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-431074-39288400Whitepaper: Building an In-House Agency in a Mid-Sized Pharma/Biotech. Company Dana M Small Ms Category ManagementTable of ContentsBackGround Introduction The Sourcing – marketing relationship The Initial in-house and aor agencyOrg. Changes and Initial In-House StructureBusiness Drivers for ChangeFocus change for AOR and In-House AgencyOrg. Changes and Details of In-House Team Benefits of moving agency tactics in-houseSUpport of AOR Vs. in-house Agency KEy Takeaways / Best Practices1281430587692500BackGroundThe 2018 ANA report, “The Continued Rise of the In-House Agency,” found that in-house agency penetration is rising and workloads are increasing.78% of ANA members have an in-house agency in 2018, versus 58 percent in 2013 and 42 percent in 2008. For 90% of respondents, the workload of their in-house agency has increased in the past year, including 65% for whom the workload has increased “a lot.” The findings are informed by qualitative interviews with ANA members and industry experts (conducted in first quarter 2019) and a quantitative survey of ANA members (fielded in March 2019). There were 111 survey respondents. Services handled by the in-house agencies of respondents include: 91% creative for digital media 85% strategy 81% creative for traditional media 47% data/marketing analytics 33% media planning and/or buying Additional Information found in the report:- 57 percent of in-house agencies in this fact book were established in the last 10 years. - Most in-house agencies use a small percentage of freelancers, with a vast majority of the work completed by full-time employees. - Only three in-house agencies do not also have an agency of record and only one of those in-house agencies does not work with external agencies at all. - There is an even split among in-house agencies that use a charge back or custom billing method. A few utilize a cost center or combined cost center/charge back billing method. - All but one in-house agency works across the entire enterprise. Introduction Building an In-House Agency is no easy feat. And from my experience, it appears to be particularly new one in the pharmaceutical/biotech space. Primarily, because the brands have relied so heavily on agencies in the past. Especially when it comes to activities in the pre-launch or launch phase.Agencies are tasked with creating the strategy, playbook (brand book), Global / Regional design and feel of the brand and everything in between. They are the drivers of successful launches in the Pharma Industry.So, as a procurement and sourcing professional, you have to be prepared for the shift to move some of the existing tactics for the AOR to move in-house (when appropriate). These things can range from print production, media buys to digital support and more. In our case, we stuck with specifically post launch tactics that didn’t need the senior level support that the initial creation of an asset would. They were defined as “low complexity”, or something that a junior level staff person could manage. 233680-4445But to support the expanding in-house agency, I had to be prepared with the background knowledge of best practices, build extensive relationships, and change the support I gave to the in-house team. No longer would we be able to treat them as an external supplier.33655028829000THe sourcing-marketing relationshipBest practice – First, understanding constraints with brands and marketing support. Internally, ours included: Limited or small budgetsNo competition Niche expertise needed (for disease state)Limited resourcesI first built on successes of small project work (non-mandated environment). I knew from previous experience, without a strong relationship, execution of strategy and change management is extremely difficult.Second was to create a strategy aligned with internal brand business goals and needs. This included a multi-year sourcing strategy that was very small adjustments, over a long period. I never pushed, only suggested ideas that were outside the norm.This Strategy Included:Consolidation of agenciesRegional to Global alignmentFrom brand level to franchise-level supportBlended rates vs. rate cardsDifferent rates per brand or work typeLow complexity projects (similar to in-house work) had it’s own rateEstablishing working relationship with AgencyQBR’s without brandBi-yearly 360 reviewsMove work from AOR to in-house team including:Print-productionDigital and Media supoprtCreative services (post-launch)Consolidation of Med. Comm. agencies (patient and HCP events)Results of Reltionship building: As trust was built, the size/spend of the project increased tooIncreasingly complex strategies were deployedBecame a point person for internal as well as external agenciesExecutive support within Commercial function pushed down to engage with sourcing for support on critical and high-spend projectsBecame a partner for AOR to expand business internally (with new RFPs, projects and other opportunities)Confidential insight from both the brand, Agency, and In-House team on upcoming business changes and support for strategy changes11811011620500Initial in-house agency and aor structureDespite the movement from Commercial Ops. to the brand, the team structure still stayed the same. The digital team remained within the operations function with ~3 members and the creative and print-production was about the same size.Business drivers for changeControl over design and executionResource flexibilityReduction of cycle timeOn-site resourcesManage AOR spendEnsure AOR focus on strategyIndirect response to outstanding agency execution issues59134545317300Changes for aor and in-house team-297815376555New focus for external aor (agency)Strategic and Creative Support Senior Level ResourcesPre-launch/Launch campaign activitiesBrand Guidelines and ConsistencyCreative Campaigns Asset ProductionWebsite DesignVideo ProductionNew focus for internal in-house teamSupports all audiences (HCP, DTP, etc.)Focus on post-launch campaignsExecution and RepackagingManages year to year update of tactics Expansion of services paced with staffingAdditional digital consulting (development/management) supportCross Organizational Supportorg. changes and in-house agency details117157511811000 Print Production Details “Fab 5” Creative Team + Marketing OpsBrand Development/Design (including re-branding)Collateral Print Materials (all audiences)Internal CommunicationsWarehouse/FulfillmentProject Management and Regulatory Process Supportdigital Production DetailsAdvanced AnalyticsCRM (Customer Relationship Management)Platform ManagementDigital Display AdvertisingDirect, email, etc.Media Buying/PlanningDigital Community SupportSocial, Mobile, etc.Website Development / ManagementBenefitsReduction in project hoursShortened regulatory / cycle timesAll print production (including cross functional) moved to be sourced by in-house agencyCross-functional support by in-house teamAbility to scale quicklyBottom line savings (>$1M a year)Additional Benefits from implementationLeverage print and digital production providers cross-functionally Once project/tactic is complete, asset is transferred over No agency issues – i.e. holding it hostageEasier to switch AOR providersEasier to understand TCO (total cost of ownership) and other financial analysis for savingsPart of 3rd party supplier selection and negotiations-31432536258500Support of AOR and in-house agency-108585232410-200660274955-120015-36385500key support differences and similaritiesDifferencesAgency focus is revenue / profit margin leads to:Resources stretched thin Certain brands becoming low priority (“B-Team”)Internal turmoil over support603631021462900Changes the sourcing support type:Additional SRM meetingsAgency churn/RFx to add new agenciesSimilaritiesCreative teams incorporate freelancers Single point of contact – print or digital production leadsCan audit hours/ratesCreative team autonomyBenchmark internal/external tacticskey takeaways and conclusionBuild relationships first, then focus on strategyStart small and slow build to include creative capabilitiesLeverage in-house team as much as possible (AOR negotiations)Build a database for comparison of tactics and number of hoursAlways weigh pros and cons to building an in-house team ................
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