In-house or external agency? How about neither?

In marketing and advertising, the only thing we know for certain is that things always change. And in today’s world where we’ve learned that everything can change on a moment’s notice, brands are starving for working models that allow them more control of their narrative and the content they create.

We know that traditional brand-agency relationships are limited. The growing trend of companies moving to in-house teams is proof of that. In August 2020, a Gartner spend survey of CMOs found that 32% of external agency work had shifted to in-house teams over the previous 12 months. But while in-housing can offer brands major benefits—like cost savings, faster speed to market and consistency over the brand narrative—purely in-house teams can lack elements of innovation and inspiration that the cross-pollination of diverse business categories and verticals affords agency creatives and marketers. Not to mention that adapting to the discomfort and inconvenience of quickly changing landscapes—something external agencies thrive on—may be difficult for brand teams.

The embedded partnership offers brands the best of both worlds. For some companies that have relied heavily on external agency partners, the embedded partnership allows them to quickly adapt to change while continuing to serve their audiences. For others, an embedded agency partnership serves as a hybrid first step toward full in-housing. And there are many, many brands we work with—large companies and startups alike—that maintain embedded agency staffers over the long term to help manage the ebbs and flows of marketing needs.

Enter the embedded partnership

In the embedded partnership model, brand and agency teams brainstorm together, edit each other’s work, talk daily and often sit in the same offices. The most common misconception about the embedded model, however, is that simply putting people together in the same space—either virtually or on site—is the solution. 'Embedded' means teams are involved in strategic conversations much further upstream than traditional agencies and openly collaborating on assignments to the point that ideas flow more naturally and decisions are made faster. Much more than a model, an embedded partnership is a mindset. This deep engagement, based on teamwork and mutual trust, yields results that exceed expectations, integrate fully with a brand’s existing infrastructure and align with the latest go-to-market strategies.

Keeping it fresh

Once thought appropriate only for content production needs, embedded agency engagements have expanded to cover end-to-end solutions spanning many areas: data, strategy, creative, production, platform development, optimisation and media, among others. And given the recent focus on privacy and preparing for a world without cookies, embedded digital marketing staff would be the ideal resource for managing a brand's first-party data.

Why are brands turning to embedded teams? Acquiring and energising creative talent has historically been a challenge for in-house agencies—a challenge that can intensify when budgets are tight but marketing needs necessitate new skill sets. Plus, there’s always the risk that wholly internal teams turn into echo chambers for internal assumptions and company speak or, even worse, become insulated from emerging trends. An independent contractor or boutique agency can serve as a means of outsourcing small tasks, but an embedded partner has immediate and greater access to talent and specialised skills, as well as external ties that can help introduce innovation. And given its proximity internally, the partner agency can become an extension of the company’s marketing team to seamlessly amplify the team’s power.

Staying nimble

One of the main drawbacks to fully in-housed teams is their limited ability to handle sudden increases of work or reduce costs during periods of lower demand. One of the key elements of the embedded model is that it provides flexibility in scale and skills sets available on demand as needs dictate. In large companies, for example, internal marketing teams can hum along until an unforeseen opportunity presents itself and a massive program needs to be executed—fast. Hiring full-time employees for a three- to six-month program is hard to justify, but so is signing on with an agency, even for minimum contracts, or hiring and then managing individual contractors. With the embedded model, a middle way emerges—a team of experts from a single agency can be brought in to leverage insights and execute quickly and smoothly.

Covering all the bases

Building and maintaining a full in-house team is not for the faint of heart. In-housing requires a major commitment of time and money that can be a difficult pill for an organisation to swallow—especially when striking the perfect balance between capacity and utilisation is nearly impossible in today’s changing marketing environment. In smaller companies like technology startups where most early resources are funneled to engineering and go-to-market timing is a moving target, there may not be the right staff on hand to handle the next phase of growth. But hiring quality employees takes time, and bringing in a full-on agency is costly and time-consuming. With the embedded model, interim senior marketers with the support of a full agency behind them can be quickly enlisted to execute everything from consumer tests to full marketing programs, without a major long-term commitment. This flexibility provides for support in tackling everything from operational problems to pilot testing new ideas and products to full go-to-market strategies—with companies only expending associated costs, rather than ramping overhead.

The many flavors of the embedded model

At its core, the embedded approach blends internal and agency teams working side by side with full transparency and higher accountability. That said, for as many different companies as there are in this world, there are likely just as many different embedded combinations possible. Personnel models span fully embedded models with agency individuals and teams on site, hybrid models with some combination of on-site and off-site support, and fully off-site models supported by local or remote staff. And financial models can retainer-based, based on time and materials, based on projects or workstreams, or a combination.

To best determine whether an embedded partnership is right for your organisation, you must consider short-term needs and long-term goals, and then evaluate your capabilities to determine where (and potentially when) you’d need to shore up resources. To put you in the partnership mindset, here are just a few areas where an embedded agency model can help:

• Consultancy to handle strategic work or restructuring, such as developing new operating models or in-house studios
• Plug-and-play project support with individuals or teams delivering part of a project or dropping into an existing workflow on a project
• Ongoing workstreams with dedicated individuals or teams for everything from onboarding to in-market delivery
• End-to-end teams and solutions working as an extension of your team to absorb a higher volume of work for an extended period.

Bridging the gap

As brands search for a model that provides them more control, a key challenge many of them face is insufficient resources to meet their fullest potential—whether it’s the need for all hands on deck to produce always-on content, or specialised skill sets for quick and one-off projects. The embedded model is what allows brands to bridge the time, skills and needs gap to deliver results in an always-on world with speed, quality and value. In its purest sense, the embedded model boils down to true partnership—a relationship based on shared goals, teamwork and trust. And at the end of the day, relationships are what make the difference.

Melanie Sweet is APAC vice president of marketing strategy at MediaMonks.