Brands Wrest Back Control Of Data With 'In-Housing' Trend

It's been a time of great ferment in the advertising business. New marketing approaches, direct consumer relationships, and shifting business models are pushing more companies to exert control over one of their most precious resources: the data around their brands.

It's fueled a relatively new trend, "in-housing." As the name suggests, brands are bringing their marketing data directly in house, rather than leaving it tucked away in some corner of their traditional advertising agency, where it may be difficult to fully actualize all the insights that data can provide.

To help build internal expertise, brands are relying on a new class of consulting firms to help them grab direct control of their data, analytics and related services. With in-housing, a brand can know far more about its entire stack of marketing and advertising across digital and older platforms, and draw insights that affect much more than just its marketing.

No surprise, then, that in-housing is popping up everywhere lately.

Former long-time WPP head Sir Martin Sorrell now has his own tradition-busting shop, S4, which recently bought in-housing agency MightyHive as part of a broader roll-up strategy.

Last summer, two complimentary agencies that have long operated in different quadrants of the Google ad ecosystem, Analytics Pros and Adswerve, merged to provide a more complete package of search, analytics, data and other services.

Adswerve just announced that it had picked up a key certification from Google Cloud for setting up data-analytics packages with more than 200 brands and agencies. The packages bring together "user behavior data from Google Analytics, as well as data from ads, social, CRM, email and other touchpoints," the company said. 

MightyHive, Adswerve and Jellyfish are all in-housing specialists helping disrupt the industry's long-time centralization in traditional ad agencies, said Ryan McConville, President and COO at Kargo, which specializes in data and creative for mobile screens.

“Adswerve's value proposition coincides with the tech-consolidation theme," said Craig Rosenberg, co-founder & Chief Analyst of Topo, which advises companies such as Twilio, LinkedIn, and Google on ad trends. "One of the vital aspects it helps solve is consistency around metrics and analytics. The broader story of getting more from one agency or vendor applies too, such as the reasoning for marketing clouds."

Adswerve also received a Partner Platform Award at a recent Google developer conference for its work with the World Surf League, a digital-first operation that streams surfing competitions around the world. The league has been notable for its innovative use of data and new distribution platforms to build audiences and revenue.

Because of the vagaries of grabbing a good wave, the league schedules surfing competitions in two-week windows. It then streams both live and on-demand video of the resulting runs by surfers to whatever device viewers might be using.

In-housing allowed the league to focus its ad spend and other marketing on higher-revenue customers, increasing live viewership by 30 percent and reducing by more than half the cost per conversion of those customers, a key metric.

As powerful and promising as in-housing is, it's still not a simple process, said Alan Rosen, Adswerve's Chief of Cloud.

It takes a lot of time and effort to get a brand wired into all the different sources of data they already can access, in a way that can be more powerful, Rosen said. The data typically comes from a range of sources, may be structured in many different ways, and in some cases may not be reliable.

"The first challenge that’s always hard is getting people to realize it takes time to get good data," said Rosen. "With the WSL, we spent a lot of time making sure that they trusted it. We did all sorts of deep analysis to prove the numbers were accurate. Once they were able to trust it, they could really go."

And that speaks to the mental challenge for a company taking the in-housing route. The company has to be willing to do the work to build that internal expertise, structure and trust. If that buy-in is present, the results can be transformative, Rosen said.

At the most sophisticated level, a brand can use the data to do propensity analysis, basically predicting the behavior of market segments to better anticipate where best to spend money and other resources, Rosen said.

"You can take all this  data, know who they are, and activate that in lots of different ways," Rosen said.

A lot of brands know they need intimate and immediate access to their marketing data, said Topo's Rosenberg. But they lack the capability to actually do more with it. A key part of in-housing consultant services involves training the client's staff to better leverage that information when making business decisions. 

"Marketers today expect to be data-driven, yet many don't have access to the data and reporting required to make this change," said Rosenberg. "Measurement and attribution is a top area of investment for marketers, and both technology vendors and service providers are responding to market demands with more sophisticated data, reporting and analytics solutions."

Adswerve recently worked with the YMCA of San Francisco in a project that now is saving the non-profit $2 million a year in operational costs. It relies on a Google Cloud-based data warehouse that brings together information from its fitness centers, daycare and after-school programs, seasonal and weekend camps, swim lessons, and other activities.

The data-warehouse technology sifts through various sources, automatically builds potential market segments, and allows the YMCA to A-B test how best to reach those segments in personalized ways that are more likely to resonate, and convert to paying customers.

The future of data-driven marketing is hugely promising, though tightened privacy regulations in the European Union and elsewhere will complicate what can be done, said Adswerve Data Scientist Luka Cempre. 

"We're just trying to find the next thing," Cempre said. "We want to do everything quicker and faster. Predictions are now done in a day, but now, we know some dimensions already. We can do more. Webpage personalizations, maybe they'll happen in real time. (But) some of the things that were possible in the past are becoming less possible because of (the EU's) GDPR." 

In-housing isn't the only big trend reshaping traditional advertising agencies. Many agencies of record are finding their long-standing brand relationships under review, or simply tossed out.

And big consulting firms are snapping up marketing, creative and digital agencies seemingly left and right. The biggest recent deal was Accenture's acquisition of Droga5 in what Ad Age reported was the consulting firm's biggest agency acquisition yet.

Droga5 founder David Droga said the deal is part of a broader trend to push into culture beyond splashy traditional ads with a range of distribution platforms and methods. The merger "isn’t a nice-to-have… This is future-proofing." 

“Time will tell if Accenture Interactive's decision to acquire Droga5 was the right move, but it certainly is in-trend with what we’ve been seeing with the traditional agency model being challenged, encouraging an opening for a new, more transparent, consulting-based model to steal market share," said McConville.

The growing capabilities of the big consultants are forcing traditional agencies to develop their own similar consulting models, or their own acquisitions. The Financial Times recently reported that French holding company Publicis is near a $4 billion deal to acquire digital marketing agency Epsilon.

But, McConville said, "the agencies have come to rely on the profit-making properties of the non-transparent trading desks. The consulting firms are coming in clean, which may give them a reputational advantage. By adding creative chops to their consulting business, Accenture Interactive is one step closer to a full-stack consulting model that can challenge the legacy agency business.”