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To In-House or Not? How Brands are Taking Back Control and How the Role of Agencies is Evolving

Tim Cross  23 October, 2018

Toccara BakerIn this sponsored editorial Toccara Baker, product marketing manager at Adobe, discusses the proliferation of advertising channels, the explosion of content and the shift towards data-based advertising strategies are redefining the relationship between brands and agencies.

Brands are at a crossroads — on the one hand digital technologies open up exciting opportunities for new ways to connect with consumers. On the other, they’re exposed to a number of risks as data-driven advertising comes bundled with concerns around consumer privacy and brand safety.

In response to these changes, brands are rethinking how they run their advertising operations, and about their relationships with agencies and third-party suppliers. It’s partly about introducing much-needed transparency into the value chain, whilst also enabling brands to take more control of their data. It’s no surprise that, according to a survey by Adobe last year, up to 62 percent of European brands are looking to take full ownership of their media buying by 2022.

A time of disruption

This is a pivotal moment for brands and all sides of the advertising supply chain. The number of digital touchpoints continues to grow, and there’s a huge amount of inventory available to advertisers across these channels. Meanwhile, the consumer’s expectations continue to rise. Just as digital gives marketers more choice about how they engage with consumers, it also gives consumers more power to engage with brands on their own terms.

In this context, data is more important than ever for marketing to meet those expectations in real-time, with a renewed focus on the buyer journey and how campaigns on each advertising channel need to be optimised in response. Then brands need to collect data from across channels and build new attribution models to understand and measure engagement. On top of that, they need to deal with large volumes of content to be managed, optimised, and delivered to a more diverse set of audiences. At times this can be overwhelming for even the most sophisticated of marketers.

Unifying all of this is where artificial intelligence comes in, to accelerate data collection and improve decision-making based on data. As data privacy controversies emerge and regulatory scrutiny increases, brands also have to consider how privacy needs to inform everything they do.

Taking back control

This is where the idea of control comes in. Brands are becoming aware that it’s important to take more control of their advertising operations so that they can:

1) combine data from across their organisations and make smart decisions with it;
2) better understand where emerging technologies like AI can add value;
3) understand what data is being collected—and how it’s being used—to help them handle it responsibly while building and sustaining the trust of their consumers.

In response, brands are starting to explore new operating models for their advertising. The picture is varied: A minority (about 18 percent according to a recent survey) have already moved their programmatic functions in-house, and plan to continue in this path. A considerably larger group (47 percent) are adopting hybrid models whereby they are partially taking these functions in-house. Many are still exploring their options and remain undecided about how to move forward. About one-fifth have no plans to in-house at all.

In this context agencies are considering how they must evolve their businesses and the outlook is promising for agencies who are sharpening their capabilities around consultancy and creativity. Indeed, many are able to be better paid for these capabilities and for the depth of experience they bring to the table. Brands also need to partner with agencies to keep up with best practice and stay on top of trends in an ever-changing market environment. So, far from playing a diminished role, agencies are reevaluating where their core strengths lie and reaping new value from them.

How will this shift towards taking control of advertising operations affect brands? Greater ownership of data will mean fuller ownership of technology contracts and deployments, increased transparency into costs along the advertising value chain, and a growing onus on brands to set clearer roles and responsibilities between themselves and their suppliers. It also means greater responsibility for brands to define success—and drive business results—based on data, and with that the need to ensure they have safeguards in place to responsibly unlock the power of data, in order to build and sustain consumer trust.

Regardless of how things shape up, the future points towards a model which places advertiser needs at the centre of the value chain. This is in turn reflective of the reality that consumer needs—the need for brands to stay relevant with consumers, in a relationship founded on trust—are themselves at the centre of everything brands do. On this basis, all players to embrace this evolution as a win-win.

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