The In-House Advertising Agency Model Explained
There are many different types of advertising agencies, including Above-The-Line (ABL), Through-The-Line (TTL), Below-The-Line (BTL), digital, financial, and healthcare. Then there's the in-house agency, which can be a mix of several of those or something completely different in its own right.
Some agencies actually get their start as an in-house department, and through effort, great work, and award shows, it becomes an agency in its own right. A famous example of this is The Integer Group in Colorado, which started out as an in-house agency for Coors, but quickly graduated to do work for other clients including Starbucks, Acuvue, Victory Motorcycles, and Polaris.
An in-house advertising agency is usually owned and operated by its one and only client: the company doing the advertising. Instead of this company outsourcing its advertising to an agency (or these days, several agencies with different disciplines), its ad campaigns are often handled by its own in-house agency. Some advertising may still be directed to outside agencies, but usually on a per-project basis. Or, in-house agencies will handle one area of communication, while external agencies handle the others.
How In-House Agency Operates
There is little structural difference between an in-house agency and a traditional agency that has multiple clients. In-house agencies have their own creative directors, art directors, copywriters, production experts, media buyers, account executives, and every other role you'd expect to see in an agency.
However, there are big differences when it comes to the actual work being produced, approval processes, hours, and workloads. For example:
- In-house agencies work for only one client; their employer. Everything they do, from websites and guerrilla to TV and direct mail, is all for that one brand.
- In-house agencies don't have to pitch for new business. They are given all the work they need from the company that owns them.
- In-house agency employees have much better hours than agency employees. There is no grind, very few late nights and weekends, and the atmosphere is less hustle, and more nine-to-five.
- In-house agencies have fewer approval processes to go through. There is no middleman, as with an agency. Campaigns are developed hand-in-hand with the people who will ultimately approve the project, so this cuts down on wasted time and miscommunication.
- In-house agency employees are often paid more than their agency counterparts. Working in-house is seen as less prestigious than working at an agency, and many people do not relish the idea of working on only one product, day in, day out. So, the compensation is higher.
- In-house agency employees usually get much better benefits packages, as they are backed by larger corporations with much more purchasing power. This, combined with the hours and salary, is often referred to as "golden handcuffs." Once you go client-side, it's hard to go back to the tougher agency world that has more hours and less money.
In-House Agencies Are on the Rise
Corporations around the world see the many advantages of an in-house agency. Ad agencies charge a lot of money for projects, and they also charge overtime. They don't know the product or service as well as the in-house staff, and they are split between many different clients. Chipotle famously dumped agencies in 2010, and the work of their in-house team has since won many awards.
With an in-house agency, the client is getting 100% dedication, no overtime or rush charges, subject matter experts, and employees who directly benefit from the company doing well. It's cheaper, it's faster, and these days, it's way easier to get very talented people to come client side. Companies like Apple and Google are attracting big names from advertising. The stigma that was once attached to "selling out" and promoting only one brand has almost gone. After all, why work for an agency that hires and fires based on the clients it wins or loses when you can have the stability, and financial support of a company that wants you to succeed?
Addressing The In-House Agency Stigma
There is definitely an "us vs. them" attitude when it comes to traditional ad agencies, and in-house agencies. One could easily equate this to the difference between the major and minor leagues in baseball. Those who work in agencies believe that in-house agencies are not pure. And, they will cite the following reasons for their dislike and beratement of the in-house model:
- You only work on one client, which pays your salary. Therefore, it's not a challenge.
- You don't have to pitch or work hard to get your accounts.
- You work regular 9-5 hours. That's not really advertising.
- You don't do good work. It's mostly mediocre.
- You can only attract low-grade talent. The real professionals work in traditional shops.
Once, some of those statements were true across the board. But times have definitely changed, and the in-house agency, as cited above, is on the rise. In fact, some of the biggest names in advertising have gone from agency-side to client-side, choosing to work for companies like Apple, Google, Target, and Microsoft. Why the change? Well, here are some of the many positives:
- There's a great work-life balance. Who wants to work 18 hours a day?
- You are working to promote your own products and services.
- Your campaign success equates directly to your company's success.
- You don't have to keep pitching. You have the work and can focus on it.
- You CAN do award-winning work, without the stress and heartache.
- You have a much faster approval process.
- You have much more influence on the campaigns being produced.
- Layoffs due to account losses are not something to worry about.
So, if you do work in-house, and get laughed at by ad-agency employees, refer to that list. And when they remove the chip from their shoulders, they will see that it's actually beneficial to work in-house, if you can find a good creative fit.
Famous In-House Advertising Agencies
There are many in-house advertising agencies in America, and around the world. Many are simply called "the creative department" in that corporation, but some have their own branding, name, and identity. Here are some of the biggest:
- Fidelity Communications & Advertising (Fidelity Investments)
- Content Factory (Coca-Cola)
- Yellow Tag Productions (Best Buy)
- Yellow Fan Studios (Sprint Communications)
- BBC Creative (BBC)
What was once considered to be the red-headed stepchild of the agency world is now very much legitimate. Go in-house, and you can still win awards and travel the world. But, you will still have enough time to see your family and live a relatively normal life.