Nestlé, hybrid approach to in-housing, effective marketing

What is more effective: external agencies or an in-house team? It seems Nestlé found a perfect compromise in the heated debate: they gathered a team of external specialists supervised by internal executives to achieve more effective marketing management. Here you can find what functions they decided to handle themselves and what goals they were pursuing with the move.

In attempt to increase marketing effectiveness and transparency the world's largest food company pulled experts in media and tech from partner agencies and appointed internal executives to lead them. Today many large advertisers are thinking about moving at least some capabilities in-house, even though the process is not very simple, and there are a few concerns and problems related to it. Partially it was triggered by the FBI investigation into non-transparent practices in the industry. But it’s worth mentioning that in-housing is not just a temporary trend, it’s becoming a reality, especially hybrid approach to it. According to a recent ANA (Association of National Advertisers) study, 78% of their members have an IHA. If Nestlé’s internal team proves a success, it can become a model case for other companies. And it seems to be a good strategy, because they can choose the best experts for specific tasks and reach the needed KPIs. 

The initiative was first introduced in the U.K. and U.S. as Global Digital Media Center of Competencies (DCoC). It is a good example of hybrid approach to in-housing, which allows using the advantages of available options and creating something that works well and matches your need perfectly. It is unknown how many people exactly there are in the team, but its size is significant. With talent from top agencies like IPG, WPP, Publicis and Dentsu lead by the company’s global head of sales, Sebastien Szczepaniak and Global Head of Marketing, Tom Buday Nestlé is hoping to improve accountability and digital media performance. Here are six aspects where external specialists will be applying their skills:

  • transparency;
  • audience operations;
  • ad operations;
  • retail media;
  • supply and trading
  • dynamic creation optimization.

DCoC will be working on relevant marketing trends and hopefully will be able to ensure better conditions concerning ad inventory, data and analytics through negotiations with ad tech partners, including publishers and programmatic advertising platforms (demand-side and supply-side platforms). With DCoC’s help Nestlé is going to invest more in first-party data and make media buying process more transparent. The company has already tested some SSPs for transparency and reduced their number by more than 90%, leaving only about ten of them over 2018-2019. DCoC’s assistance will be necessary to negotiate more favourable contract terms in emerging local markets, like of the company’s global data management platform. The team will manage Nestlé’s first-party data, which allows it to be less dependable on third-party data and cookies. Data negotiations with Facebook and Google is another important aspect that will be handled by DCoC. The effectiveness of some media measurement tools offered by leading advertising platforms raises questions, that they are not willing to discuss.

As we have already mentioned, in-housing is a difficult process, especially when it comes to technological aspect. According to The Drum, after Walmart in-housed its digital advertising services, some campaigns were delayed. But this doesn’t stop global leading companies like PepsiCo from turning to this approach, because when carefully planned and strategically implemented, it can produce great results.

If you are thinking about bringing some capabilities in-house or even building a full cycle in-house agency try AdoptoMedia. We offer a flexible platform that can be incorporated into your company’s IT infrastructure to improve marketing effectiveness, increase accountability and transparency of media buying processes, handle media billing and manage contracts. With our solution you will be able to automatically create monthly invoices and give full visibility into marketing operations to C-level executives. It’s easy to manage and quickly implemented. With our platform you can optimize media mix, eliminate inefficient channels and increase ROMI by up to 30%.