How to make the most of internal and external digital skills

As advertisers, especially retailers, allocate a larger share of their ad spend to digital channels, many are wondering how they can best access the skills and resources they need to execute their campaigns: should they build their own in-house digital teams or continue to outsource most of the work to agencies?

Grant Lapping, digital manager at +OneX

As Ewoudt Cloete, Senior Director of Digital Operations at Game, argues in a recent article, a hybrid approach is likely to be the best choice for most brands. I agree with his view that in-house and agency resources both have a valuable role to play, and wanted to explain how brands can get the best of both worlds.

Let’s start by looking at why a brand would want to work with an agency, which comes down to their deep specialization in digital marketing and technology. A brand could hire an in-house campaign manager for less than it could pay in agency fees each month. However, they are unlikely to operate at the same level as an agency team that offers decades of combined digital marketing experience.

Additionally, there is significant risk in hiring a small team or even a single person to oversee the brand’s digital strategy. If a key person leaves or even takes a vacation, it could derail the company’s campaigns. Agencies have larger teams and therefore are not dependent on one person to keep things running smoothly.

Benefiting from a mix of skills

An agency team typically includes technical professionals, strategic thinkers and campaign managers, providing deep expertise that few companies can afford to develop in-house. Because digital is their only business, they are immersed in the latest trends and best practices in the digital landscape. As they learn new tactics, they have the opportunity to test and apply them to multiple clients and continually optimize the results.

This gives an agency’s specialists a slight advantage over internal resources, as they learn every day due to greater exposure of digital results to their entire client portfolio. An underutilized internal resource, on the other hand, may struggle to keep up with the latest trends, platforms, and tactics in a rapidly changing market. Additionally, agencies can spread the costs of hiring expensive resources across multiple clients, especially technical talent needed for occasional or one-time needs.

Without the economies of scale of an agency, brands may find it prohibitively expensive to hire in-house skills in areas such as data management, integration, application programming interfaces, attribution modeling , offline conversion tracking and automated reporting. With an agency, they can pay for skills when they are needed rather than paying high salaries to in-house resources.

Digital agencies often enjoy better rates for premium media sponsorship packages or private market deals because they have higher collective spend on digital media channels. This allows them to pass on cheaper rates than a brand can get by going direct. Agencies also often have better support from digital platforms depending on their certification and spending levels with the larger platforms.

The role of the internal team

On the other hand, agencies won’t have the same view of the inner workings of a business and its broader marketing strategy because they’re so focused on digital capabilities. Only someone who works with the product line daily will know when to curb the marketing of low inventory items and when to launch promotions to maintain the momentum of a flagship product, for example.

And an agency will never understand the brand or how the different divisions of the company work together as well as an internal resource. Another key consideration in a world where first-party data is critical to marketing success and subject to stricter data privacy regulations is who owns and controls the data. Monitoring of this important resource should be maintained internally.

Considering these pros and cons of in-house and outsourced digital resources, it’s clear that they complement each other. Internal resources can oversee day-to-day digital requirements, while agency subject matter experts and campaign managers fill in gaps in their technical and digital strategy capabilities. An ideal combination is to have an in-house digital expert supporting business strategy, working in partnership with a digital agency strategist who oversees digital strategy. If these two people can work well together, a brand has a winning formula.

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