Making the Right Choice: The Pros and Cons of In-house Advertising vs. Amazon Agency Partnerships
Being an agency founder and someone who has spent the best part of a decade working in the agency world, you might assume my immediate response on the in-housing vs agency debate is pretty obvious. However, the reality is that I've witnessed firsthand numerous instances where both brands and agencies have made ill-informed decisions regarding which of these two models truly benefits a brand's business.
It goes without saying that the answer to whether brands should opt for in-house advertising or utilise an agency is a nuanced one and is dependant on multiple factors and really getting to understand what success genuinely means for the brand.
In this article, we’ll cover the pros and cons to both sides of the question and the emergence of a middle ground solution become increasingly more popular.
At a glance, In-house team vs Agency
Whether you are a brand starting out or long established selling on Amazon or other online marketplaces, the decision on whether to manage your paid advertising will inevitable come up with the two most popular options being:
Build your in-house team of paid advertising specialists
Work with a dedicated Amazon and Retail Media agency
Some brands may have the in-house capabilities, resource and expertise readily available to them and is typical of a larger brand able to afford the necessary talent and training required to run in-house. However, for ambitious start-ups, challenger brands, or those looking to save time and leverage the expertise of external professionals, partnering with an external agency becomes an attractive choice.
However, there's a third option that offers both flexibility and long-term control for brands, particularly those with a growing team of in-house headcount managing the paid advertising. Enter the world of agency consulting.
Agency consulting can mean many things, however at it’s core it’s a way in which an agency is able to provide on-going or adhoc support to brands through training sessions, workshops, support in team growth and impartial business advice. Unlike traditional agency partnerships, the agency does not take ownership or directly manage the day-to-day account.
This approach is great for brands who are looking to take advantage of an agencies broad and vast experience across multiple marketplace channels, category verticals and cross market knowledge while still maintaining control and ultimate ownership on the management and delivery of paid advertising activity.
Pros and Cons of using an In-house Amazon team
Pros:
Immediate brand and product familiarity.
In-depth knowledge of business operations and closer working knowledge with other teams.
Greater control over the team, including hiring, promotions and lateral team changes.
Cons:
Time and resource needed for recruitment, particularly in today’s competitive job market.
Additional costs associated with employee management such as training, healthcare, IT equipment, office space and employee turnover.
More expensive to scale.
Potentially narrower exposure and lack of experience.
Limited access to beta products.
In my opinion, the types of brands that can benefit the most from in-housing are those that have sufficient available resources and time to build, recruit, up-skill and manage an ongoing in-house team of experts. The biggest challenge brands are facing currently is the lack of experienced talent available in the market, those who are either willing to move to a specific brand who maintains certain values and those who fall within the available headcount budget is a highly sort after and limited volume of candidates.
Pros and Cons of using an Amazon Agency
Pros:
Access to advertising experts strategising and managing your advertising campaigns.
Multi market, vertical and channel knowledge.
Access to Beta programs that can give a advantage over your competitors.
Experience in growing multiple brands.
Established best practises and operational efficiencies.
Access to specialist campaign automation and reporting software.
Rapid time to activate campaigns.
Cons:
Less immediate knowledge of business operations.
Lack of brand or product familiarity (though good quality agencies learn about your brand positioning and become a true extension of your team).
The key benefits to using a specialist Amazon and Retail Media agency is the access to experienced advertising specialists, the rapid time it takes to onboard and activate advertising and the cost saving compared to recruitment and hiring of new in-house team members. These benefits are especially important for start-up or challenger brands who are looking to scale quickly and can’t afford to wait to recruit and hire. Also businesses looking to offload time intensive tasks and focus more of their energy on growing the business can benefit through the use of using an agency.
Why and when to use Consulting
Consulting is an increasingly popular offering provided by agencies, driven by the growing market demand from brands that already have in-house teams or are looking to transition from fully-managed agency services to in-house operations. It is an excellent solution that combines the advantages of partnering with an Amazon agency — deep specialism knowledge and brand growth experience — while maintaining control and hands-on management of your advertising account.
Consulting can come in many different shapes and sizes, and I suppose this is the real key benefit of this service is that it can be totally bespoke to your business needs. Whether you’re seeking knowledge on developing a robust advertising strategy, workshops on team up-skilling in campaign management and optimisation or support in successfully scaling your team, consulting can be customised to a brands needs accordingly.
Brands often benefit directly from consulting services offered by agencies to tap into shared knowledge and apply it to their teams. This process sometimes reveals that outsourcing certain elements of the business to agencies yields better results.
Final Thoughts
When it comes to deciding between building an in-house team or working with an Amazon agency, there is really no clear ‘one-size-fits-all’ solution, with each option having its own set of pros and cons that need to be carefully considered based on your brand's unique circumstances and business objectives.
Ultimately, the decision between in-house, agency, or consulting depends on factors such as the size of your brand, available resources, level of expertise needed, and growth objectives. It's important to carefully evaluate these factors and choose the option that aligns best with your brand's goals and resources.