Work doesn’t stop when you go on holidays. I remember nursing a glass of Pinot Grigio on the back deck of a holiday home in Aireys Inlet when Treasury Wine Estates confirmed it was going to create an in-house agency covering creative and digital media buying.

It was early 2022, and at the time I was a Digital Marketing Manager, the classic jack of all trades, master of none role. I was asked if I would be interested in taking on the more defined, yet to be filled job of building and running the digital media team.

My experience with Meta, search and retail media (partly) qualified me for such an offer, albeit my programmatic knowledge required, shall we say, upskilling.

So, I set about upskilling. Over the following months I read every book I could find, spoke to every smart person I could speak to, and eventually hired a gun programmatic lead who taught me 90 per cent of what I know.

Nearly 18 months on, we’re a digital media team of four, running everything from CTV to dynamic podcast insertions to pOOH. I even know the difference between a PG and a PMP.

From slow burn to catching fire

In 2016, the Association of National Advertisers in the US reported 14 per cent of brands had reduced the role of external agencies. In 2017, that number was 35 per cent.

The following year the IAB reported 47 per cent of brands had moved to a hybrid programmatic model. Nearly 20 per cent had moved all programmatic buying functions in-house.

The hype around in-housing prompted many demand side platforms (DSPs) – the tool allowing brands and agencies buy programmatic ads – to start pitching their services to brands directly, losing site of the fact the vast majority of media dollars were (and still are) running through agency desks.

The Trade Desk was one DSP to remain focussed on agencies – one of the reasons cited by CEO Jeff Green as driving the company’s extraordinary financial performance and share price gains.

Curiously, some agencies are now accusing The Trade Desk of cosying up to brands as in-housing gathers steam.

The local view

In Australia, in-housing has been getting a lot of industry press – most recently in March as the In-House Agency Council (IHAC) released the first ever study into the in-house media industry.

Surveying 24 brands spending $1m-$100m in media, it found 90 per cent were running a hybrid model. Social (96 per cent), video, search & display (80 per cent) were the most common activities being completed by in-house teams.

Key benefits for bringing media in house included increased effectiveness, improved efficiency, improved agility/speed to market and ownership of data. Brands rated their experience with in-house media teams as superior to external agencies on nine out of 11 factors.

It’s a great advertisement for in-housing, but there are dissenters – most notably agencies.

Critics say such self-reported surveys are dubious. It’s an old gag, but a goodie: “government survey finds government doing great job”. What brand would mark themselves down after such an investment?

It’s a very fair point. Brands should seek third party validation to prove claimed benefits. But the criticism misses the point: perception is reality. Many brands felt – and continue to feel – that agencies are not meeting their needs and have decided in-housing is the better solution.

A year after going through the process at Treasury Wine Estates, I’ll attempt to honestly appraise the pros and cons on the media side, alongside some key learnings.

Pros

• Speed: We turned around a search campaign in less than two days after briefing. Tell me an agency that can do that, and I’ll call you a liar. Being able to walk 5m and sense check a tactic with a brand manager is also invaluable.
• Access: It’s the difference between logging into your DSP versus writing an email to your agency lead. Hybrid models exist, but nothing beats owning the relationship directly.
• Ownership: Where brands are reporting greater effectiveness, it may be driven by the “Ownership Effect”: Coined in 2017, the term came out of a UK study that showed employees who ‘own’ part of their employer are more engaged and productive. Extend this to media, and brands who have more control are more likely to be engaged and productive, ostensibly leading to better media outcomes. “No one cares about this more than we do” is the common refrain.

Cons

• Buying power: Brands spend less money than (most) agencies. This gives agencies economies of scale to leverage better deals across publishers and media owners. In theory, whatever you spend on agency retainers should be dwarfed by the savings you unlock by accessing a larger pool of funds. Some in-house teams pay a fee to access agency trading seats to get the best of both worlds: full ownership at agency prices. If you’re a brand that changes budgets several times a year, forget about negotiating directly with publishers on upfront commitments.
• Efficiency gains: I’ve heard some brands anecdotally claiming incredible CPM reductions after bringing media in-house. While we’ve seen falls in CPMs across social and CTV, I would attribute this mostly to placement and audience targeting changes. In short: don’t expect your efficiency metrics to fall just because you’re doing it yourself. And besides, CPMs in isolation are a shit metric for success.
• Tech: Adtech costs money. Agencies can spread these costs across clients. Brands can’t. For every piece of new tech, you need to ensure any loss of working dollars is offset by greater efficiency or effectiveness. Plus, you need to know how it all fits together in the most efficient way, or it’s just putting the proverbial lipstick on a pig.

Learnings

• Budget: Do you have at least $1m to spend on programmatic? If not, I’d strongly reconsider in-housing that function. Many DSPs require upfront commitments, and the cost of the tech may erode your working dollars.
• Start small, then scale: Don’t do everything at once. Start with an MVP setup, then scale your channels and tech stack.
• Diminishing returns: The benefits of in-housing eventually reach a point of diminishing returns. For some brands, full in-housing makes sense. For others, the benefits stop at social. Try to understand what your end game looks like and phase how you reach it.
• Recruitment: Whatever timescale you have for recruiting, double it. And forget about hiring unicorns who can run programmatic, social, search, retail. Instead, find subject matter experts and train them in other disciplines.
• Media Principles: One of the best pieces of work we did with our agency partner Lution was creating a set of Media Principles to codify our media decisions. All media strategies now must align to the principles: from audience targeting to flighting, investment levels, channel selection, etc. It’s an important piece of work that all brands should do, not just those considering in-housing, but the move to in-housing make such work vital especially in hybrid models where agency and brand are sharing tactical duties.
• Processes: Important to get this right. From media plan templates to QA documentation, PO tracking and PCAs. This took us the better part of six months, and we are still making tweaks.
• Cost savings: Usually the first reason given for in-housing, but not always a given – even on the creative side. Joanna Duncan, former CMO of Insight Vacations, told me her overall costs of in-housing were actually higher than an agency, but the ROI was “acceptable due to the improved quality of work and greater volume of work”. In other words: don’t make cost savings the central tenet of in-housing: it must be part of a broader suite of reasons.
• Get a second, and third, opinion: Media, especially programmatic, is a complex ecosystem, and experts don’t often agree. Make sure you’re getting a wide range of opinions, then make up your own mind.
• It’s not that confusing: Take the time to understand programmatic. It looks magical and scary on first and second glance, but it’s not. The fundamentals are the same as any other marketplace: supply and demand. And, in Australia at least, it’s largely relationship based.
• Overlay broader marketing principles: Never lose sight that all this tech, media and people are meant to be driving towards a brand objective. If it’s not doing that, you’re wasting your time.