Are your creative leaders reflecting the purchasing power of women? If your goal is to diversify your team and be more inclusive of different viewpoints, Creative Circle can help you (and your bottom line while we’re at it). Talk to us if you’re ready to ensure your brand is effectively communicating its core values to its core customers.

Influencer culture has taken over the world — but has it completely conquered the marketing world? In this fast-paced space, brands continually seek smart ways to connect with their target audience. In recent years, the advertising world has been marked by a massive transformation — moving away from traditional advertising methods to embrace increasingly digital avenues for promotion. The rise of influencer marketing is one of the more significant trends helping reshape the ad industry in the last decade.

The Meteoric Rise of Influencer Marketing

Using celebrities and public figures to sell products is nothing new. After all, brands have long hired famous actors, athletes, and musicians to endorse their products and services on television, billboards, radio, and print.

However, the rise of social media platforms like YouTube, Instagram, and more recently, TikTok has minted a new class of social media celebrities — with massive followings and influence over their fans — commonly referred to as “influencers.” These influencers have become a marketing juggernaut for brands looking to promote their products and services to a younger, more digital demographic.

Influencer marketing strategically uses social media stars to promote brands, products, or services to their audience on their social channels — an approach that has grown exponentially in popularity, particularly among Millennials and Gen Z. As social media platforms thrive, influencers wield significant influence over consumer behavior.

Here are some of the top reasons influencer marketing has such an outsized influence on advertising.

Where Influencer Marketing Excels

Niche Audiences and Targeted Reach

One of the main advantages of influencer marketing is its ability to precisely target niche audiences. While traditional advertising can reach a mass audience, it often lacks relevance to more specific demographics. By leveraging the power of influencers, who have amassed loyal followings within particular niche groups, brands can connect with audiences who are genuinely interested in their wares or services — creating a more meaningful and significant engagement. This is a departure from the more traditional approach of reaching as many people as possible, whether they’re interested in the product or not.

One-Way vs. Two-Way Engagement

Traditional advertising is a bit of a one-way street, offering limited engagement opportunities with a brand’s target audience. Companies produce ads and hope people will see or hear them and act. Influencer marketing has upended that mono-directional approach by creating a space where brand promotion is more engaging, authentic, and relatable — letting brands partner with influencers who have cultivated a loyal following that essentially hangs on their every post, purchase, and stylistic whim. And this often enables them to promote a brand’s offerings more organically than traditional routes, making influencer marketing a go-to advertising tool because it offers a more tangible (and measurable) connection to their target audience.

Not Just for Big Brands

Influencer marketing has also disrupted the traditional advertising model by making it easier for smaller brands to compete with major industry players. In the past, large brands with big advertising budgets were able to dominate the market. Influencer marketing has upended this status quo, allowing smaller brands to work with influencers who actively engage their dedicated following and ultimately reach their target audience more effectively.

Measurable ROI and Engagement Metrics

In traditional advertising, success is typically measured by the reach and frequency of ad views but often struggles to measure the direct impact of its marketing and ROI. In contrast, influencer marketing offers more transparent, measurable outcomes, letting brands analyze performance, track conversions, and measure direct impact on their bottom line. Success is typically measured by engagement, such as likes, comments, shares, and saves — a more data-driven approach that empowers brands to make increasingly informed decisions which has led to a greater emphasis on creating engaging and shareable content.

However, there are also profound benefits to more traditional forms of advertising that we should keep in mind.

Benefits of Traditional Advertising

Broader Reach and Wider Audience

Traditional advertising excels at achieving a broader reach and vast audience because television, radio, and print — despite digital incursions — have retained sizable viewership and listenership. Recent studies have underscored the enduring power of television, with 88% of people watching TV daily, which means brands that advertise via traditional commercials can reach diverse demographics — including those less engaged with digital platforms.

Trust and Reliability

Consumers see TV advertising as more trustworthy, with 63% acknowledging its reliability. This legacy of trust is built from the presence of reputable brands on TV and print media, conferring a deeper sense of legitimacy.

Emotional Impact and Brand Building

Traditional advertising has a unique capacity to evoke emotions that can leave a lasting impression on viewers. TV commercials craft memorable experiences with masterful storytelling, visuals, and curated music choices. This kind of potential outsize emotional impact can help cement brand recognition, fostering deeper connections with consumers. When TV advertising is part of an omnichannel campaign, with print ads and out-of-home signage, the brand message can reach consumers at key touchpoints in their daily lives.

It’s a Complementary World — Traditional Agencies Are In a “Yes, And” Frame of Mind

Instead of choosing between marketing modalities, agencies are leaning into the strengths of both traditional and influencer marketing, finding ways to stitch cohesive, blended strategies together. By combining the two, brands can leverage the strengths of each approach, maximizing impact. While traditional methods cast a wider net, raising brand awareness, working with influencers can provide a more targeted approach that reaches specific niche customer segments more successfully.

Many traditional advertising agencies have created social-focused teams that specialize in leveraging influencer marketing and other social-based marketing. These teams sometimes partner with influencer marketing agencies, whereas others are beginning to manage their own influencer engagements. Perhaps unsurprisingly, every major agency holding company has been on “a shopping spree,” snapping up influencer marketing firms, revealing how forecasting gurus see the trajectory of the industry. Traditional agencies are learning to adapt more quickly to technological shifts in the landscape, and buying up companies with specific expertise has proven to be the fastest way to get up to speed — or, at the very least, not fall woefully behind.

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Bottomline

Brands are approaching advertising by shifting focus from a brand-first approach to one increasingly centered on the individual, revolutionizing how success is measured. With the growth of digital-first marketing, smaller brands are better able to compete with larger ones, and smaller niche audiences are increasingly feeling more seen, with brands increasingly recognizing the value of leveraging influencers and even micro-influencers). New features, tools, and guidelines are helping make influencer marketing a more transparent and accountable avenue, ensuring that brands can engage across the spectrum and feel safe as they do so.

The more things change, the more critical it becomes to position your brand for future success. If you need help navigating the increasingly complex waters of advertising today, Creative Circle has social media and traditional marketing experts ready to help craft cohesive strategies for your brand — ones that will move the needle.

The advertising world lies largely in the hands of six agency holding companies — Omnicom, Havas, Dentsu, IPG, WPP, and Publicis — which serve as the overarching structures that own and control myriad smaller advertising firms. These agency holding companies all face the same external business challenges — slowing growth, new competition, and the growing need for new skills. But they are taking divergent paths in confronting these struggles.

Historically, holding companies followed the same tried-and-true playbook — growing via acquisition model and accruing clout as they ramped up scale, thereby increasing access to major clients. However, the recent shift driven by digital has rendered scale and buying power less salient than access to the right data.

The Rise of the New — Consulting Firms Enter the Agency World

Ad agency silos have long blocked access to said data, inhibiting collaboration and slowing down work streams. These weaknesses were exploited by consulting firms, who successfully muscled into the advertising game with their own targeted enterprise data offerings to pose a significant competitive threat.

To battle the Accentures and Deloittes of the world, the big six agency holding companies are all vying to get to the same place — win more of their client’s budgets and take back some of the market share they’ve more recently ceded to consulting firms. To get there, however, they’re taking different routes. Some are betting on data ownership, while others are doubling down on finding efficiencies across their networks and following different paths.

Agency Brands — Do They Matter Anymore?

While some agency holding companies are doubling down on their marquee agency brands, others are looking for efficiencies by having their historically competitive agencies come together to work as a “single” agency.

Publicis has perhaps been the most vocal about operating as a “single” company since acquiring Sapient in 2014. Their integrated strategy won over major global clients like GSK and Marriott, albeit at the expense of individual agency contributors, shared Greg Paull, co-founder and principal at independent global marketing consultancy R3.

Publicis has been pushing its “Power of One” model for years, through which it transformed its business model and organizational structure to center around client needs by facilitating access to all its services across agencies in a fluid, seamless manner — touting the move as one from holding company to platform. By pooling creative, strategic, and technology expertise, their aim is to provide top-tier service by cohesively leveraging the individual strengths of its many subsidiary agencies.

In a somewhat mixed approach, IPG and Omnicom continue to spotlight the achievements of individual agency brands like McCann and BBDO on earnings calls, capitalizing on the brand equity that these agency names evoke. Still, behind the scenes, they also have a history of combining services across agencies to service major clients. Omnicom Media Group is now managing new business development for all of its subsidiary agencies in order to eliminate operational siloes.

WPP, on the other hand, has been merging individual agencies across disciplines to form sub-holding companies that effectively pool resources, doubling down on its corporate brand and leveraging talent across its network more cohesively.

Does this Transformational Collaborative Business Model Work?

Like all things, there is an upside to this cross-agency, collaborative trend — and a downside. Clients see a single bill for services without the dust-ups that can happen behind the scenes. However, what looks good to the C-Suite and shareholders may not work so well for the folks on the ground.

The land of ‘cooperative creative’ can provoke unrest among employees, and executives have complained about the lack of communication despite newly broken-down siloes. Others cite a sense of confusion about where their loyalties should lie if they only work half the time for the actual agency that employs them.

Paull from R3 said that holding companies that veer too far in the direction of a collaborative singular organization may struggle, as “intercompany conflicts are still a top five issue for big brands.”

Pfizer — A Client-led Push for Consolidation

Sometimes, however, it’s the clients who call the shots. After all, the customer is always right. Pharmaceutical giant Pfizer decided to consolidate its agency relationships and house its account, worth $2.8 billion in 2022, to a single agency. The NYC-based pharma company, whose accounts had historically been spread across a vast network of agencies and agency holding companies, wanted to find economies of scale and simplicity with its advertising agency engagements on the heels of pulling in tens of billions of dollars from its COVID-19 drug and vaccines.

But in September 2022, Andreas “Drew” Panayiotou came aboard as the company’s inaugural biopharma Global Chief Marketing Officer role. His goal was to “bring Pfizer’s marketing organization into the same transformation the larger organization has undergone over the past years — to be more innovative, nimbler, and data-driven,” Panayiotou told PR Week in an interview. “By consolidating and centralizing our agency model, we will use scale to our advantage to get the best of the best from the agency world and power better content creation.”

In February 2023, the brand initiated a massive global agency review to regroup its media, creative, production, and PR duties under one roof. After an intense process of scrutinizing proposals, Pfizer chose two agencies: IPG Health to spearhead creative and Publicis Collective to lead media planning/buying, technology, data, and creative production.

Whether this model will ultimately ladder up to better work for a better price remains to be seen. Only time will tell.

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Bottomline

Regardless of the way in which the big six advertising holding companies position themselves to remain competitive in the rapidly changing advertising world, they’re all doing what they can to find organizational efficiencies while augmenting service offerings as they seek to find cost savings, reduce churn, and hang on to clients. It’s clear they have their work cut out for them.

As the world of advertising continues to twist and morph, many brands are looking for new ways to reach their audiences. If you are looking for innovative, creative solutions at scale, Creative Circle offers a full suite of creative and marketing services focused on optimizing your business and solving your unique challenges.

If you had asked tech gurus ten years ago where AI would have the most significant impact, creativity would not have been at the top of the list — if it even garnered a mention at all. But 2023 changed the game with the explosive advent of generative AI platforms like Chat GPT and Midjourney, which have completely disrupted the creative landscape. And with this tsunami of change comes a host of hard-to-answer questions about the future of creative work.

Ad agencies, Hollywood, and more are grappling with existential questions about the origins of creativity and what that means for the humans whose ideas serve as the very foundation of generative AI technology. It’s clear that AI is here to stay — and major marketers are figuring out how to capitalize on it — with agencies increasingly seeing their role as mediators between this new technology and brands.

The ad agency landscape is primarily led by six agency holding groups: WPP, Omnicom, IPG, Havas, Dentsu, and Publicis, each of which owns hundreds of agencies.

Until very recently, the ad industry had been less impacted by technological progress that has impacted other industries like print media, music, travel, retail checkout assistants, and more. Now, there is a growing tension between the allure of cost savings that AI could bring and what its implementation means for creatives. To find the right way forward, many agencies have formed cross-departmental AI task forces to uncover the opportunities and limitations of the technology.

Some agency holding groups have taken a more strategic approach to using generative AI internally and with clients, setting safeguards as internal groups assemble to work on their due diligence with this burgeoning technology.

How Key Agency Holding Companies are Managing AI

Here’s how some agency holding companies are futureproofing themselves as AI becomes increasingly ubiquitous.

WPP just announced on January 2024 that they are investing $317 million in AI this year while assuring employees and shareholders that they won’t forget about the company’s roots in creativity, said CEO Mark Read.

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Omnicom CEO John Wren said the company’s outlook on AI’s potential is evolving. “We’ll be embracing it as quickly as we possibly can,” Wren said, adding that it would help employees and benefit clients.” In November 2023, the organization announced a groundbreaking collaboration with Getty Images that gives its agencies early access to Generative AI by Getty Images, a generative AI tool that’s trained only on Getty’s licensed photo library, ensuring a commercially safe and legally protected creative sandbox.

Also of note, Omnicom is the first advertising holding company to join Adobe’s Content Authenticity Initiative (CAI), comprised of a group of media and tech companies, NGOs, academics, and others, which seeks to increase trust and transparency in digital content by the general public.

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Havas has been implementing AI in its creative agencies to make teams more efficient and effective. The company has taken a business-first approach to integrating the new technology into its agency subsidiaries. As digital advertisers say goodbye to cookies, Havas has unveiled an AI-enabled media planning methodology that optimizes buys as the cookie-less future becomes the cookie-less today.

With respect to creative, copywriters can breathe easy, according to Havas Media Group. The group has made public its intent to use AI to optimize creative, not replace its creatives.

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Publicis is placing AI at the very core of its business. The last six years have seen Publicis evolve from a holding company to a platform — and now, they’re using AI to become the industry’s first intelligent system. Publicis is now positioned to harness the power of AI by connecting every data point, across business units and geographies, to put the data in the hands of all its people. In a January 2024 press release, they shared that “everyone within Publicis will become a data analyst, an engineer, an intelligence partner, with all the information they need at their fingertips to supercharge client growth.”

 

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Bottomline

The AI landscape will be a bit of a Wild West for some time still, especially while the technology continues to evolve at breakneck speed. Some advertising business leaders see generative AI as an accelerant for the industry, seeking to leverage the tech to enhance work and provide increased strategic value. Yet, others are more sanguine in their approach, preferring to wade in more slowly as they assess the boundaries of what’s possible — uncovering ways to use AI tech as an enabler instead of a total solution.

Looking for guidance on how to leverage AI for your company? Creative Circle offers a full suite of creative services focused on solving business challenges leveraging this new technology. Once upon a time, the rise of the internet struck fear into the hearts of many, but here we are today, creating great work that matters — it just might look a bit different than our pre-WiFi days.

One of the hottest questions in marketing these days is: are you in, or are you out? Many brands are setting up in-house teams to do work traditionally done by external agencies, giving birth to a new advertising and marketing model that may just have staying power.

The Association of National Advertisers, or ANA, has been doing a study every five years called The Continued Rise of the In-House Agency. The 2023 edition shows that 82% of marketers now have in-house agency teams — up from 78% in 2018, 58% in 2013, and just 42% in 2008.

What is an “in-house agency”?

For the ANA study, “in-house agency” was defined as “a department, group, or person that has responsibilities that typically are performed by an external advertising or other MarCom agency.”

In-house agencies, sometimes called IHAs, center on an internal marketing team that handles advertising exclusively for the company. IHA employees leverage their in-depth knowledge of the brand and its needs to create marketing strategies and craft campaigns without the help of an external party.

The ANA report “definitively shows that in-house agencies have become a firmly entrenched part of the holistic marketing ecosystem and are now a mainstay among a majority of marketers,” said ANA CEO Bob Liodice. But he hedged, “Agencies still play an important role for marketers, witnessed by the fact that 92% of respondents still use them. But the growth of in-house capabilities has clearly changed the client/agency relationship over the past 15 years.”

In-house versus External

Moving advertising and creative in-house is one of the most popular trends in marketing — but there is no one-size-fits-all solution. Some companies may find the initial time and investment to set up an in-house team outweigh the possible benefits. Two distinct IHA models have emerged: in-house and hybrid in-house agencies.

The completely in-house agency builds out all the digital marketing functions within the company, which gives the business total control of its data, the ability to shift tactics quickly, and confidence that privacy regulations are being followed with data. Contrast that with agency marketing — the traditional model — where marketing and advertising work is outsourced to an external team that manages all a company’s marketing and advertising work. Agencies theoretically have the strategy, connections, resources, and know-how to successfully promote a business. They often have teams dedicated to specific tasks like strategy, media buying, copywriting, design, project management, and account management who interface with the client.

Somewhere in between, we have a hybrid in-house agency model, where critical data is owned and lives with the brand. The brand usually also owns the media accounts, adtech accounts, and data management and has a small team dedicated to managing external agency activity with clearly defined goals. Marketing campaign infrastructure and accounts live with the in-house company team, while an external agency runs campaigns and handles digital data. This model often works well for companies with small digital marketing teams that need more resources and know-how to manage data in-house. Brands will often outsource media buying, especially programmatic buying, which helps explain the growing popularity of the hybrid model.

In-house marketing and external advertising agencies each have positive and negative aspects; the utility of each option varies depending on your business. Here are some pros and cons of each.

First, the pros of in-house agencies:

  • Cost — Companies often find that having an in-house agency costs less to fund and maintain, particularly for small companies. A different ANA study showed that cost efficiency is the top benefit that brands with in-house teams cite, followed by brand knowledge and nimbleness.
  • Communication improvements – An IHA bolsters communication internally between the marketing team and other departments, allowing for better cross-functional sharing of information and resources and boosting collaboration. This can help the marketing team complete projects faster, sparking new ideas and opportunities.
  • Brand knowledge — An IHA is steeped in knowledge of the brand they work for and is familiar with all aspects of the industry, enabling them to fully assess the company’s needs and craft marketing strategies that best fit at any given moment.
  • Control — Having transparency into costs and operations, especially in media buying operations, makes it much easier to identify and implement optimization tactics.
  • Data/tech ownership — As first-party data ownership becomes increasingly critical in a cookie-less, privacy-first world, there are advantages to having marketing technology and adtech in-house.

And now, some cons of IHAs.

  • Talent acquisition timeline — Building an in-house marketing team takes time. It may require an extended period to recruit, identify, interview, hire, and onboard new candidates.
  • Recruitment costs — Whether companies pay outside recruitment agencies or hire an in-house recruiter, there is a cost associated with talent acquisition.
  • Stagnant creative — An in-house team may come to rely on just a few creative styles and strategies, which can impact the ongoing success of your company’s marketing.

Here are the pros of working with an external agency:

  • Advertising fluency — Ad agencies have typically worked with hundreds and sometimes thousands of clients, which means they’ve pretty much seen it all. An ad agency may suggest activations or concepts that a brand has not considered, opening the door for innovative engagement and messaging.
  • Resources — Ad agencies have access to resources like software, high-end printers, digital equipment, and other tools that in-house marketing teams often can’t afford.
  • Connections — You know the adage, “it’s not what you know, it’s who you know” — and that holds especially true for ad agencies, which typically have connections to production companies, advertising platforms, and high-level execs that can elevate exposure for a company.
  • A plethora of creativity — With many employees and specializations, ad agencies have a leg up on offering cutting-edge marketing strategies and activations.

And now, some cons about working with traditional ad agencies.

  • Less in-depth knowledge of your brand — Agencies have many clients, so they must learn many different brand stories. Businesses must teach their agency about their products, audience, culture, goals, and future vision. This takes time, and time cost money.
  • Many clients (sometimes too many) — With numerous clients and multiple campaigns to manage simultaneously, an agency may be unable to dedicate sufficient time or resources to a specific company’s needs, which can translate to long wait times for deliverables.
  • Less creative control — Because you have less direct oversight, it can be difficult to guide an external team to produce deliverables that fit your vision.

How to choose between an in-house agency and a traditional ad agency

Here are some considerations when deciding which option is best for your company.

  • How fast does your company need to improve its marketing strategies?
    An ad agency can be a more time-effective way to move the needle on your company’s brand presence. If there’s time to build a top-tier in-house marketing team, that could be a better option.
  • What’s your marketing budget?
    Budget is a crucial consideration, as it determines what kind of team can be hired in-house and what kind of services the company can afford with an outside agency. Hiring an in-house team will typically cost more, as you’ll pay salaries rather than hourly rates. Compare and contrast costs and balance them with your timeline to help you decide.
  • What are your organization’s needs?
    Determine the short- and long-term goals for marketing efforts and assess which areas need improvement. If just a few components of your marketing campaigns require management, perhaps an in-house option is right for you. But if the brand requires a complete rethink of its advertising efforts, an ad agency may be the right choice.

Many companies like to have their cake and eat it too by choosing not to choose between IHAs and traditional agencies.

For organizations interested in dipping their toe into the world of in-house agencies, without all the time and initial financial outlay to set up an IHA team, there are companies that can provide ready-to-go creative in-house marketing teams. Creative360, Creative Circle’s services division, delivers fully packaged solutions powered by a team curated for your specific needs. You can step right in with a brand-ready team of creative specialists who provide bespoke solutions to expand your team’s capabilities and extend team capacity.

 

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Takeaway

Marketing is one of the main drivers of a brand’s success. Some companies find working with external marketing partners simpler, while others prefer to manage their brand’s presence in-house.

Whatever choice is right for your business, it’s clear that companies are pivoting how creative, adtech, data, and operations are structured into a more collaborative model. Brands are handling more of the tasks historically managed by external agencies in-house — redefining how and where advertising and branding messages are crafted. External agencies continue to be big players, but a realignment is taking place.

If you want to see what a consulting-based IHA can do for you, please reach out so we can discuss your creative marketing needs.

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