Build It, Buy It Or Both? Rethinking the Sourcing of Advertising Services

by Alvin J. Silk
 
 

Overview — The scale and scope of in-house advertising services is increasing. These developments are part and parcel of the restructuring of the advertising and marketing services industry more broadly. In this paper the authors provide guidance to senior managers considering bringing their internal and external agency resources together to arrive at a more collaborative operating model. Two case examples of successful internal/external agency collaboration are included.

Author Abstract

This paper provides an update on the current state of in-house agencies. Whereas traditional consideration of internalizing advertising services was framed as a binary choice of build or buy, today's advertisers frequently pursue hybrid policies of build and buy to procure the customized bundle required to develop, produce, and implement relevant, resonant promotional campaigns. Increasing numbers of advertisers are discovering that the demand for advertising and marketing services is best served through the coordination and integration of resources from both inside and outside the company, rather than assuming that these options are mutually exclusive. A review of advertising industry history reveals why internal agencies have long operated in the shadows of their external counterparts and how the former organization form has evolved over time. The core competencies underlying the contemporary in-house agency model are analyzed, and the competitive position that in-house agencies presently occupy in relation to external providers is assessed. Two case examples of successful internal/external agency collaboration are presented. Finally, recommendations are offered for advertisers seeking to bring their internal and external agency resources together and arrive at a more collaborative operating model for advertising services.

Paper Information