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• Article | International Journal of Marketing Studies

  Build It, Buy It, or Both? Rethinking the Sourcing of Advertising Services

  Alvin J. Silk and Marta M. Stiglin

  This paper provides an update on the current state of in-house agencies. Whereas traditional consideration of internalizing advertising services was framed as a binary choice of build or buy, today's advertisers frequently pursue hybrid policies of build and buy to procure the customized bundle required to develop, produce, and implement relevant, resonant promotional campaigns. Increasing numbers of advertisers are discovering that the demand for advertising and marketing services is best served through the coordination and integration of resources from both inside and outside the company, rather than assuming that these options are mutually exclusive. A review of advertising industry history reveals why internal agencies have long operated in the shadows of their external counterparts and how the former organization form has evolved over time. The core competencies underlying the contemporary in-house agency model are analyzed, and the competitive position that in-house agencies presently occupy in relation to external providers is assessed. Two case examples of successful internal/external agency collaboration are presented. Finally, recommendations are offered for advertisers seeking to bring their internal and external agency resources together and arrive at a more collaborative operating model for advertising services.

  Keywords: Operations; Advertising; Advertising Industry;

  Citation:

  Silk, Alvin J., and Marta M. Stiglin. "Build It, Buy It, or Both? Rethinking the Sourcing of Advertising Services." International Journal of Marketing Studies 8, no. 1 (February 2016).  View Details

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• Working Paper | HBS Working Paper Series | 2015

  Build It, Buy It or Both? Rethinking the Sourcing of Advertising Services

  Alvin J. Silk and Marta M. Stiglin

  This paper provides an update on the current state of in-house agencies. Whereas traditional consideration of internalizing advertising services was framed as a binary choice of build or buy, today's advertisers frequently pursue hybrid policies of build and buy to procure the customized bundle required to develop, produce, and implement relevant, resonant promotional campaigns. Increasing numbers of advertisers are discovering that the demand for advertising and marketing services is best served through the coordination and integration of resources from both inside and outside the company, rather than assuming that these options are mutually exclusive. A review of advertising industry history reveals why internal agencies have long operated in the shadows of their external counterparts and how the former organization form has evolved over time. The core competencies underlying the contemporary in-house agency model are analyzed and the competitive position that in-house agencies presently occupy in relation to external providers is assessed. Two case examples of successful internal/external agency collaboration are presented. Finally, recommendations are offered for advertisers seeking to bring their internal and external agency resources together and arrive at a more-collaborative operating model for advertising services.

  Keywords: Management Practices and Processes; Advertising;

  Citation:

  Silk, Alvin J., and Marta M. Stiglin. "Build It, Buy It or Both? Rethinking the Sourcing of Advertising Services." Harvard Business School Working Paper, No. 15-093, June 2015.  View Details

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• Article | Journal of Current Issues & Research in Advertising | 2013

  How Concentrated Is the U.S. Advertising and Marketing Services Industry? Myth vs. Reality

  Alvin J. Silk and Charles King III

  We analyze changes in concentration levels in the U.S. Advertising and Marketing Services industry using data from the U.S. Census Bureau's quinquennial Economic Census and the Service Annual Survey. These data, heretofore largely ignored, allow us to redress some of the measurement problems surrounding estimates found in the existing literature. The data available permitted concentration levels to be tracked for the period 1977–2007 in the case of advertising agencies and for 1997, 2002, and 2007 for the other industry sectors. Firm level concentration, as measured by the Herfindahl-Hirschman Index (HHI) and concentration ratios (CRs), varies across the nine sectors comprising the industry, but all are within the range generally considered as indicative of a competitive industry. At the holding company level, the four largest organizations account for less than a quarter of the industry's total revenue, a share that changed little over the period 2002–2009, but one that is approximately half of estimates frequently cited in the trade press. The persistence of a diverse and relatively unconcentrated size structure appears quite consistent with other research on the underlying economics of this industry.

  Keywords: concentration levels; data; U.S. Census Bureau’s quinquennial Economic Census and the Service Annual Survey; measurement problems; Herfindahl-Hirschman Index; concentration ratios; Advertising; Advertising Industry; North and Central America;

  Citation:

  Silk, Alvin J., and Charles King III. "How Concentrated Is the U.S. Advertising and Marketing Services Industry? Myth vs. Reality." Journal of Current Issues & Research in Advertising 34, no. 1 (2013): 166–193.  View Details

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