What Insourcing Benefits Your Company

The most important reasons for insourcing

Basically, insourcing is onestrategic company decision, which requires a careful assessment of the internal needs, the required capacities, the current and yet to be developed skills of the employees and the investments in these.In summary, the most common and important reasons why companies choose to insource marketing activities are as follows:

1. Greater control over marketing output
2. Data Ownership
3. Greater proximity to your own customers and the customer experience
4. Greater cost transparency
5. Long-term cost savings

Data Ownership

Data ownership means thatlegal legitimacy AND full control over a data setor individual datato have. If you are reading this article, ask yourself: Do you have these? Or do you quickly add a pixel that the agency sends?

1st party data

This is primarily about the data that is collected by the company itself (1st party data).  For example, from web analysis, online shop, CMS, CRM, data warehouse, call center, email marketing or also: display advertising.

Personalization as the ultimate customer loyalty

If this data is available internally, companies can capture direct, unfiltered information about customers and their needs and use it in a variety of ways. Owning the data enables the ultimate customer loyalty: individual targeting through targeted targeting and personalization based on data.

Data is valuable

The data from display advertising that the Demand Side Platform (DSP) collects is particularly valuable. Nevertheless, under the pretext of more favorable purchasing conditions, it often belongs to the agency and not the company that spends money to generate this data in the first place.

Data has immense value for your company – which is particularly important in a long-term personalization and optimization strategy.

All the more so when in the future we will increasingly focus on our own solutions that use machine learning!

Cost savings – a calculation example

A media agency typically receives 20% of the entire media budget. If you spend 5 million euros in the programmatic area, that’s 1 million euros. On average, 4 employees are busy with the campaigns – which translates into a salary of 250,000 euros for in-house employees. Accordingly, a company can make massive savings if it purchases programmatic inventory in-house with its own DSP license – even though the fees for its own DSP license are slightly higher than those of the media agency.

Source:Boston Consulting Group

Decisive reasons – a test

The following questions provide guidance for the insourcing decision. Rate the questions below on a scale of 1 to 5, with 1 being low priority and 5 being high priority.

Customer proximity and data ownership:

• Does your company have complete visibility into the customer journey?
• Do you have an impact on the customer experience?
• The company is the only oneOwner of his customer data?
• The company can use the data in real timepersonalized marketinguse?
• Is the company able to manage and analyze large amounts of data internally?

Reaction speed:

• Does the company respond quickly enough to customers (especially on social and digital channels)?
• Is the company able toProcess customer insights quickly?
• Is the company able to keep up with key trends internally or does it rely on agencies to do so?

Talent Management Skills:

• Is the company’s budget sufficient?to invest in technology, talent and training?
• Is marketing work sufficient and consistent throughout the year so that the company can justify creating skill pools using full-time employees?
• Can the company afford the time to build the required capabilities internally?
• Is the company able to recruit and retain talent, including experts?
• Can the company offer career opportunities to young talent?

If the answers show a lack of (data) control and a lack of responsiveness while at the same time appropriate resources can be set up, you should consider integrating activities in-house.

Hurdles in the insourcing process

Despite the advantages that insourcing marketing measures can have, this step must be carefully considered as there are some hurdles to overcome along the way.These include:

• Find the right people– Good creative people, data scientists and technology experts tend to work for companies with flat hierarchies and rigid corporate cultures often stand in the way of this
• The change from a variable cost structure(media agency)at fixed costs(Employee salaries) can create a high level of uncertainty, especially at the beginning
• Potential data loss when switchingfrom media agencies to their own technology licenses

Conclusion

Insourcing offers numerous advantages for companies, but the path to this must be carefully planned to avoid pitfalls.

e-dialog accompanies you through the insourcing process in your company. We support companies that have their own data in their own hands, are close to the customer and therefore make customer relationships and experience their top priorityBuild know-how to personalize the entire customer journey.This ranges from highly relevant advertising materials on all marketing channels to the user’s personalized experience on the website.

Do you need support with insourcing processes in your company? Contact us for a non-binding consultation:kontakt@e-dialog.group