The profile of the in-house creative agency is on the rise. A year ago reports that Apple was creating some of its advertising work internally caused much buzz, Facebook last month released the latest campaign from its in-house unit The Factory, and internal teams -- from Specsavers to Jaguar Land Rover -- are continuing to win awards for their creative output.
Research by the Association of National Advertisers in the US (‘The Rise of the In-House Agency’), found in 2013 that the penetration of in-house agencies had increased 16% to 58% since 2008, and according to ANA group executive VP, Bill Duggan, the trend continues.
The survey, based on responses from more than 200 client-side marketers including the likes of Dell, IBM and Western Union, defines an in-house agency as a department, group or person that has responsibilities usually performed by an external advertising or marketing/communications agency, excluding PR. It found that the rise was due in part to companies’ need to reduce costs, and for those running successful in-house agencies, the efficiencies that can be gained by having a creative team within the organisation are tangible.
Richard Holmes, Group Marketing Director at Specsavers, admits that he put the existing in-house set-up under scrutiny when he joined the business in 2007, but quickly concluded “that this team of people creates a huge amount of value for the business, produces advertising in a very cost-effective, but very fast and responsive way”. The time saved by bypassing the numerous strategic and planning meetings of usual client-agency relationships, for example, is marked.
“We run briefs, we sign off and we get it done,” he says. “In a retail environment that’s particularly fundamental, and the digital world has made that even more so.”
The digital world, with its multiple channels and growing complexity is indeed a major driver of in-house agency growth.
“Speed and efficiency is crucial nowadays,” says Ian Cranna, VP Marketing and Category at Starbucks EMEA. “With more channels, high-quality content is absolutely key for us to be able to move in a high-quality but fast way and to maximise our marketing budget.”
According to Debbie Morrison, Director of Consultancy and Best Practice at UK advertisers’ trade body ISBA, the existing agency model is increasingly being questioned, as advertisers face this complexity and realise they have to run things “more smartly, more efficiently and more effectively”.
The ANA survey also cited the growth of digital channels and the need for quicker turnaround as one of the reasons why both the penetration and the responsibilities of in-house agencies are growing.
This is a benefit Holmes at Specsavers appreciates.
“The need for more and more content means that having everybody together -- client and creative team -- makes it much easier to respond to that environment, rather than having lots of different agencies trying to understand each other,” he says.
Specsavers’ ability to react to news events -- such as the mix-up of the Korean flags during the London Olympics -- is a prime example of this responsiveness. Or when footballer Luis Suarez bit an opponent last year, “we managed to get an ad out pretty much that night,” says Holmes. “And across digital channels in an instant; that would be very hard if we did not have an internal agency.”
Beyond The Low-Hanging Fruit
As in-house agencies rise, they also become more sophisticated and strategic -- not just expected to pick the “low-hanging fruit” of marketing functions, as Duggan puts it, but increasingly dealing with far more lucrative work.
At insurance company State Farm in the US, the creative services team of just under 200 employees works exclusively on campaigns but also in collaboration with other agencies of record. Its work ranges from internal posters to customer-facing material including broadcast and digital, and is commissioned by mainly the internal communications and marketing team or public affairs.
The department has seen a 25% increase over the last three years in the number of its projects, and a five-to-eight times increase in the number of creative deliverables, according to AVP of Creative Services, Mark Gibson.
“We are increasingly being asked to get involved in projects that we haven’t been asked to before, being asked to lead initiatives where in the past we would have only been asked to help execute,” he says. “There is a reason that more companies are turning to internal creative agencies. They see the efficiencies that you can get from a cost, time and brand-familiarity perspective, and they see the quality of the work getting better.”
One of the main advantages of an in-house team is its ability “to understand the persona and the tone of the brand”, says Gibson. “We get the voice of the brand in a really big way, and it’s easier and more efficient and more effective for us to do some kinds of work than an external agency”.
How Do You Get There From Here?
The State Farm creative services team was launched 45 years ago as mainly audio-visual and technical support, but has evolved into the full-service internal creative agency it is now.
Yet not all companies have the benefit of an internal creative team built over decades, and creating a fully-fledged operation from scratch can seem daunting.
“It’s a very complex task,” says Simon Martin, founder of Oliver marketing, which places bespoke creative teams within clients’ businesses. “You’re bringing different skillsets, culture and mentality into your organisation, that are often quite different to the core business. Maximising the potential benefit is much harder than it might appear on paper; you can’t just hire people and tell them to get on with it.”
ISBA’s Morrison believes that not many are likely to follow the Specsavers model.
“It takes a big effort and is a big change. But there will be more marginal changes,” she says. “Many businesses are looking at functions rather than setting up broad-scale in-house agencies.”
Barclays bank, for example, set up its own editorial board to create news agenda-driven content, and the Chief Marketing Officer of The Post Office, Peter Markey, revealed during Advertising Week Europe last month that he was about to create an internal team to create in-branch collateral. He will be taking that function in-house and running it alongside existing agency partnerships that work well.
“I’d argue that I have not yet found [an agency] solution that covers everything I need,” he said, “so perhaps a way for us is to actually push a bit more the other way.”
Starbucks EMEA, meanwhile, started using the services of Oliver two years ago. The team is still on the Oliver payroll, yet sits embedded in the client organisation and can grow as needs dictate. For Cranna it was the ideal solution to execute the creative adaption, print production and distribution which the EMEA business requires, supplementing the original creative work from the Seattle HQ in-house creative studio. There are two key benefits, according to Cranna. One is a deeper understanding of the brand voice.
“The second, much harder benefit, is that the efficiencies are incredible. Back and forth of review and feedback around creative work is immediate, literally cutting out many layers of time, and therefore money.”
Whether bringing individual functions in house in response to the ever-evolving marketing mix, or buying in a bespoke team, internal creative services will play an increasingly visible role at many companies.
For those looking to go all the way and set up an internal agency of their own, meanwhile, longevity of the management team is crucial, according to Specsaver’s Holmes.
“You should only do this if you’re in it for the long term,” he says. “You need to have a long-term vision for it, and be able to hire people that are very good creatively. If I was doing it, I would do it in very small bite-sized chunks.”