Brand 2020: How Coca-Cola, Mondelez, BBC and Paddy Power feel about marketing going in-house

The marketing sector can be a complicated place as new marketing tools and techniques are launched, almost on a weekly basis. Powered by The Drum Network, this regular column invites The Drum Network's members to demystify the marketing trade and offer expert insight and opinion on what is happening in the marketing industry today that can help your business tomorrow.

In 2016 The Blueprint and The Drum Network launched Agency 2020 – an initiative which brought together innovative agency heads to talk about what agencies will look like in the year 2020? As a follow-up to those findings, we have turned the tables and asked brands what they will look like in terms of shape, structure and purpose in the years ahead, as we launch Brand 2020.

Change is a constant within agencies who are continually evolving to meet the demands of the clients to whom they deliver marketing services. But what are the key challenges and factors that are driving change within marketing departments at the brands that we all know and love?

This issue recently formed the topic for a roundtable discussion hosted by progressive talent search company The Blueprint and The Drum Network. The Blueprint brought together four leading brands around a table to offer their thoughts on the above subject matter and more.

The first Brand 2020 session focused on the complexity of today's media landscape, the theme for the second part of the Brand 2020 discussion centred on topics that have hogged more headlines than any during 2016 – the war for talent and diversity. This article considers the trend for clients to take marketing services in-house rather than out-source to agencies.

Clients such as Samsung, Unilever, Specsavers and Clarkes Shows are well known and often well awarded for building their own marketing capabilities in-house and the quality of their advertising. We have even seen senior creative leave leading creative agency Adam & Eve DDB recently to join an in-house creative team at the BBC. So, will this become a continuing trend for clients and a growing threat for agencies?

Giving their opinions at the roundtable session hosted at The Riding House Café in London were (clockwise from top left) Aedamar Howlett, marketing director at Coca-Cola; Gareth Moss, partner at The Blueprint; Catherine Blizzard, director of marketing and audiences at BBC Worldwide; Paul Doran, strategic partner at The Blueprint; Philip Lloyd, chief marketing officer at Snatch, and Philip Jackson, global brand strategist at Mondelez.

Core findings

The panel agreed that outsourcing to an agency can be more effective than taking marketing services in-house because it removes the personal attachment from the work. Having a close group can mean courtesy hinders the progress of the task; people endeavour to edit ideas to fit the bill and skirt around being brutally honest, rather than discard weaker designs. Despite this, more and more brands are sourcing marketing material internally, not only because people close to the work will be more dedicated to understanding the cause, but it is financially beneficial.

Is it easier to save money and have the people closest to the company create content they know and love, or is having a fresh pair of eyes vital for the success of a campaign?

One attendee ignites the discussion by deliberating the source of creativity: “Paddy Power has created one of the most distinctive personas, personalities and tone of voice of most brands, I would argue, in the UK, largely by a dedicated team of ex-journalists who have worked at the brand for a long, long time; that team has grown, changed, adapted, developed and experimented with new platforms and that sort of thing. That is an in-house resource that has always been in existence and I don’t think we could buy that resource from any outside agency or if we did, it would cost a fortune because we have a 24/7 approach; on Christmas Day people are tweeting and updating Facebook statuses. There is someone there all through the night and that is because engagement and entertainment is a key facet of the brand – I think the dedication needed to work as hard and as antisocially as sometimes all of that means that the expense would be gigantic and much more so than it is internally.”

Source of creativity

Most participants seemed to agree that creativity can be extracted both in house and externally, albeit people may be uncomfortable to speak up in a close kit team.

“It’s interesting that the agency brings you the objectivity that allows you to focus and create something”, someone comments.

Another attendee objects, stating: “No, we all bring the objectivity. It’s not that the agency is the holder and the harbinger of objectivity or newness. We’re in it together. The objectivity is why we’re doing it, what is the end goal, what is the output, what is the standing on top of Mount Everest and waving the goal and taking our selfie. Not we’re the briefer, you’re the briefee – you need to keep us on our toes. We need to be bringing business, you need to bring innovation and creativity. We’re both in that together and it’s where we’re headed that creates the objectivity.”

“It completely depends on your budget that year”, someone else chimes in. “It depends on what you’re trying to achieve at the time. I think before I joined World Service, they used external agencies quite a lot for ad campaigns, massive budget cuts – comprehensive spending review I think it was called – and everything came in-house. There was always an in-house team but they did bits and bobs and they did on air architecture and a bit of season branding so they were invited to do some ad campaigns and the first one they did, they actually had to pitch against an agency. By the time I came there, we just didn’t have the budget so we gave them everything to do in house.

"I think the benefit is, particularly with very complex distribution model, we’ve got 28 languages, TV programmes through partners. We’ve got digital syndication deals on our own 24/7 TV. We’ve got radio – some of it’s through partners, some of it is broadcast. It’s so complicated to try and explain that and buy in external agency resource that really knows what a Pashtu speaker in Afghanistan, really understands the B class cities in Northern India and how they consume news on a local channel. You really struggle to get that from an ad agency. I’ve valued having an in-house team. I know they can do 28 languages. I know they won’t forget to make sure image rights and music rights are covered – I know all that belt and braces will be done and I know it’s an awful lot cheaper to do the volume of assets, creative assets in house than to outsource it.”

Personal attachment

The conversation shifts towards team chemistry affecting the progress of work, as someone explains the difference in relationships when switching between in house and out house:

“We’ve attempted certain things in house. Ultimately, you strip everything back; it’s harder to say to a colleague that you hate something than it is for an outside agency and I have tried to more strategically and smartly about structures. The core of it is that creating ideas in whatever channel in whatever format is a very personal thing for the person that’s created them and you need a team of people around you to defend that idea and make sense of that idea and put logic around that idea and strategy and so on. I don’t think that the outsourcing of that can be beaten by an internal model because there are people that are praising you and you have to sit next to and so on; I think the sheer human relationship side of being an employee and having fellow employees inherently limits the necessary discussions you need to have about the objectivity, about creative ideas.”

Echoing this point, someone adds: “I think the danger is that if you’re all one team, then you have to create a culture of having the confidence to critique, be disciplined and talk about those things afterwards. It is teaching them to put yourself in the consumer’s shoes. Everybody can be objective and a sense that we’re all trying to achieve a really good piece of creative for this outcome."

“You can become institutionalised.", another argues. "The trick is to make sure that the structure means that they don’t report into the same people. One of the things that I do internally is I work for a team which is called marketing. I don’t work for the categories, so I don’t work for the chocolate or the biscuit or a category. Therefore, if I am critiquing or looking at something, they’re not my boss or they’ll not be writing my end of year review. So, I can look there and have an objective comment on that piece of work (even if it’s an internal conversation, because you’ve created that). But it is too easy sometimes where you know it so well and you understand and you’ve heard of all of the visions and the goals and this is what we’re doing and this is whatever we’re trying to do as a business, that it becomes a self-fulfilling prophecy and you start to provide work or solutions that are too in line, too on message, on code for you as a business.

“An unusual example is the old conversation that Tony Blair and Gordon Brown didn’t get on, but it was actually that conflict or that rubbing that made things interesting. That friction, where you could have honest debate or you could say I disagree or throw stuff across the room, that meant that you could get to something more interesting.”

"I hate to say this", declares one participant, "but sometimes the marketeers are the colouring in department around the edge. It’s being able to do all of those things and playing to the strengths of being able to do any of the above rather than saying it all has to be in house or all has to be outsourced.”

Structure in the workplace

I’m quite excited about the new BBC creative model. They’ve got the benefit of scale. So if you think of all the different channels across the BBC and am ambition so that you have home and away teams, so occasionally if my brief goes in, most of my audiences are very young, I get a couple of people from the BBC3 team to have a crack at a World Service brief, just to bring in those blended skills. We haven’t got that far yet because my team have literally just moved into their team, so we’re settling into ways of working and we don’t want to throw out what we do brilliantly, but I think having them being part, I think the problem was size. I only had 9 people in my creative team, they blended skills, multi-discipline pretty much, which was good, but that’s only 10 people. So it is quite difficult to get, you rely on turnover to get somebody with a completely different way of thinking or doing things. I think moving into BBC creative, there’s going to be 70 odd of them, then you’ve probably got sufficient scale and turnover and range of channels and brands that they’re working on, such that you do get that spark but you’ve also got that baseline knowledge that doesn’t mean you’re spending a lot of time trying to explain to a bunch of guys in Soho or wherever that the World Service isn’t what you hear on the radio here, it’s completely different overseas.

Is it possible that there will be an increasing trend with the Oliver model? There are people within agencies actually working within brands now, so you’ve got the best of both worlds. Do we see that as an ongoing trend?

“As I understand it, they’re not full time employees of that business." says one attendee. "They’re still Oliver employees. They’re planted in, so they’re working in house, but this is it, because you don’t really have the culture of working in an agency because they are actually in house. So they’re in effect like an outsourced market department but it’s actually in house.”

Another attendee added “I think ultimately the market will decide. I think the success in my mind is that the successes that are derived from various different attempts at all these different models and ways of working will be the ones that are most clear, the ones that will grow their businesses most, is that that will be the one that we naturally start to coalesce around. For me personally I struggle to see how say, whether they’re called social media agencies or however they’re currently described, I struggle to see how that becomes a long term viable model potentially.”

It seems that the debate between outsourcing and in-house marketing is an ongoing battle that has good qualities to be drawn from both sides. However, with more internal training and businesses' frugal behaviour in preparation for changes in 2017, could in-house marketing be the way forward for brands?

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Richard Draycott

I head up MiNetwork which is a UK-wide organisation that works closely with the owners and directors of independently owner managed marketing services agencies to ensure that they receive maximum exposure to build their personal and business profiles, have access to a broad network of like-minded marketing business owners willing to share knowledge and experience and ultimately build more transferable value in their business, through improved efficiencies and business development opportunities.

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