In-housing or Internalisation, an Outcome of Digital Transformations of Companies
  • Our analysis to understand what in-housing is (internalization in French), starting with its origins, and why it has become one of the driving subjects of the organization of companies undergoing digital transformations?
  • The 5 needs in which any decision-maker will soon be in over the choice of initiating an in-housing strategy.
  • Our 3 tips for a successful in-housing strategy given WITH’s 6+ years of experience in the subject.

I started my career in the early 2000s. Then, the internet was simply just the internet. It was still far too new for anyone to think to internalize it into their business. Back then, business leaders considered that having a website was a sufficient guarantee of modernity.

When I was working in large agencies, they always relied on doing precisely the opposite of what most business leaders thought was relevant. Due to this, large companies often outsourced their digital needs to these agencies.

12 years later, I joined L’Oréal. My job was specifically tailored for me and did not exist before me. I became Director of Digital, Media and CRM of Global Travel Retail.

I arrived at a time when L’Oréal, much later than other industries, like tourism for example, decided, starting in 2010, to consider digital as “core to their business.” This was around the same time as retail professions elsewhere.

Following the arrival of Lubomira Rochet as Chief Digital Officer, she initiated a number of changes which transformed this division of the CAC40 to proportions that I could hardly imagine at the time.

Nowadays, I notice how companies are obsessed with technology and they sometimes initiate drastic changes that result from this obsession. “Digital transformation” projects have become the norm and the subject has invaded all management committees for several years. No company or department is immune to it.

What is the real challenge of this “digital transformation?” In short: gain competitiveness and gain productivity. Above all. And this is where in-housing comes in, an essential phenomenon of this transformation that is not often talked about, at least in France.

Yet this is the human part of an equation for change where it is often all about technology and algorithms. If only it were that easy!

So let’s put into perspective two headwinds that I have observed during the past ten years with WITH clients:

  • On the one hand, the variety of expertise required for digital transformation projects is expanding more and more. Marketing functions require many needs as well, which were still rare a few years ago, and encompass all aspects of the teams in a business: e-commerce, data, precision media, influencer marketing, advocacy, etc. We must therefore train new experts but above all integrating new talents
  • But on the other hand, the tension on the number of FTEs (full-time equivalent) is permanent in the DAF (Data Acquisition Facility) and HR teams of large groups. Care must be taken to control the extent of fixed human resources in an economic environment which requires tight financial management. There is one constant: avoid at all costs allowing the number of employees to soar despite the needs of digital transformation

This is where in-housing or internalization comes in, in response to these opposing but inseparable needs.

In-housing consists of internalizing the expertise necessary for the company but without necessarily hiring them directly. These in-house experts are able to adapt to change and sometimes are able to join projects on a short-term basis.

First need = cost control: 

What is crazy is that in 2008, the ANA (Association of National Advertisers), an American association of advertisers equivalent to the UDA (Union Des Annonceurs) in France, had identified that the phenomenon was growing. They conducted a study on identical parameters on three occasions (2008, 2013 and 2018) to analyze its evolution. The observation is clear: in-housing is growing very strongly.

78% of brands now have internal media capabilities, 90% of them already internalize all or part of the agency work in the United States.

In France, the IAB (Interactive Advertising Bureau) estimates that nearly half of businesses are in the process of internalizing their purchasing programs. Some are unaware of how or who to contact. Imagine cohorts of in-house experts all disembarking on the same day. Be careful, it’s not that simple!

And that’s where WITH comes in. When we were established, we immediately felt this need among our clients. Especially since I was familiar with this subject during my 3 years at L’Oréal.

In 2015, our customers were requesting in-housing expertise, but without necessarily naming it. Looking back, the signals were clear. We responded immediately to the request and in a few months we became a core partner for Danone, L’Oréal, and then a few months later, Coty. Imagine, half of our 35 employees in Paris and Madrid are now located at the heart of our client teams (Danone, L’Oréal, Coty). We have hired them on permanent contracts (for the most part because we only hire on large potential) and send them on missions over cycles of at least 12 months to expand the internal teams of our clients.

In light of 6 years of experience in in-housing, we have identified five needs that govern the decision to take WITH Implants and therefore to do in-housing. These are key topics that we highly encourage to read in depth for anyone interested in this phenomenon.

Client’s statement:

“We want to do more while expanding our budget” … “We want to do as much without expanding our budget.”

Decision-makers are more cognizant of the expenses incurred in a business. To succeed, you have to demonstrate a capacity for “smart spending”, for intelligent spending.

In-housing improves the productivity of labor, and therefore of the money invested.

Second need = speed, agility and internal conversion:

This is a criterion for success for them. One example is Unilever, which announced in 2018 that it had saved 500 million dollars by in-housing their agency activity.

Our clients tell us, privately, that in the end, they end up paying a little more than before, but they get a lot more work in return. We should therefore not speak of savings but rather of superior performance and improved efficiency. And above all, above all, quality!

Double Interest: this often allows money to be allocated to other projects and therefore to broaden business’ scope. This is essential given the scale of the needs.

Client’s statement:

“To move forward as quickly as top management would like, I need to have experts by my side every day. With an agency, I’m going to waste time.”

Rhythms in business have accelerated considerably over the past fifteen years. Decision-makers must carry out multiple, complex projects simultaneously with expected results in shorter time frames. In addition; they must adopt agile advancement methodologies, based on iteration, A / B testing culture. Do not throw any more, the cup is full!

Marketing is now a 365 days a year operation. These teams try, analyze, adjust, and succeed or fail. In a society that lives twice or three times faster than before, we are constantly trying to reinvent ourselves.

In-housing makes it possible to find the best internal change actors who unite stakeholders around projects, even ones that are specialized and extremely transversal.

Third need = shared tutelage

Client’s statement:

“We want to learn too. We are not just doing it for us.”

Obsolescence threatens all functions of the company in the face of technological changes. Decision-makers that we have met in recent years also wish to import knowledge carried by a “knowledgeable expert” whose voice is indisputable and inevitably more listened to, since they come from another company and will then return to that company. The expert dares more, offers everything, and remains at the forefront because it is their passion. In our experience, internalized “implants” have often spent a significant amount of time sharing their experience and expertise.

This educational dimension contributes to the continuing education that is expected today in any function in a company, however high it may be.

Indirect bonus: this is a source of happiness at work for everyone. We have received positive feedback from our clients and partners.

Fourth need = control and transparency

Client’s statement:

“We want to collect our data ourselves, to feed our intellectual property and no longer delegate it to external agencies who pass on our achievements as part of the service to other players in our market.”

If we take the example of data or media, in-housing is as much a story of cost (see above), as a story of regaining control over one’s IP (intellectual property). When we innovate in Precision Marketing with an agency to which we delegate their media capabilities, we either leave behind know-how that these agencies sometimes exploit in cascade for other clients of the same category or industry. Sometimes it is even stated in the contract that binds companies to these agencies yet they explicitly do the opposite.

The ad tech waterfall also has enough intermediaries of all kinds. No need to add more. Quite the contrary!

Fifth and last need = Transient & Movement

Client’s statement:

“We know that we have an e-commerce need to structure our content strategy for online sales. But once that is done, we will need new profiles to make it all work…. ”

I often talk about “build” cycles and “run” cycles (make it work and optimize). When integrating a new technology, it takes different resources to plug that technology into the business’s operating processes and then a whole different type of expertise to ensure it functions optimally over time.

For HR teams, this is a real headache.

In-housing consists of having partners who, like WITH, are in charge of quickly finding the right profiles, of bringing them in but also … keeping them.

How can we not talk about the “crisis of desire” which is hitting all the major groups head-on? They are looking for candidates with very specific skill sets which they do not necessarily have internally and which they have great difficulty in attracting and above all retaining in their teams. Let’s take for example, someone who is an expert in data. This person can in theory change companies seamlessly whether it is Danone, LVMH, or L’Oréal. Why should this person remain twenty years in a sector for which they might not necessarily be passionate about? At WITH, we understood that the new generation was “two feet in, one foot out”. And that, much more than headhunters, we are coaches who take care, in addition to our clients, of their most specialized experts whom we have sought for them.

In this, we are at the heart of the culture of Open Innovation: these “implants” bring to the team who they are, what they have seen, what they have understood from all their experience. They bring new life into the companies that they have joined.

Collaboration has never been more important these days. What marks the success of the most daring projects is no longer raw intelligence, but the alliances of complementary talents that would never have met before.

In-housing kills two birds with one stone because it adapts to external and internal issues.

Outside the company, the world has changed, the speed of upheaval makes you dizzy. In-housing new talent is a way to respond in an agile manner and gain height. How to interact with consumers who have their faces in their phones all day starting from a young age? We need more and more specialized talents, who have integrated the codes of this time and who write them in their own way, to speak to the greatest number of people.

Internally, there are fewer and fewer people to do more and more work and that we have to take more and more care of, this is hyper-caring. Companies know very well that they must pamper their employees who at times are under pressure. They must take care of them and one of the ways to take care of them is to place an implant in the team who will lighten the workload and bring immediate credibility. The client-implant experience (I know is going to sound naive but our experience has proven it) will continue to be positive for all players involved. This upskilling, this continuous training of the teams is done organically, over the days, by capillary action, in a completely fluid manner. Moreover, employees quickly forget that their colleague is an implant!

Should we In-house entire teams? Beware of fantasy …

I do not believe that in-housing can be done in a team sense. You should not set up a group of people who are all “implants.” It is neither how the concept was designed, nor realistic. The equilibrium of value is activated only by the unit. We must integrate talents one by one into an existing community, taking into account the pace of arrival and the adaptations of the ecosystem which necessarily reacts back.

Selling the arrival of a turnkey team that will integrate themselves in a matter of hours at a high price is unrealistic and deeply untrue. It is an illusion to believe that employees will accept a team of ten people. Even over several months. An arrival of a group of people, however talented they may be, remains the arrival of a compact foreign body in an already established and subconsciously resistant structure. This is disguised acting, no more, no less, and we say no to our clients when they ask us too.

This is where we differentiate ourselves from Oliver, which helped Unilever build its in-housing project. The empirical approach does more harm than good in our view.

3 tips on in-housing:

  • The right expert on a sharp subject is never far from you: our networks are powerful as long as we find the right entry. We know how to do it.
  • The hard part isn’t finding the expert. The hardest part is convincing this person to come and for that we have to guarantee them an exchange of value, based on transparency. They will want to gain experience from this position, not a dream job.
  • The balance of the implant is not taken for granted and requires more work over time, which always amazes our clients. Staying sharp, competent, alert, on the move is not innate, it has to be worked on a daily basis and that is our mission.

Why choose WITH?

At the end of 2014, we embarked on a vision and, as is often the case with successful young companies, we realized that we had sensed a deep need in the market. This was to propose a new path in work with a pioneer status. All this brings us serenity and real joy. We were right and also we realized this at the right time.

If WITH does not have a color in its logo, it is because it takes the colors of the company for which it works. And if WITH is called WITH, it is because we are a dotted line (we are the dots) between two worlds which do not intersect and with which we do more than work together with our clients. Our implants constantly create added value to our clients with fantastic results.

It was important to me to share this (long) 5-year reflection, because what we need most is to establish ourselves as a leading partner in this phenomenon that everyone is experiencing but that too few people still participate in in France.

In-housing, I am writing your name.