Some firms undertake all of their marketing themselves (in-house) without involvement from external parties and advertising agencies. This article explores the advantages and disadvantages linked to creating your own promotions and advertising.
The diagram below lists the advantages and disadvantages of creating marketing, advertising and promotions in-house
Cost - It is often cheaper to use the firm's employees to create marketing campaigns. Advertising agency commissions are likely to cost more because you will need to cover their costs and "mark ups".
Control - the firm has greater control over the promotional campaigns and creative ideas
Product Knowledge - the firm will understand their product better than an external agency
Company Values - In house creative teams will understand company values and mandatory requirements (e.g. legislation, branding, company vision) more than external advertising agencies
Conflict of Interest - Lower risk of conflict of interest or confidentiality breaches as in house creative teams only work for the firm.
Limited Skills - In house teams are unlikely to have the same range of skills, resources and experience as advertising agencies.
Industry Experience - In house teams only create promotions for their firm whilst advertising agencies work for a big range of companies so are likely to have more industry experience.
No Economies of Scale - In house promotions may cost more than the advertising agency as they will not enjoy the same economies of scale as advertising agencies. Advertising agencies may have special deals and discounts negotiated with media outlets which lowers the overall cost of promotions.
Longer Turnaround - It may take in house teams longer to produce campaigns than advertising agencies due to lack of experience or resources.
Impact on Other Activities - If the firm is small, creating promotions in house may leave less time for key business activities.
As we can see both advertising agency commissions and creating promotions internally have advantages and disadvantages. The most effective way to create promotional campaigns will depend on the firm. For some firms it may be more effective to use a mixture of internal and external teams, whilst others will rely solely on external agencies or internal marketing departments.
