In-house Marketing, Agency and Hybrid Models - One size does not fit all

As we near the end of the year, many businesses will already be looking ahead to Half Two, Financial Year 2025 and setting priorities for Financial Year 2026. For business leaders, a crucial question often arises in strategic discussions: “Do we have the right team structure to drive success over the next 6 months and the next 2-3 years?” But when considering whether to build in-house teams, rely on an agency, or choose a hybrid approach, it’s essential to look beyond the cost of resources alone. If the decision is purely cost based, it may be the wrong approach. Instead, the key questions should be: Will the model deliver increased customer acquisition and revenue for my company? Will it improve the efficacy of my marketing channels? Will the customer experience be improved? In essence, does the upside more than justify the investment?

It’s important to note that this isn’t a conversation just about media agencies; it’s a point of view encompassing all types of agency services that support a company’s marketing function. From creative agencies and digital performance specialists to data analytics providers, PR, and MarTech support, each type of agency brings unique strengths and considerations into play. Businesses must therefore evaluate these models based on the specific needs of their entire marketing function.

In this article, I’ll explore the pros and cons of in-house marketing and media functions, full agency models, and hybrid approaches. Having built and worked with all three, I can confidently say that one size does not fit all.

AGENCY MODEL

Agencies offer a unique advantage by continuously innovating and keeping pace with the latest industry trends, tools, and partnerships. Their role as industry connectors allows them to adopt and deploy new strategies faster, providing clients with a distinct competitive edge. Agencies are skilled at “filtering the noise,” allowing businesses to focus only on trends that directly impact their goals.

Increased costs and SLA considerations

Increased costs can arise from multiple changes; however, if companies know they’ll be charged when changes continually breach the service level agreements (SLAs), there will be greater consideration before initiating such changes.

Specialised agency services often come with a higher price tag than in-house teams, especially when comparing on a per-day rate or project basis. However, with effective support from the business, agency teams can typically ramp up faster, delivering a quicker return on investment. Additionally, agencies bring the advantage of experience from working with a diverse client base, which often translates to fewer errors and faster learning curves. This cumulative expertise can lead to better outcomes and efficiencies, providing significant value for the cost. 

Specialised expertise over full-service solutions

A full-service agency isn’t always the best approach, as specialisation can offer significant advantages. Some agencies excel at trading and negotiating above-the-line media, while others are exceptional at digital performance. This specialisation provides access to highly experienced professionals that can drive stronger results for businesses, as opposed to an agency attempting to cover all areas with a broad approach.

Buying power and media partnerships

Agencies frequently achieve superior rate positions and media entitlements through consortium buying power and exposure to a diverse client base. Their longstanding relationships with media partners also enable advantageous pricing that may not be accessible to individual companies. This scale and network leverage help clients benefit from opportunities that may be challenging to achieve independently.

Efficient resource allocation

The agency model provides access to specialised resources through fractional support, which can be more effective than a fully dedicated, in-house team. As an example rather than employing two full-time equivalents (FTEs) solely for above-the-line media and campaign management, a company might benefit from 1.5 FTEs focused on this area, with an additional 0.5 FTE dedicated to digital innovations, reporting, or creative best practices. This flexible approach allows for an integrated, cross-channel strategy that maximises impact.

Flexible financial models

Agencies can offer alternative financial structures like utilisation based or spend based models, rather than fixed retainers. This flexibility allows companies to manage agency costs according to actual needs, often making expenses more manageable and scalable. Important to note fixed retainers can also work, depending on the needs of the business. 

Prioritisation and client focus

In larger agencies, however, smaller clients may sometimes find themselves competing with higher priority, bigger spending accounts. This can be a reason why some independent agencies are gaining even more traction of late, as they can provide more focused attention and prioritise clients’ needs.

Operational stability and contingency support

Agencies bring a built-in stability advantage. If a team member leaves, the agency can absorb the disruption, maintaining continuity without impacting client operations. In contrast, an in-house vacancy can stall projects until a replacement is hired. Agencies are also accustomed to handling tight deadlines, high volumes of requests, and complex client briefs, ensuring they deliver quickly and efficiently, especially for clients with fluctuating needs or last minute demands.

In summary, the agency model offers substantial value through specialised expertise, flexible resources, and media leverage, which may be hard to replicate in-house or in a hybrid setup.

IN-HOUSE MODEL

Deep brand and customer knowledge for focused strategies

In-house marketing teams offer unique advantages, primarily centred around brand immersion and control. Team members within the organisation develop a deep understanding of the brand, its values, its goals and most importantly know their customer more than external vendors ever will. This internal knowledge enables the creation of relevant and effective marketing strategies that align closely with the business’s vision. Every media company I’ve collaborated with values the direct connection to clients as an irreplaceable asset. 

Direct communication enables agility

A key benefit of in-house teams is the direct line of communication with decision makers, which allows for swift responses and real-time adjustments to strategies. This agility, combined with team collaboration across departments, promotes a cohesive approach that’s sometimes harder to achieve with external partners.

Resource gaps and the need for succession planning

In-house teams can face significant resource management challenges, especially during employee absences due to resignations or holidays. These gaps may require businesses to either bring on agencies for interim support or risk seeing essential functions slow down or pause altogether. While agencies can provide a solution, effective succession planning is a critical tool that business leaders should have to prepare for these situations and ensure continuity.

Frequent change requests and their impact on strategic focus

Frequent requests internally for updates to creative or campaign elements can quickly strain in-house resources, limiting the team’s ability to focus on strategic or best practice initiatives. It’s important to maintain transparency with other team units and members about the impact of their requests to encourage better planning and preparation across the business.

Implementing SLAs to maintain workflow and productivity

To streamline workflows and prioritise high-impact projects, implementing strict internal SLAs (Service Level Agreements) can be highly effective. Drawing from my experience, SLAs have proven invaluable at various stages of my career, helping to maintain team focus and productivity while freeing up time for other agile, last-minute tactical needs.

Balancing data access  and morale and succession Planning

In-house teams gain valuable access to business data for performance insights, yet limited resources can pose challenges. Lean structures may lead to inefficiencies under heavy workloads and offer fewer opportunities for employee growth, impacting morale and making succession planning difficult. This can ultimately affect talent retention and long term team stability.

Balancing strategic and tactical roles

Another common challenge lies in balancing the roles of “doers” and “thinkers.” Ideally, team members would have both strategic and tactical capabilities, but this isn’t always feasible. Hiring for in-house roles often requires finding individuals who can lead strategic initiatives while handling day-to-day execution, which can be an ongoing challenge.

Overall, while the in-house model provides substantial benefits in brand and customer alignment and efficient communication, it also brings challenges in resource allocation, career progression, and balancing strategic and tactical demands.

HYBRID MODEL

The hybrid model combines the strengths of both in-house and agency approaches, creating a flexible and adaptive structure that can cater to diverse business needs. When executed effectively, the hybrid model allows companies to leverage in-house teams' agility and brand immersion while also benefiting from the expertise and resources of external agencies.

Scalability and resource optimisation

A significant advantage of the hybrid model is its ability to scale resources. Businesses can maintain core functions in-house while tapping into agency support for specialised tasks, such as media channel specific creative development, media buying, or data analysis. This allows companies to remain responsive and agile while still benefiting from industry innovations that agencies bring to the table.

Data and insight sharing for cohesive campaigns

Another key benefit of the hybrid model is the synergy of shared insights and data. With an in-house team intimately familiar with the business's unique needs, companies ensure external agencies gain the context necessary to deliver impactful strategies. Likewise, agencies contribute specialised insights, enhancing the team's understanding and leading to more informed and targeted deliverables. This collaborative approach fosters cohesive campaigns and drives better overall results.

Importance of alignment and communication

Effective communication and collaboration between in-house teams and agencies are essential for success in this model. Both parties must align on objectives, expectations, and metrics for success to maximise the value derived from each structure. Establishing clear processes and regular touchpoints can help mitigate potential misalignments and ensure everyone is working toward the same goals.

Powerhouse team with specialised expertise  

A powerhouse team that combines deep expertise in media and marketing with in-house knowledge of the business's unique nuances can drive exceptional outcomes. By blending the specialised skills of media and marketing experts with an in-house team’s intimate understanding of the brand, companies can ensure that media partners deliver maximum value while staying aligned with business goals. This partnership, supported by the agency’s extensive experience, is akin to having a world-class 100m sprinter with the best coaches refining every detail to reach record-breaking performance.

Cost considerations for smaller companies

However, cost can be a limiting factor in the hybrid model. For smaller companies, it’s often not feasible to fully resource both an in-house team and an agency. When possible, a well-managed hybrid approach can bring the best of both worlds, but companies should consider budgetary constraints and weigh the benefits accordingly.

Ultimately, the hybrid model provides a versatile framework that can adapt to varying business demands, allowing companies to maximise their marketing potential without being confined to a single approach. By effectively integrating the strengths of in-house teams and agencies, businesses can create a dynamic marketing strategy that drives growth and fosters long-term success.

CONCLUSION: CHOOSING THE RIGHT FIT

Each model offers unique benefits and challenges, and the right choice depends on the company’s size, goals, budget, and priorities. An in-house team can foster brand loyalty and agility, while agencies bring a broader industry perspective and specialised resources. Meanwhile, the hybrid model can provide a balanced approach if managed effectively.

There’s no one-size-fits-all solution. Instead, the ideal setup is one that aligns with the business’s unique needs, growth targets, and team capabilities. For companies re-evaluating their structure, it’s worth assessing each option to ensure it aligns with both immediate objectives and long-term goals. Companies can go through all three phases multiple times over their lifecycle, as the model to choose can depend on evolving needs.

I’ve intentionally not referenced which model delivers improved customer acquisition, increased revenue, reduced cost of sale and improved customer experience.  Again, one size does not fit all.  However, let’s chat!