The Hybrid Agency Tango: Part 4

Excerpts from Henry Stewart Seminar with Vanessa Vollum Edwards

Welcome to Part 4 of the Hybrid Agency Tango! As a quick reminder, the 1st blog post focused on an introduction to the Hybrid Pyramid, with subsequent blogs covering the remainder of the Agency Led track (left side).  The Agency Led track highlighted more traditional and familiar relationship models between Brands and their Agency partners.  Now, it’s time to explore emerging models.  If you are just joining us, below is a visual representation of the Hybrid Agency Pyramid, and a brief description of the evolution of IHA from 1.0 to Hybrid.

• 1.0 focused on cost, speed, control and media unbundling
• 2.0 focused on multi-channel complexity, MarTech, data security and 360° analytics
• Hybrid focused on evolving beyond “Frenemies” into Alliance, Integration & Co-location

Kicking off the Brand Led Track

In this 4th blog, we will be kicking off the Brand Led track (right side) by focusing on the “Frenemy” tier and the Full-Service In-House Agency and Marketing Departments + Creative Studio models.  As a quick reminder, the foundation of the Hybrid Pyramid is this Frenemies tier.  The Frenemies level is NOT officially part of the Hybrid model; however, it is the foundation of Hybrid.  It’s a symbiotic, yet competitive relationship, where both parties need each other, while simultaneously pursuing their own vested interests.

Frenemy: Full-Service In-House Agency

To begin the Frenemy tier of the Brand Led track, let’s start with the Full-Service In-House Agency (often called IHA).  In this model, Brands have brought almost all of their work in-house and are only using agencies for small, special projects or as flex support for their in-house agency.

Recent trends have seen Brands hiring former agency leadership to lead these In-House Agencies, thus attracting big name talent and fostering credibility with internal stakeholders. This model allows Brands to have full marketing decision-making power and responsibility – however, it also means they have the additional burden of cost and overhead.  For Brands with higher marketing spends and less complex marketing needs, this can be an ideal model.

With the In-House Agency living and breathing the brand, they can more easily align the brand to the channels on day-to-day execution.  Being part of the Brand, the In-House Agency has easy access to stakeholders and can often turn work around more quickly.  In addition, these Brands have a holistic view into the Customer Journey and are able to better optimize using full circle analytics + reporting.

However, your channel strategy + execution is limited to the staff you have.  With the complexity in marketing these days, if you can only afford one person to manage digital, you won’t get experts in all your digital channels, and therefore may miss out on opportunities to effectively market and optimize.  In addition, I’ve seen talent get tired of working on the same brand day-in and day-out, and often get stuck in a rut, unwilling to push marketing boundaries or stay cutting edge.

GENERAL FRAMEWORK:

• BRAND owns Marketing Objectives + Insights
• IHA owns Research and Consumer Knowledge
• IHA owns Mar/Comm Strategy and Planning
• IHA owns Campaign Strategy and Planning
• IHA owns Creative Concepting through Creative Development
• IHA owns Channel Strategy and Execution
• IHA owns Analytics and Reporting
• AGENCY owns special projects or flex support

PROS:

• Deep knowledge of brand, consumer + regulatory
• Easier access to stakeholders + increased speed to market
• Easier to project manage integrated campaigns
• Decreased turnaround times + costs for creative development
• Brands gain full visibility into Customer Journey
• Access to full circle analytics + reporting for optimization
• At certain volume, less expensive than agency models

CONS:

• Channel strategy + execution is limited to staff you have
• More operationally complex to manage
• Lack of project prioritization and financial operations
• Talent gets tired of working on same brand day-in, day-out
• In-house team not pushing boundaries and/or not staying cutting-edge to marketing/channel trends

Frenemy: Marketing Departments + Creative Studio

Let’s move onto the other In-House Frenemy scenario, where you do not have an In-House Agency but rather multiple in-house departments, as well as a Creative Studio.  In this scenario, we tend to see marketing departments operating in silos, often working on their own channel initiatives, as well as integrated campaign work. In addition, each of these departments is serviced by a Creative Studio, tasked with the management and production of creative deliverables to be used by the marketing departments.

Similar to the In-House Agency, there is little need for external agencies, which are mostly used for special projects or flex support. This model is ideal for brands who prefer a “channel-first approach” and who have fewer integrated marketing campaigns, as it has most of the benefits of the In-House Agency model while being organizationally less complex to manage.  Additionally, this structure empowers each department to utilize channel best practices to reach their audiences, in a faster and more agile way.

Unfortunately, this channel-centric approach can come at the risk of prioritizing channel best practices (or metrics) over the brand messaging. In some cases, I’ve seen channel departments post content just to increase their channel metrics (that they’re being measured on!) rather than post content that drives the current, priority initiatives.

These competing interests can cause culture issues and friction across the marketing departments. In many cases, marketing departments’ budgets are misaligned with the annual marketing plan, which can result in some departments being over-funded and others being under-funded.

GENERAL FRAMEWORK:

• BRAND owns Marketing Objectives + Insights
• BRAND owns Research and Consumer Knowledge
• BRAND owns Mar/Comm Strategy and Planning
• BRAND owns Campaign Strategy and Planning
• STUDIO owns Creative Concepting through Creative Development
• MKTG sub-departments own Channel Strategy and Execution
• MKTG sub-departments own Analytics and Reporting
• AGENCY owns special projects or flex support

PROS:

• Less operationally-complex organizational structure
• Deep knowledge of brand, consumer + regulatory
• Easier access to stakeholders + increased speed to market
• Decreased turnaround times + costs for creative development
• Brands gain full visibility into Customer Journey
• Access to full circle analytics + reporting for optimization
• At certain volume, less expensive than agency models

CONS:

• Competing interests between Brand, Channels + Studio
• Difficult to ensure department staff + marketing budget alignment
• Lack of project prioritization and financial operations
• Talent gets tired of working on same brand day-in, day-out
• In-house team not pushing boundaries and/or not staying cutting-edge to marketing/channel trends

That’s a Wrap – For Now

Thank you for reading the 4th blog post in a larger series that focuses on the evolution from in-house to Hybrid!  The next blog post in the series will move from the foundation of the Brand Led track and will focus on Brand Led Alliance.  At the end of the series, we will be discussing the Hybrid Magic Quadrant, which should provide some practical orientation for where you are today and where you may want to be in the future.

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