From outsourcing to insourcing: Why companies are building in-house digital teams

In recent years, there has been a shift in the way companies approach their digital marketing strategy. Traditionally, many companies would turn to digital agencies to handle their online presence and marketing campaigns. However, there’s a declining appetite for digital agencies, and many companies are now choosing to hire digital teams internally instead. Could this spell the end of the digital agency business in Uganda? How can they bounce back?

Several reasons account for this shift. The two main reasons are the need for companies to have greater control over their digital strategy and the diminishing returns from digital agency retainer investment.

Companies are realizing they need a more hands-on approach to their digital presence to stay competitive. Having an internal digital team gives them greater control over their strategy and makes changes more quickly and effectively. Besides agility, an internal team is alive to the key business priorities (and these keep evolving), risks, and targets in a much more intimate way than an external supplier would. The impact of digital marketing investment on the bottom line is now commonplace in boardrooms and high-level company meetings, with boards and executive teams demanding more.

The good old vanity metrics (reach, impressions, views, clicks, whether that product launch hashtag trended or not, to mention but a few) won’t cut it for an informed leadership team, digital marketers now need to show how that translates into tangible business value like brand equity, leads, sales, customer feedback and other metrics like reduction in cost to serve. Unfortunately, most digital agencies are stuck to reporting vanity and not business metrics owing to agency team or technology deficiencies.

Additionally, internal digital teams access customer data and insights an external digital agency may not be privy to depending on the data privacy and protection policy in place which is an added advantage. Data-driven digital strategy is key to success, without the right data, a digital agency will use a cookie-cutter approach for all their clients or rely on external data that may not be representative of their client’s unique situation, leading to the wrong diagnosis and prescription. The need for personalized and tailored strategies is driving companies to seek out internal digital teams.

A company is as good as its people. This fact is perhaps more relatable in the agency world than in any other industry. Most agencies in Uganda have become hunting grounds for client-side hires, they do so little to retain their best talent or train and develop those who stay. It’s common practice for them to hire young and unskilled but affordable talent, while this is a good thing for the industry and the country at large, without mentorship from a senior colleague/s, it’s easy for such teams to focus on the tactical executions for their clients with little to no strategic view. Since digital marketing is no longer just about having a website and a social media presence, the complexity requires a deep understanding of various channels and how they interact with each other. In many cases, digital agencies struggle to keep up with these changes and may not have the necessary expertise to effectively manage all aspects of a company’s digital presence.

The shift towards internal digital teams is not without its challenges. Companies need to have the right talent in place to effectively manage their digital presence. This may require investing in training and development to ensure that team members have the necessary skills and knowledge. Additionally, companies may need to invest in technology and tools to support their digital efforts and allocate the right budget to get the job done.

The declining relevance of digital agencies reflects the changing needs of companies in the digital age. By hiring internal digital teams, companies can have greater control over their digital strategy, save money on agency fees, and create personalized and tailored strategies. While this shift is not without its challenges, companies that can build strong and effective internal digital teams will be better positioned to succeed in the digital marketplace.

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