Trend puts traditional advertising agencies at greater risk of disintermediation
Traditional agencies are being disintermediated as marketers increasingly turn inward for services, according to a new survey by the ANA (Association of National Advertisers). Fifty-eight percent of marketers currently utilize in-house agencies – a 16 percentage point increase from 2008.
More than half of marketers (52 percent) are assigning newer marketing functions – digital, social and mobile – to their in-house agency. Additionally, a majority of marketers (56 percent) have already moved established business from an external agency to an in-house one. Much of this shift is driven by internal expertise, greater cost efficiencies and quicker turnaround time.
In-house agencies represent departments, groups or individuals that have responsibilities typically performed by an external advertising or other agency – with the exception of public relations. This shift represents an important, growing trend, and reflects an economic environment that challenges corporations to do more with less.
“We are seeing a seismic, eminently important industry shift between marketers and agencies,” said Bob Liodice, president and CEO of the ANA. “The growth trajectory of advertising agencies is in question as marketers move existing and emerging functions in-house. The emergence of the in-house agency is a potential warning sign for agencies. We urge our agency peers to adapt to this new reality and offer even greater value to avoid gradual disintermediation with clients.”
Increased use of in-house agencies is the result of several intersecting factors:
o Internal Expertise & Focus – Marketers cited institutional knowledge (79 percent), a dedicated team (74 percent) and brand expertise (71 percent) as the biggest advantages of having an in-house agency, aside from cost. These three factors are cited as primary advantages by 41 percent of marketers.
o Cost – Cost efficiencies are cited by 88 percent of marketers as an advantage of in-house agencies. However, only 35 percent of marketers say cost is the primary advantage of having an in-house agency. This 21 percent drop from 2008, the last time the survey was conducted, is indicative of increased marketer interest in the value and expertise in-house agencies can offer.
o Speed – The advent of digital, social and mobile has placed a premium on turnaround time and speed. Seventy-one percent of respondents said quicker turnaround time is an advantage of in-house agencies.
Improved quality
The quality of in-house agencies appears to have improved substantially. Five years ago, 61 percent of marketers said lack of deep strategic thinking was a weakness of their in-house agency. Only 30 percent point to this as a disadvantage of their in-house agency now.
“‘Fast, cheap, good – pick two!’ Almost every marketer and agency executive has heard that quote,” said Bill Duggan, Group Executive Vice President of the ANA. “For years, in-house agencies were known as being fast and cheap, but not necessarily good. Now, many are good – in fact, very good!”
Perceptions of in-house agencies are shifting fundamentally, regardless of marketer size or spend. Fifty-six percent of marketers report that their external agencies perceive their in-house counterpart as partners, up from 41 percent in 2008. Accordingly, 71 percent of marketers now evaluate their in-house agencies with some frequency, as they would traditional external agencies.
The ANA conducted the In-House Agency Survey April-May 2013 with a follow-up wave in June and July. Of the 203 marketers that responded, 118 stated that their companies have an in-house agency.
Lawsuit Alleges That TikTok Was Aware Of Risks Its Platform Posed To Kids and Teens
TikTok was aware that its design features are detrimental to its young users and that publicly touted tools aimed at limiting kids' time on the site were largely ineffective, according to internal documents and communications exposed in a lawsuit filed by the state of Kentucky.
The details are among redacted portions of Kentucky's lawsuit that contains the internal communications and documents unearthed during a more than two year investigation into the company by various states across the country.
Kentucky's lawsuit was filed this week, alongside separate complaints brought forth by attorneys general in a dozen states as well as the District of Columbia. TikTok is also facing another lawsuit from the Department of Justice and is itself suing the Justice Department over a federal law that could ban it in the U.S. by mid-January.
The redacted information — which was inadvertently revealed by Kentucky's attorney general's office and first reported by Kentucky Public Radio — touches on a range of topics, most importantly the extent to which TikTok knew how much time young users were spending on the platform and how sincere it was when rolling out tools aimed at curbing excessive use.
Beyond TikTok use among minors, the complaint alleges the short-form video sharing app has prioritized "beautiful people" on its platform and has noted internally that some of the content-moderation metrics it has publicized are "largely misleading."
The unredacted complaint, which was seen by The Associated Press, was sealed by a Kentucky state judge on Wednesday after state officials filed an emergency motion to seal it.
When reached for comment, TikTok spokesperson Alex Haurek said: "It is highly irresponsible of the Associated Press to... Read More