In- house agencies: Some companies, in an effort to reduce costs and maintain greater control over agency activities, have set up their own advertising agencies internally. An in-house agency is an ad agency set up, owned and operated by the advertiser. Many companies use in- house agencies exclusively; others combine in-house efforts with those of outside agencies.
A major reason for using in-house agency is to reduce advertising and promotional costs. Companies with very large advertising budgets pay a substantial amount to outside agencies in the form of media commissions. With an internal structure, these commissions go to the in-house ad agency. An in-house ad agency can also provide related work such as sales presentations and sales force material, package design, and public relations at a lower cost than the outside agencies.
Saving money is not the only reason companies use in-house ad agencies. Time savings, bad experience with outside agencies, and the increased knowledge and understanding of the market that come from working advertising and promotion for the product or service day by day are also reasons. Companies can also maintain a tighter control over the process and more easily coordinate promotions with the firm‘s overall marketing programmes.
Opponents of the in-house agencies say that they can give the advertiser neither the experience nor the objectivity of the outside agency and nor the range of services. They argue that the outside agencies have a more specialized staff and attract the best creative staff. Also flexibility is higher since if the company is not satisfied with the agency it can be dismissed, whereas changes in an in-house agency could be slower and more disruptive.
Examples of in-house agencies in India are:
1. Levers – Lintas (previously)
2. Videocon – Confidence
3. Reliance – Mudra