The Ad Industry’s Sea Change

How the In-House Shift Led to More Opportunities for Creatives

It’s only been a few short weeks of the 2023 hiring landscape, and so far, we’ve seen major tech industry layoffs (think Google making the decision to cut 12k jobs, Microsoft at 10k employees, Spotify letting go of 6% of staff).

The growth of tech companies in the past twelve years has really changed the landscape for how people in the advertising industry can build their careers. Initially, it was big tech monopolies such as Apple, Google, and Meta, followed by companies flush with cash like Lyft, DoorDash, Spotify, and Dollar Shave, which began to build their in-house capabilities. Even more traditional brands such as Allstate, Walmart, and Disney invested more in their own advertising capabilities.?

It offered ad industry executives a number of perceived benefits: a less chaotic work environment, better perks, competitive salaries as well as stock options. In some markets, like San Francisco, ad agencies felt this shift acutely, especially in the recruitment of young talent, looking to make the most of a moment.?

One of the major benefits of working in-house is exposure to the client's perspective of marketing challenges versus how an agency may look to solve those problems. Nearly every person I spoke with felt gaining this insight was invaluable and would make them more effective at their job going forward. The trade-off of working in-house is that you are the marketing department, whereas, at an agency, you are the driver, the commodity. Those working in-house also may find their portfolio is very one-dimensional.?

As the market has shifted, in-house agencies and their companies are changing and with that, the opportunities and benefits of working in-house will change as well.?

In-house agencies are not going to go away, but some of what were seen as benefits before, at least in the short term, may no longer be. First, companies such as Google, and Meta are maturing and no longer making runaway profits from having near-monopoly control of their sectors and are now under pressure from changing tastes, regulations, and new challengers. With the cost of borrowing increasing, brands that invested in growth without turning a profit are now under far greater pressure. What it boils down to is this: stock options may not have the same projected value and brands do not have unlimited money, therefore salaries may not be as much as they previously were able to offer.?

The reason in-house agencies were created in the first place was a cost-saving measure. As money becomes tighter, in-house departments become an expense and are not seen as vital to the product.?

For those who have gone in-house, or are considering such a move, it is worth pausing and asking what you are looking to get out of your experience. In my opinion, those who have gone brand side in senior-level roles (i.e. ECDs and CCOs) have fared the best as they have been able to make the transition to a large corporate firm. They have become sought-after for their marketing expertise at other large corporations and are extremely well compensated.?

Companies see their in-house agencies as a cost that is not related to their core business. As brands continue to scale back or focus on performance marketing versus larger brand work, what these brands may do is look to hire agencies and have agencies build dedicated teams who may also sit on-site with the client.?

That said, those that have worked in-house have developed valuable skills in understanding how brands view marketing and branding. Brands will continue to look for and value those that can provide thinking, solutions, and ideas that are not cookie-cutter, and those with in-house agencies will understand these environments, expectations, and how to communicate to leadership that looks warily at creative ideas. Those clients will look favorably upon those who they perceive to understand their needs and will rest assured of having a person with in-house experience.