COMMENTARY

In Or Out: It's Really About Making Sense Of The Market

• by Gord Hotchkiss , Featured Contributor, September 18, 2018

Fellow Insider Maarten Albarda  tackled the in-house vs. outsourced question a few weeks ago in a thoughtful column. Today, I’m trying to repay thoughtfulness with additional thought provocation.

The topic, I suspect, touches on the increasingly disruptive nature of marketing strategy.

As Maarten points out, when we think about bringing marketing in-house, we also have to consider unintended consequences. But those fall on both sides of this question.

What is probably a bigger question is how a company defines marketing, because the answer to that question is not the same as it was 20 or 30 years ago. There, marketing was predicated on the assumption that the market was a fairly static and linear entity. But today, we are discovering that the market is complex, non-linear, adaptive and dynamic. And that discovery dramatically impacts the whole in-house vs outsourced question.

Maarten is absolutely right when he outlines many of the speedbumps (not to mention gapping chasms) that can lie on the path to bringing marketing in-house. The reason, I believe, is that everyone involved is considering this plan based on the above-mentioned assumption. They aren’t factoring in the disruption that’s tearing the industry apart. And whether you’re continuing down the agency path or not, you need to factor in that disruption. By doing so, you necessarily have to bring a different perspective to the decision. 

Given the highly dynamic nature of the market, I believe there are two essential loops that have to be part of any marketing plan today. One of these is a robust and externally focussed “sense-making” loop. I’ve written about this before, in the context of search marketing. 

The concept is borrowed from the fields of cognitive neuroscience, artificial intelligence and psychology. This shifts the fundamental precept of marketing, from that of crafting an internal strategy and executing it to a waiting market, to that of constantly monitoring the evolving nature of the market and responding in real time.

Strategy is still vital, but rather than an executable plan that plays out over multiple years, it’s a “frame” (to use the terminology of sensemaking) that has to be continually validated and -- if necessary -- updated.

The other loop is a nimble and fully “tuned-in” response loop. The two play together. One informs the other. They are also highly iterative. They have to  be updated continually.

So one has to ask, are these loops better situated inside or outside the organization?

There are pros and cons on both sides of the question. Theoretically, for sensemaking, I would say the advantage lies on the agency side of the table.  Agencies should find it easier to maintain an objective, external focus. They also have the advantage of having “sensing” antennae over multiple clients, giving them a bigger and less myopic data picture.

The challenge may come in matching the data to the existing frame. The frame -- or strategy -- is the nexus between the market’s reality and the marketer’s reality.  It is here where an agency may lose its advantage.

Maarten rightly states that when a company decides to bring marketing in-house, “these decisions have far-reaching consequences across the wider enterprise that impact working methods, required internal and external support structures, capital investment, HR policies, IT investment and talent, etc.”

But I would argue that this should be true of marketing regardless of whether it lies within the corporate domain or at some agency boardroom table. Given the “real-time” reality of today’s marketing, it should be fully integrated into every aspect of the business. Siloes just can’t cut it.

That’s a difficult integration when all the players are at the same table. I suspect it might be impossible when those players are at different tables within different companies.

One has to consider deeply the motivations for bringing marketing in-house. As Maarten notes, if it’s just cost-saving, that’s a false economy. Control is also cited. That is getting closer to the issue, but it’s using the wrong language. Control is impossible. Responsiveness is a better label.

The motivation for bringing marketing in-house should be exclusively to build the most robust sense-making and response loops possible.