Clients are taking media in-house because they understand their own business better: HCF marketer

Taking media in-house gives marketers greater control and transparency, HCF’s chief marketing officer Jenny Williams has said.

Jenny Williams, CMO at HCF

Speaking on the Ad Tech leadership panel in Sydney yesterday, Williams said the old media agency model of “here’s a few million dollars, go generate some leads” is “no longer fiscally responsible”, and in many cases, it’s better to have people in-house working for the brand.

“I would argue that the idea of bringing media in-house is about clients having control and transparency,” she said.

“What I struggle with is that I have people at a senior level in my business that think about my business seven days a week – well five, they get to take the weekend off.

“But these are people who may have come out of agency-side at a client director level, and they do nothing all day except figure out what our brand’s about, what that means for the business, how we optimise it, where our data sits, what they need to pull together, how they need to extrapolate that, what sort of econometric models they need to apply.

“We can’t get that level of focus on that problem – which is ‘How do I spend money in a smart effective way?’ – I cannot afford to buy that in an agency, or a consulting firm, because the purpose is about saving money. The purpose is about being more efficient about how I spend the money,” she said.

“That’s why we’re bringing it in-house, because we have the knowledge base internally that we can leverage. It doesn’t mean we don’t need the assistance of agencies, I just think it changes their role.”

Williams explained clients will increasingly be wanting to control where its money was placed by bringing planning in-house instead of handing budgets over to media agencies.

“The challenge is, why would I pay, not only what it costs them to earn money, but an agency margin on top of it? That’s the bottom line. Why would I not hire them myself instead of paying an agency margin?

“And at this point in time I can structure their remuneration such that what I want to achieve is what gets delivered and I can invite them to a meeting and not think they’re going to try to figure out how to up-sell. Those are the bottom-line facts about why it makes sense to have people in-house versus outsourced.”

This potential conflict between brands and agencies will also see more media agencies merging with their creative counterparts, eHarmony’s marketing director Nicole McInnes said, because brands no longer have time to balance in-house staff and numerous different agencies.

“The hard thing is for clients, as our businesses have got more complex, we’ve got less time, and so trying to brief two separate teams for everything and keep two separate teams abreast of everything that’s going on within your organisation, make sure that they’ve got access to the right data at any given time so they can do their jobs – it’s just too hard,” she said.

McInnes: Creative and media will merge

“We’re only really small and so I definitely don’t have time to have two or three agencies that I keep up to speed. So my thing is really about consolidation. I think we’re seeing it already. There’s quite a few agencies merging media and creative together and I think that trend will continue as the market becomes more competitive.”

Stuart Gurney, national head of strategy at media agency PHD, contended agencies actually see consultancies as their biggest threat, but this was dismissed by Williams.

“In some ways you could argue it’s no different. You’ve just got a different rate card in PwC versus a media agency,” said Williams.

McInness was in agreement: “I don’t think consultants will be that much of an issue”.

Gurney argued consultancies are “genuinely a huge threat”, but conceded the transparency issue was just as pressing for media agencies.

“As an industry we have failed in that transparency element and the thing that actually makes me encouraged in this area is the most common question we get asked in pitches is about transparency. So it’s obvious that the industry is waking up to that.”

Making it clear she was referring to groups other than PHD’s parent company Omnicom, Jo Gaines, APAC managing director for data management platform Krux, said media agencies needed to start justifying their models.

“There’s still an issue with transparency. Like, what technology do you own? What’s your kickback? What’s your mark-up? I think there is a place for being transparent and justifying why you are adding those mark-ups.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.