This year, Byjus' in-house creative agency won silver at Cannes, reigniting the long-running debate between external ad agencies and in-house ad agencies. While we must celebrate Byju's creative team's victory, I think it’s an opportune time to share my views on the same.

When deciding how to source your advertising needs, it's important to understand the distinction between an external advertising agency and in-house assistance.

In-house teams are immersed in the brand's culture and knowledge every day. This level of immersion is difficult to match and produces game-changing results (like the ad film Masterjee from Byju’s). While an external ad agency may be able to bring a fresh perspective, they will need time to gain brand and domain knowledge and experience, if they are not an expert already. External advertising agencies are mostly results-oriented, innovative, and time-saving. External ad agencies assist you in removing roadblocks and problems that your in-house ad agency may not be able to spot as they can’t exit from the insider mindset to see things from the outside to get a new or unknown perspective. While brands can focus on other important tasks while refining all aspects of their business, the multi-domain expertise of external ad agencies is a big draw.

Let’s understand why brands go for an in-house ad agency.

Enhanced transparency: When a company hires or outsources to an agency, it may lose transparency about the steps or procedures taken to deliver results as well as the progress of specific projects. Your company requires transparency to ensure that all projects are progressing as planned and they are meeting your short and long-term objectives.

More faith: Outsourcing can jeopardize your company's confidentiality. Furthermore, some content creation processes necessitate the disclosure of consumer information. Although the use of information available is frequently done with consent, unconsented third-party access via outsourcing or data leaks can jeopardize the integrity of your brand.

Increased effectiveness: The main advantage of forming an in-house marketing team is that it allows business leaders to manage communication. While working with external agencies, the manager has to deal with miscommunications and other issues between departments. By handling these internal issues internally, managers can focus on their tasks while increasing their chances of achieving desired results.

In-House Ad Agencies’ Advantages over an external Ad Agency

Internalizes the business: You can keep company operations internal by having a marketing team that is a part of the company's staff rather than outsourcing to other agencies. It allows any revenue generated by an advertisement to be reinvested directly into the company. It also enables a company to experience internal growth by adding new marketing team members.

A greater understanding of the brand and product: If you have an in-house marketing and design team, your employees will gain a better understanding of your brand, products, customers, and target audience. Effective marketing necessitates strong research and comprehension abilities. Keeping this knowledge within your organization can help you improve your product offerings and brand image.

Now, let’s understand the advantages of an external ad agency over an in-house one.

A dynamic and different perspective on a problem and solution: Unlike in most of the cases, talents in an In-House Ad Agency are strongly aligned to their leadership’s viewpoints. Whereas, talents of an external Ad Agencies are not under any hierarchical pressure and assumptions and hence they think differently without bound by viewpoint of client's leadership, bringing in innovative perspective and solution to the problem.

Greater skill sets: An external agency provides you with the ability to use their team and resources to achieve your goals – whether it's a single project or a more complex long-term marketing strategy. A strong marketing team must have a diverse skillset, including digital marketing, social media management, Print / TV/ Radio / Digital advertising campaign management, and much more.

Increased adaptability: Content creation and marketing require extensive planning. You can avoid all that stress by hiring a company to do what they do best. Furthermore, agencies frequently provide short-term and/or on-demand assistance for specific topics. This assistance allows your team to improve flexibility and focus on more productive tasks within your areas of expertise of brands and businesses.

Increased creativity: The main advantage of external agencies over in-house ones is the increased creativity. As the external ad agency team is not under the immediate shadow of big bosses from the brand, they experiment and express themselves more freely, and hence get more creative solutions than what an in-house ad agency team gets you. Furthermore, because they can find their own star(s) among their artists and writers, agencies can focus on the end-user experience rather than getting bogged down by BS from their internal marketing team.

Multi-domain expertise: This is one of the biggest draws for external ad agencies, as innovation and changing the game steaks come from such a repertoire of knowledge and expertise. Cross product fit, opportunities, and understanding of consumer behavior in various other industries other than the very domain of the brand becomes a big advantage 

Cost effective: In case of low or no performance, you can change your external Ad Agencies a lot more swiftly as compared to that of changing the entire team of the In-House Agency. You hire an external ad agency when you need it and save the cost when you don’t. 

Divide and Conquer: A brand can divide its various specialist functions of marketing and advertising amongst the best external Ad Agencies from the industry, to ensure they get the best one can ask for. If one of the ad agencies is not performing well enough, you as a brand can replace the one with the next bets possible. It lets you juggle between the best talents without any guilt, ensuring the brand gets what it needs.

Competitive Edge: The external ad agency displays a better competitive edge as their business is dependent on it. Unfortunately, for an external ad agency, they are only as good as their last work, and hence they deliver the ‘best’ it can get. The brand doesn’t need to ignite the passion in the teams of the external ad agency, as the pressure of business is enough to do so.

What do I recommend and why?

When it comes to determining what is best for your company, there is no right or wrong answer. Whether you hire an ad agency or depend on your in-house ad agency, it's critical to do what works best for you and your goals. 

A hybrid approach may be a good option for businesses with a good marketing budget but limited internal resources.

So, what is a hybrid approach and how does it function?

Hybrid marketing is a fairly new term, but it's used interchangeably with other approaches to marketing, like in-house and outsourced. The definition of hybrid marketing is that you use both the company's resources and outside experts. Larger and higher-stakes work, such as marketing strategy, planning, and campaign development, can be outsourced to an external ad agency, while medium and adaptation jobs can be handled by in-house ad agencies.