I got asked why advertising and marketing services are externalized to agencies. I admit I couldn't figure out the answer.

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Because an honest outside perspective is often needed

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because living and breathing the brand gives you clouded judgement and a lack of perspective

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Damn S1, I came here to say because the Pepsi ad too.

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^ This. The economics of it also don’t make sense, generally doesn’t make sense to hire specialized talent when you can contract with a company who is able to spread the costs of production, creative, accounts, etc. across a bunch of clients.

There are some functions that can be easily brought in-house (community mgt., a lot of content marketing, search, programmatic) but why assume the risk of assembling a whole internal creative team for all your above the line advertising when you can simply get an agency and fire them if it doesn’t work out.

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Building on this. From a media standpoint there's economies of scale from combining media buys that reduces prices.

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Businesses outsource all sorts of services for efficiency and performance.

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Also easier to hire and fire agencies than your own employees I think.

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Because artists don’t want to work in corporate culture and it’s boring for them to work on one brand or a handful of them for life

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If you only work on one brand, you become a product of that brand and what they produce. An agency has visibility of the industry as opposed to just the competition. And most often, internal creative is often run more like a design/production studio, due to lack of planning and creative leadership who understand branding.

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The current in-house shift is cyclical. 2-4 years from now CEOs and CMOs will re-learn everything posted above and shift back towards outsourced talent and services.

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It had its own set of challenges. Agencies become seen as a way to cut headcount costs and get a level of quality that most inside teams can’t match. That basically meant that every pitch we won at the time meant that we were taking someone else’s job. Makes the first few months a bit of a nightmare in terms of trying to build trust and rapport.

Historically, there were no marketing departments at clients. That was the agency.

Also: all of the above.

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The fact that you can’t figure this out on your own.....

Oi! He is asking right? Everyday is a school day. And how do you know if he didn’t google things?

On that note OP: check out the writing of Stephen King (the planner).

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