The professional letter

TO:                 President and Vice President

FROM:           ABC

DATE:           December 2, 2018

SUBJECT:    An In-house Advertising Department or an Advertising Agency

According to the instructions of Vice President, a study was conducted to analyze the pros and cons of using an in-house advertising agency or using an advertising agency for its advertising campaigns to boost growth and sales. The study has come to an end after successful completion by reviewing various factors from the market, and so results are presented in this report with relevant analysis.

Purpose of this study

The purpose of this study was deeply analyzing the situation for our company that how it can boost its growth, which has already been going well in recent years. It is a fact to remember that when a company is doing well in terms of growth, then it certainly can have more opportunities to grab. So, this study was to review the marketing strategy of the company and reshape it with a completely new approach. For this purpose, a complete analysis was done for the company to see that what pros or cons can be there if company develops its own in-house advertising department, which would cater all marketing & advertising strategies, or they should choose the option of an advertising agency. The project of this study was initially suggested by the Vice President of the company, and later he also got approval from the President as well.

Then the task was assigned to me to supervise this study and make it done with relevant data analysis, results and recommendations. It was certainly crucial for the company to understand that marketing and advertising can be critical for the future success on long term basis. It was important to understand that in what areas, the company is experiencing growth, and how these results can be enhanced with effective marketing. So, the task was to determine that how customers can be approached in best possible manner. Then a certain need arose that company need to move forward with targeted and planned advertising campaigns so that growth should be increased and more competitive advantages can be obtained. There is no question on starting the advertising campaigns, but main concern is to review that which pattern would be the best in all relevant contexts: the in-house advertising department or an ad agency.

The company is working in the food industry as company itself runs a fast food chain. So, it was important to look at various major competitors that how they deal with their advertising and marketing activities. So, various companies’ details were analyzed in this regard to found it that how competitors are doing it. The competitors can always give a good idea about various things of the industry. Once it was reviewed that what competitive businesses have done in similar kind of situations, the next step was to analyze the advantages and disadvantages of using the in-house advertising department. After analyzing this, the second option was to review the advantages and disadvantages associated with using the option of an advertising agency. The online sources were analyzed in detail in this regard.

Data Analysis of this study

It was necessary to take one or two major competitors of the fast food market, and analyze heir adverting patterns. So, first of all, the data analysis was done for the KFC. The company has its own in-house marketing department, which deals with all kind of ideas and concepts to deliver their advertising campaign with a targeted approach. In 2017, KFC was considered to be one of the best marketers, and they did by doing various things right. The director of KFC advertising told the press that KFC’s brand founder believed in creative ideas, so the company is always generating new ideas mixed with the essence of innovation so that they can come up with unexpected and totally different advertising campaigns. The company has also been found prominent in using various social media platforms in its ad campaigns [1]. The other major competitor is McDonalds, and they too have their own marketing department, which handles all kind of marketing and advertising campaigns. They come up with focused marketing strategies to produce great ad campaigns to attract customers and continue boosting their sales and growth [2]

After looking at various industry standards, here is a rough cost analysis to see that what looks like on table to use these two options:

The above cost analysis table gives a rough estimate about the two options that what an in-house department can cost, and what costs are associated by using an ad agency. The analysis gives a brief idea that using in-house advertising department can be bit costly as compared to hiring an ad agency. There are various things to consider while developing own in-house advertisement department like hiring managers and employees, training them as well as providing them an office space with relevant resources. But when it comes ad agency, the company just have to pay an amount, and share their requirement with the agency, there are no additional costs associated with hiring an ad agency.

Pros & Cons of In-House Advertising Department

A company can have its own culture which is associated with its vision and values. So, when in-house department will be developed, it will take care of company’s values, vision and culture. The ad campaigns would be integrated with the company’s overall objectives. The internal department and its employees can have more understanding that what is needed by the company according to its products and services. The team working within the company will be more committed and dedicated. The own department allows time and convenience, and this flexibility allows company to pace their ad campaigns as per their own needs. The company can be more comfortable in so many ways [3]

The first major con could be the costs. If an in-house department will be established, it will have so many costs to bear. A proper team will be hired, and it will be trained. So it will not only incur costs, but spend too much time as well. Moreover, the in-house marketing team may not have the diversity and skills, which otherwise possessed by ad industry professionals. The costs can increase with the passage of time as well [4]

Pros & Cons of Outside Advertising Agency

The first major benefit of hiring an outside agency is relatively low cost than managing the whole in-house department, which also comes with so many headaches. The other good thing is that ad agencies have the diverse team and skills, and they have the fresh knowledge and inspiration to come up with targeted campaigns. Moreover, they have more knowledge and experience of handling the ad campaigns for various competitors in different markets, so their skill set are broader in nature. The speed is another benefit as ad agency can quickly prepare an ad campaign for a company [3]

There are various disadvantages like the outside ad agency is not familiar with the products and services of a company. They also don’t have enough depth of knowledge to integrate values and mission of a company s per its culture. They treat different clients with different priorities, so a customized approach is always missing. There is always a communication gap which makes it hard for a company to convey its true spirit of an ad campaign. The ad agency may not give enough priority and importance to each small or big company [4]

Recommendations Pros & Cons of Outside Advertising Agency

Two options were analyzed in the study and after conducting in depth research, data analysis and cost analysis, here are few recommendations to be made. The first major recommendation is to go for an in-house adverting department for long term success. The company can get long term benefits from their own internal marketing team, which would be closer to the company’s culture, its vision and values. The internal team would have more understanding of the objectives along with the essence of products and services. The internal team may cost more initially, but in long term, the cost benefits will be more than using an ad agency. The internal team would be more committed and dedicated to do their job. So, it is recommended establishing an in-house advertising department. The second recommendation for current time is to hire an ad agency for an instant ad campaigns to boost growth along with start of development of in-house department. Once the department will be established, then there is no need to hire ad agency anymore.

References for An In-house Advertising Department or an Advertising Agency