Corona Virus Excels In-Housing

Major marketers have already begun to move more agency work in-house, stirring controversy around trust and whether internal teams can better handle the duties that third-parties have historically specialized in. As the coronavirus pandemic continues to muddy the industry, the in-house model's focus on cost and efficiency could see more interest even with growing business pressures.

78% of corporations have some form of in-house shop already and that number continues to climb. The beginning of the pandemic brought stagnation but in recent month’s companies have proven to be resilient as they continue to address the unknown. Reinvention instead of restructuring has taken the forefront and that is causing a huge uptick for the in-house movement. The Association of National Advertisers (ANA), an advertising trade publication, reports that not only are the number of in-house agencies growing, but they're taking on more significant marketing work.

The longer-term impact of this pandemic is even harder to forecast. If it follows business trends similar to the economic downturn of 2008, it’s safe to assume that work that would otherwise have been outsourced will be funneled in house. Even before the pandemic 70% percent of ANA marketers have, in the last three years, shifted work from third-party agencies to in-house teams, encompassing content marketing, digital, social media, and influencer marketing. The pandemic is now amplifying this need as companies look for cost-effective solutions with better implementation agility.

Taking on more internal responsibility is no easy task. Many in-house teams struggle to reach their full potential and secure the right funding to be successful. In increasingly critical areas of marketing like video, digital, social media, and analytics, 79% said that hiring more talent is necessary (source: In-House Agency Forum). Finding talent and retaining that talent has also been challenging, however, this is becoming easier with more people out of work and the ability to work remotely.

As the pandemic's economic impact becomes clearer, more businesses are expected to enact hiring freezes and other cost-cutting measures. This could result in important roles being filled with outsourced talent that are able to drive significant savings.

Ask Forrester's Principal Analyst Jay Pattisall, he believes that marketers and companies will not look to take on full-time employees in lieu of third-party service providers during the downturn. This is due to the cheaper cost of external services. Onboarding can require a heavy lift in HR, capital investments, and technology training. Companies will likely want to outsource to the extent that they can because it's a more cost-effective way to deal with it rather than making significant investments in employee infrastructure (source: Marketing Dive).

As companies finalize their 2021 budgets and reduce non-working spend, outsourced talent could be the immediate need you’re looking for. By hiring project-based solutions you can save up to 40-50% on your SG&A costs (administrative costs).

Here’s how you can determine if outsourced talent vs. internal staff is right for you:

  1. Are working and non-working budgets being reduced?

  2. Are you asked to drive more revenue with the same or less resource?

  3. Do you have the time to train and integrate new employees?

  4. Are you in need of reinvention over restructuring?

  5. Does agility matter?

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