There are a lot of weighty decisions for businesses going through transformation, particularly around what functions to take in house. Yango’s director Nick Murdoch provides some tutelage on how to tackle the challenge of media in-housing
With the commercial landscape evolving at break-neck pace, most mid-market enterprises are currently undergoing business transformation in some form. It’s a serious undertaking and requires the entire operation to change its outlook, processes and, yes, sometimes even people. Mid-market businesses have unique challenges and with over 51,000 medium sized businesses in Australia (Australian Bureau of Statistics, ABS) how they negotiate the current era of digital disruption is likely to determine their long-term viability and impact the wider economy.
Media in-housing is bringing in some or all media functions into your business that have previously been handled by external agencies. Driving this trend is the desire to own and control the customer data that sits at the core of the modern day, digitised marketing department.
Many clients are rightly demanding they take back ownership and control of this valuable business resource. For businesses, on the surface there are some obvious benefits of media in-housing, such as reducing agency fees, owning all their data, getting to market quicker and generally being more efficient.
The reality, however, is much more complex. For nearly all legacy mid-market businesses in Australia, they face the same numerous challenges of media in-housing – up-front costs, specialist expertise, hiring and retaining the right staff.
Consequently, many businesses opt for a hybrid model. This prioritises a slow and steady change, where some essential services and data are housed internally but implemented externally by a trusted partner. A hybrid approach calls for an expert lead to drive it internally – a head of digital or digital savvy marketing director – who can orchestrate the grand vision.
Once a decision has been made to go down this path, here are some things to consider.
What to do with all that data
In an age where data is king, how businesses collect, house and implement it is fundamental to their long-term health. It also drives the marketing function for the years ahead, so it’s imperative to have a clear strategy and direction. Mid-sized businesses without dedicated data, analytics or campaign management resources may need external help. This means a third party that can work with the in-house lead to devise and implement a strategy is key.
The chief goals should be implementing effective ways to capture customer data and to harness marketing technology that houses and enables businesses to activate that customer data. Having access to a combination of ad technology and platforms that helps to source new customers through data driven prospecting is also key.
A good (and cost effective) balance for a business to strike is to own the technology relationships (and therefore the data) while leveraging external experts to help utilise the data and technology to its full potential.
The grunt work that follows the grand vision
Virtually every business starts with grandiose ambitions and can be seduced by the apparent benefits of in-housing. But it is unreasonable to expect a modest marketing department in a mid-sized business to fully own and execute a comprehensive digital operation. Even if a business has the desire and resources to develop technology partnerships and acquire ad technology, it will require a team of experts to implement, optimise and report on campaigns.
The number of full-time employees required to do this is growing rapidly. Gartner research revealed that from 2015 to 2018 marketing analytics teams doubled in size – making the costs of employing staff to solve these problems even more prohibitive.
Outsourcing the implementation function to an expert team is recommended for the best campaign results, HR management and staying ahead of the curve in terms of innovation.
Getting your media mix right
Businesses looking to achieve the best paid media results tend to do so by being audience focused and channel neutral. Using social, SEM, SEO, programmatic display, video and audio are all worthwhile options but they are not a strategy itself.
Simply putting your faith in Facebook or Google algorithms alone will not yield a business the results which it is capable of. Best practice comes by ensuring these channels run in conjunction and inform each other for every campaign.
Unless a business has the expertise and resources to run and optimise all these channels together with a single view, it’s better to have experts run them externally, all in one place with a single view that allows for real time data for regular optimisations.
Again, it’s wise to own the strategy, but consider leaving the day to day implementation to others. It’s also likely to be more cost effective.
The existential challenges of in-housing
The data revolution and the subsequent trend towards in-housing has had a significant effect on agencies as well as businesses.
Many agencies, once so reluctant to admit in-housing was happening at all, are turning a weakness into a strength and building business models to help clients take the leap. For businesses, in-housing functions means that they are going to see the results of their efforts, warts and all, with no agency pizzazz to soften the blow if things are sub-optimal.
As Bennett Rosenblatt, Uber’s programmatic tech lead said recently of these circumstances, “when things go wrong, you can’t just fire your agency, which is what brands usually do when they don’t like the performance”.
So remember, if you are a decision maker in a mid-sized business, taking back autonomy and freeing up resources also adds accountability.