As companies continue to move more resources in-house, agencies are scrambling to keep business. One strategy: fear.
In the latest installment of our Confessions series, where we exchange anonymity for honesty, we spoke with a senior executive at a global advertiser that’s taking strategy and media in-house, who said agencies use scare tactics like claiming the marketer’s rates will increase if it abandons the agency. Our conversation has been edited and condensed.
How did you decide that you need to move in-house?
Agencies are managing services I don’t need anymore. There’s consolidation. There once was a time when you had to work with five different ad exchanges, but that’s not the case anymore. The majority of our budget is spent against Google, Facebook and Amazon, and if we ask those platforms to come up with a targeting plan, they’ll do it. I don’t have to pay my agency to do that if Facebook will do it for me.
You have also uncovered mistakes your agency has made.
We’ve found everything from campaigns being paused to people moving off our business with nobody being told. Recently, we were trying to do a campaign on Facebook with a test market, and it got targeted to a broader audience. So who approved that? The answer is nobody. The agency just decided that these were the target audiences we should go after. There was a big discrepancy on how our programmatic was being run as well, and we were spending more than we had to.
Do you believe they’re erring on purpose?
I don’t think they’re doing this stuff in an underhand or sneaky way. My team often debates whether they’re just not smart or they’re doing this maliciously. And unfortunately, I think they’re just not smart.
With these discrepancies, how is your agency working to keep your business?
There’s definitely scare tactics they use. They’ll say, “Look at how many hours we spend. You’re never going to be able to do this yourself,” and “We have 50 people working on your account –you’re not going to hire 50 people.” Another is around data. They’ll start explaining to me all the ways our data has to be normalized and cleansed and structured. I look at my team, who are experts, and they were like, “I don’t know how to prove that they’re wrong.”
What about their rates? Do they push these knowing you are turning away?
Yes, the holding companies say they can get better rates with say, YouTube, than you can because they spend more in totality than we do and that we can’t do it without them.
Do any of these scare tactics work on you?
Mostly the rates. We’re really going to have to figure out whether the money we save will make up the rates we’re missing out on. If it goes wrong, we’re screwed.
Do you ultimately feel like it will be worth it?
Yes, I believe we could save between $2 million to $3 million, and if I got a full team for programmatic and search, I think we would do better, but at the very least … the very least, would do just as well as the agency is doing today, and I would have full transparency and be stronger digitally.