What Bayer Bringing Marketing In-House Means for Other Companies

2019-10-28 by Ronn Torossian

Bayer Shifts Marketing Strategies

Pharmaceutical juggernaut Bayer has spent the better part of the year preparing to bring all of its marketing work in-house, replacing work previously done through agency contracts. It’s a move mirrored by many companies that are seeking to cut costs, spend more in other areas, and achieve a more genuine quality of work than some agencies can offer. 

Pros & Cons of In-House Marketing

This may cause alarm for those working in the agency area of the market, but there are valuable lessons to be learned for both sides of the equation in this story. Bayer has strategically worked to bring its marketing work under one roof, but instead of simply abandoning its agency partners, it worked with them to create a path forward. This approach has saved the company tens of millions of dollars in costs recouped by bringing the work in-house, allowing it to increase its digital spend. Many companies are eyeing this move as strategic. With the increased pressure on programmatic ads, data privacy, and higher levels of competition, brands are feeling the need to free up as much of the marketing budget as they possibly can. Unfortunately, many agency partnerships may fall victim to this shift.

How can agencies overcome this shift in the industry? Digital marketing is changing, and will likely continue to do so over time. It is the agencies that are willing to pivot and adjust their sails that will emerge on the other side with a roster of clients still intact.

A focus on authentic content and a genuine understanding of a client’s brand is a place agencies can start. Training team members and giving them a balanced workload in which they can focus on producing quality work over a massive quantity of work can help bridge the gap in content that many brands are feeling with their agency partners. For many brands, such as Bayer, having full creative control as well as having the power to respond to issues quicker are two arguments for bringing the work in-house.

It’s true: often with agency partnerships, problem resolution takes time. Let’s say that a brand sees an issue with a current paid search campaign and wishes to make some adjustments to it. The brand is more or less at the mercy of the agency to fix the issue or make any requested changes, and this doesn’t always happen quickly.

Agencies that show a quicker response to issues may have an easier time retaining their client roster. It’s important, as an agency, to find out what is causing brands to pull back and bring their work in-house. While circumventing the costs of an agency partnership may be a main goal, how can the agency then shift its priorities to offer a higher value for the cost? This will be an issue that continues to challenge marketing agencies as more brands explore ways to defray costs.

The example of Bayer shouldn’t necessarily be a harbinger for disaster. It’s simply an example of what some brands are beginning to do, and this example serves as a blueprint of pain points that other agencies can use to bolster their service portfolio. 

Ronn Torossian is CEO of 5WPR, a leading PR agency.

Ronn Torossian: Insights from a Native New Yorker and CEO of 5WPR

Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 250 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities