Is it better to hire an agency or build one in-house?

While recently perusing HBS Working Knowledge, a Harvard University website covering business innovation from the Harvard Business School faculty, I came across an article written in ’08 by Sarah Gilbert entitled: “Should You Bring Advertising Expertise In-House?” In it, Harvard Business School professor emeritus Alvin J. Silk answers questions about companies developing in-house advertising capabilities (aka: vertical integration). The article covered factors involved in making decisions to bring advertising in-house or not and included company size, company leadership, and control and cost issues.

I have had the pleasure to work for companies with internal ad agencies and also for companies that farmed it all out and both methods have the potential to be effective. Operative word: potential. Quite often companies wanting to bring advertising in-house desire greater control over costs – resources – and the end product. External agencies, when maligned, are viewed as expensive and difficult to control. There are critical factors that impact a decision to keep advertising at arm’s length and outside of the company’s walls or integrate it within the company.

For example –

Does the company have enough of an ongoing need or projects of critical mass to substantiate the expenses and resources required to house an in-house staff? How would the costs of planning, developing, and implementing marketing/advertising campaigns compare with those incurred by an outside firm?  Does the internal agency have the required economies of scale and expertise required to make cost-efficient media buys when compared with a larger external agency?  And most importantly, does a company have the expertise and sophistication to attract and retain the best creative resources as effectively as independent agencies?

Another consideration is the internal agency’s potential impact within the corporate environment and whether it would be hampered from driving necessary yet unpopular strategic decisions.  While external agency creative directors have been known to go to bat for a compelling concept, would an internal creative director mindful of his employment, wage that battle?

As mentioned earlier, having been in firms with internal agencies and with others that farmed out advertising to one or more external agencies, there is never one approach that can result in success. What is critical though is the following:

  • Leadership that understands the agency’s role – and most importantly, what the agency must produce.  The best leaders allow the agencies to present their cases and make impartial business decisions on fact.
  • Leadership that realizes there are true costs in hiring and maintaining internal agency staff -- and that there is much bargaining power when utilizing external agencies.
  • Hiring an agency takes time… hiring an internal agency takes time and skill… but firing an agency can be done very quickly.  Not so with internal staff.
  • Given their make-up, external agencies have greater potential to remain idea-fresh and generally do not carry company “baggage” or pre-conceived notions about the product.
  • External agencies only get paid when clients are happy.  “Employees” get paid twice a month…
  • External agencies are not part of your company.  You can take full credit for their work! (Kidding…)

(c) Alder & Associates 2011


Social Media and the Complaint

I recently read a blog entitled “Financial Institutions: 5 Ways to Use Social Media” by Kristin, on BackUpIfy.com. In it she reviews ways to capitalize on social media to benefit an institution and make the business more appealing to customers. The article offers five categories – Networking, Listen, Customer Support, and Public Relations. Kristin’s points are valid but I was surprised with one section of the article.

Listening is listed as the single most important way to improve your marketing and product offering. Agreed. Each year, companies spend thousands of dollars to gather market research either through customer surveys, focus groups, or secondary research, so that their products or services closely address the market needs.

Social media is an excellent way of gathering customer comments. The author goes on to urge companies not only to listen (in the case of complaints) but also to actively communicate with the complaining customer in order to resolve the issue. Here again, I agree. There are ways and means to take hold of a poor situation and make it right. I have, on several occasions, had a complaint which was handled by a very well trained customer service agent so that I quickly became again their loyal customer.

While it is possible to resolve customer satisfaction issues by social media, I urge caution on two points:

1.  If the business is run properly and if the customer’s need was handled appropriately at time of service, the customer should never be driven to the point of public complaint on a social media. It is inherently wrong for companies to allow customers to leave with concerns or issues that are not handled adequately. If that becomes the case, one might suggest that there are other problems lurking beneath the surface that should be tended.

2.  Social media is several steps away from human contact and one should not assume that the final effect would be the same.

Write in and tell us if you’ve ever had a complaint handled appropriately on a social media. Likewise, if you’ve had a complaint in a bank or a store that was handled well, let us know what it was that made you a happy customer!

(c) Alder & Associates - Marketing, Advertising, Public Relations


On Service

What with the holiday season here and the need to shop before the “day of madness” (December 24), I’ve been spending more time in stores. As a result, customer service has been on my mind and I have been gauging my service experiences, either good, bad, or indifferent. In a tough economy, logic would dictate that retail establishments wish to distinguish themselves in any way they can and many have done so with the service levels exhibited by their employees. After all, as Walt Disney once said “ Do what you do so well that they will want to see it again and bring their friends.”

That’s why last Saturday, I was stunned at a department store known for its high customer service levels. On that particular day, I approached the cashier with my items, had them rung up, paid for them, had them bagged and received not one “hello”, not one “thank you”, not one “come back and see us again”. Nothing. No acknowledgement. Complete indifference. Not that I seek Chatty Cathy sales clerks, but generally most individuals have come to expect a hello and at least a thank you. I remember hesitating as I left the store. Should I mention this to a manager or was I making too much of it?

The Ritz Carlton is known for a very high level of service excellence. If you’ve ever stayed at one of their hotels, you understand. Training is crucial and critical to their business model and of course, it shows! But it begins even before the training. According to Jerry Osteryoung in his article “The Ritz Carton Experience”, the Ritz recognizes that the heart of customer service is hiring the best individuals and keeping them with the company. And the company strives to have their associates anticipate what the customer will want! The excellent customer service experience begins with anticipation. It continues with an employee’s pride in what they do – being representatives of that company – being the company. Ritz Carlton associates provide impressions to customers and those impressions result in whether a customer returns for future business. For other companies, the heart of providing excellent service is something quite simple: Common sense.  Common sense means that a company associate should recognize how he or she would want to be treated in the same scenario. And frankly, in this instance, the associate likely was not the right person for the job. The store should consider their role as well.

One: Did they pick the best individual to fill the role?

Two: Did they properly train the associate in the basic service levels?

Three: Did they bother to monitor the associate’s performance to ensure acceptable service standards? Remember, that which isn’t measured can’t be changed… 

More on service on next week’s blog. Got to go shopping now! 

© Alder & Associates – Marketing & Advertising & Public Relations


On Becoming a Verb

On November 30, The New York Times web site ran a very interesting article by Nick Bilton called “For Start-Ups, the Ultimate Goal: Becoming a Verb”. The piece spoke of many new companies today aiming to have their company name become just that – a verb. For instance, rather than saying “Let me search that term on the Internet” how about “Let me Google that.”

Just think of the many verbs you use each day (and think of the companies they belong to!) My boss often says that he needs to “Photoshop” a picture. I have a friend in New York whose interior designer is on assignment in another country, so she often “Skypes” her…

The Times article goes on to mention that Fred Shapiro, editor of “The Yale Book of Quotations” stated that in the past, many companies whose names had become verbs worried that the name would become “generified” and therefore would lose its trademark status. Do you remember how a facial tissue suddenly became a Kleenex?  Or, rather than photocopying a document, you would Xerox it!  And, where would we be without an adhesive bandage – or, is it Band-aid?

Today, the school of thought believes that making a product name a verb can actually help the brand. This, I imagine, would be similar to saying that there is no such thing as bad publicity… Consumers using a company name or product name as a verb creates yet another impression that helps increase awareness for that company or brand. But – is there such a thing as too much usage? Can you “wear out” a name and does it hurt your brand?

I for one cannot wait for the day when business leaders in and around Richmond will say “Let’s AlderAds that new product!”  Is that too much to hope for?

(c) Alder & Associates


Don’t Worry… Be Happy… Hire a Consultant!

Scratch any company in the US today and you’ll find several if not droves of consultants at work. You’ll discover specialized consultants that arrive en masse from a single company all the way to an individual consultant that may appear once to get the assignment and arrive to deliver the final product several weeks or months later. Generally, consultants, in one form or another offer several key benefits that have made them almost indispensable in today’s business world.

Consultants are most always hired to fill a void of time, of available resources or expertise or skills. They may also be hired for contentious projects when an impartial third party is critical to getting the project moving with the least amount of corporate discord. They may be hired for sensitive projects where secrecy is be critical, for instance, the disbanding of a business line or the closing of a division or plant.

While some companies are very good at what they do, a specialized consultant will be hired to lend a special talent. For instance, consultants versed in Six Sigma Quality Process can offer a time-proven feature that would otherwise take months or years to perfect. Consultants with expertise in a specific topic often arrive with credentials as well as former clients to attest to this expertise and this offers credibility to recommendations that perhaps an internal department or team could not.

In the case of marketing and/or advertising, consultants are often brought in to review, suggest, implement, review, and finally depart:

Defining the Problem

Consultants will generally start by meeting with you and your team to review your expectations. Working collaboratively they’ll set goals and timelines to provide the results you seek. Most of the details will be vetted to insure that you receive the final product you seek and that your business is better off than before.


Marketing and advertising consultants may be called in to determine whether your marketing/advertising is working. They’ll look at your creative, the media buy-- are you spending judiciously and in the right channels? Is creative reflective of what your company offers? Is there a channel that you are not using optimally? These are all questions that a consultant can answer, offering a fresh perspective to “business as usual”. Or, your need may involve a more specific issue involved. Either way, the consultants bring their expertise in marketing and advertising and an “outside-in” perspective.


The third phase of a consultant’s work will involve a proposal of new work. This is where the consultant offers solutions to the problem(s) your business is experiencing and where the solution is custom-fitted to your business characteristics. The consultants may call in the expertise of yet others in the business so that the final proposal meets all of your needs and is almost guaranteed to make a growth impact.


Lastly, a good marketing/advertising consultant will monitor the success of their proposal and determine whether there is a need for additional tweaks. This is where the consultant exhibits their commitment to what has been proposed.

Consultants can be invaluable to a company’s future. In order to make the most of your consultant, you should be prepared to be honest and open about your company and available with your time, resources, and information. The good thing about inviting a consultant in is that you’ll receive a world of information, expertise, manpower, objectivity, and skills. The best thing about inviting a consultant is that they eventually leave (and you can take the credit)!

(C) Alder & Associates - Marketing, Advertising, Public Relations