In House Ad Agencies. The Corporate Echo-Chamber?

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See what Under Armour’s CEO Thinks

I’ve written before about in-house ad agencies. In a previous post, I suggested that companies who have in-house creative and/or media departments are akin to someone giving themselves a haircut. It’s generally a bad idea.

My colleague here at Gillespie, Jim Krauss, came across this article about Under Armour. The founder of this multi-billion dollar sportswear empire agrees

It’s nice to know I’m not shouting at the rain.

CEO Kevin Plank says, “Outside agencies, by comparison, give UA a ‘broader view of how we see the world and how the world sees us.’”

This is a critical point and one of the biggest advantages of the outside agency. Our colleagues include bright and adept people who can quickly submerge themselves in a business or industry while maintaining an understanding of how the everyday person works, thinks, feels, acts, lives, etc.

But perspective isn’t the only thing agencies bring to the table. We bring technical experience. The complexity curve for advertising slopes as steeply as any technology curve. It some ways, it is the same curve!

Why would a company that provides healthcare services or sells cars invest in the staff, infrastructure and learning that is already available through an ad agency? Let alone the software and hardware necessary to do the job competently. It is a tempting prospect for advertisers because they feel that they can save on agency commissions and fees. But at what real cost?

In reality the cost to an in-house agency is extraordinary and unnecessary. The cost of research, software and talent (for an in-house agency) cannot be shared over multiple clients. And without expertise and experience, in-house agencies may miss opportunities, make costly mistakes and lag far behind on the advertising curve.

Mr. Plank has it right “advertising

The Gillespie Group