Post-Brexit, brands are increasingly recruiting their own in-house talent, while creatives, desperate to keep a roof over their heads, are increasingly open to a move client-side. But other than job security, what other benefits can this approach offer?
Brands believing that their creative needs can be better served by themselves, rather than by an agency, is nothing new. Why wouldn’t they? On paper it would be cheaper, faster and result in fewer compromises for both sides. In reality, however, there’s been one very big hurdle to success – talent.
The problem of wooing the best creative talent away from their agency heartland is the reason we’ve seen so few in-house agency models truly succeed. Instead, a hybrid model like that of the Oliver Group, or set ups such as Spark44 (Jaguar) or Cheil (Samsung), have emerged where clients seem to be getting the best of both worlds – world class talent in an structure that’s completely dedicated to their needs.
Of late, the pendulum appears to be swinging towards in-housing. For brands in today’s economy, budgets are tight, the landscape ever more fragmented and, more than ever, they require creativity around the clock. But beyond that it seems that agency-side talent is increasingly receptive to the prospect of moving out of the agency environment.
According to the 2016 New World Talent Survey, there has been a 68% increase in the number of individuals wishing to move client side compared to two-years ago.
“The most obvious reason why agency personnel might be tempted by the in-house carrot is quite simple,” says Kathleen Saxton, founder and chief executive of the Lighthouse Company, the headhunting firm that carried out the research.
“In these roles the talent will more than likely work fewer hours for more money, solely focused on a brand they are deeply passionate about.
“On a much broader level, for many clients, the traditional agency relationship is no longer the most precious conduit in their business. Those creatives and planners with a true passion for a given brand, business or sector may feel more involved and respected in an in-house team.”
More than just a way to save money
For Specsavers’ deputy creative director Stephen Reed, the decision to move in-house was a mix of the reasons Saxton outlines. He spent much of his career in creative positions at renowned agencies like Tribal DDB and BMB before deciding to move to the high-street optician’s growing in-house team in January last year.
He suggests that brand-side marketers are seeing in-housing as more than just a way to save money and Reed points to fewer compromises on briefs, developing an intimate knowledge of the business and not being a slave to timesheets and budgets as just some of the benefits he’s finding client-side.
And perhaps most tellingly: “Clients seem to be less inclined to pay agencies for creativity – it’s an increasingly big issue. But for creatives, it’s important that we get the time to do great things when we need it.”
Specsavers’ in-house division is now one of the largest in Europe, with some 1800 staff working on more than just the ‘Should’ve gone to…’ positioning, including store design and product.
Other in-house teams like that at the BBC or the prolific 4 Creative at Channel 4 are also going some way to show that they can hold their own against many leading agencies.
It is for this reason that Reed predicts we will see a marked rise in the number of in-house agencies springing up over the coming months as clients realise the potential for getting it right, if they can secure the best talent.
And with Brexit, the number of agency-side talent vying for in-house positions could come down to reasons that are far more pragmatic. Various reports have emerged since June indicating that marketing budgets will be under the microscope while research from Business intelligence firm Advertiser Perceptions suggests that we will see a spate of business reviews as brands look to reappraise their media and creative.
Saxton explains that, during such times of uncertainty (whether that’s during periods of recession, post-recession or even the current Brexit environment), the Lighthouse Company tends to see its candidates strive to take more control of their careers and not leave their future in the hands of others for fear of redundancy. So, taking the risk of sticking it out when your agency’s biggest account might go up for grabs is, for many, simply not worth it.
But marketing’s success is no longer predicated on creative alone and for some advertisers there’s more urgency to get a grip on the mechanics of digital marketing. For Nissan, that need is for programmatic. A global advertiser that can’t personalise its ads at scale is wasting considerable budgets and so having the expertise in-house to ask the right questions of its agencies and brief adtech partners correctly is the only way forward, according to chief marketing officer Roel de Vries.
“We’re coming out of a point where the media agencies had all the knowledge and then they go and place the budgets with the media owners,” he claims. “The world of programmatic is changing all that and we need to get better because it [programmatic] cannot be a black box.
“We are significantly stepping up our capabilities in-house to truly understand the models we’ve got in place and to run the analytics because it’s not only about the media placement. Having the skill on our side means we push for closer cooperation between us and the media agency. That’s going to create the change we need to understand who our customers are and what we want to achieve with them. You can’t have all that skill outside the business.”
It’s a glimpse into how global businesses are reappraising what skills they need from a modern marketer. Rather than attempt something drastic (and potentially disruptive) like launching a new internal team to in-house key expertise, these advertisers believe that ingesting those skills can happen in a more naturalistic way.
Take Aviva – it wanted to grow its team in such a way where it retained the best parts of its relationship with Razorfish. Charles Reeves, the insurer’s global digital product director, explains: “What it allows for is a level of continuity… It made sense to make the hires because I needed to build capacity for bringing forth creative and digital work that we needed.”
Keeping it fresh
But for all the upsides of moving in-house, there are some clear drawbacks.
Agencies are a hotbed of great talent precisely because they house so many bright and creative minds. Transplanting them from this environment into a brand-led business is no guarantee of continued great work.
At Specsavers, Reed describes it as a constant balancing act to maintain the processes that make its in-house agency successful, without the wider business chipping away at it.
“We achieve that by being in a separate building. It’s a symbolic gesture – it says that we are part of the company but that we’re separate,” he says.
It’s also something that Jaguar Land Rover has come up against with Spark44, the advertising agency it has a 50% stake in. It functions as a separate entity to the car marque, but services no other brands. “By consolidating agencies into Spark44 we’ve been able to reduce our cost base around the world and bring transparency. We do fewer, bigger, better things,” says global head of advertising Ian Armstrong.
With this integration however comes the risk of its output becoming stale. Armstrong is still toying with how to keep inspiring people, such as giving them time each month to go away and “get exposed to something they wouldn’t”. But his “acid test” for how Spark44 has benefitted the business comes not only from the improved brand perception metrics it has seen since the agency’s inception, but the fact that the consistently strong quality of work it has produced is now attracting a diverse pool of creatives through its doors.
“In the early days it was petrol-heads coming to us, but now we’re attracting people less interested in cars but fascinated in the brand and how we grow,” he reveals.
What’s true in any case is that the proliferation of in-housing shows no sign of slowing down and traditional agencies will inevitably work closer to brand-side creatives.
The Oliver Group was arguably one of the fastest to respond to such shifts in the market by embracing a model whereby it creates bespoke mini-agencies that sit within the client’s internal structure. “We’ve got more than 50 ‘agencies’ and none look the same,” explains Simon Martin, chief executive of the Group. And, he says, it works.
“Take BMW: we built a dedicated inside agency for BMW to constantly measure, test and create fresh content for its website.
“In addition, we used resource from our central team to build and develop BMW’s new websites. This model has saved BMW 20% on agency costs for digital content and web development.”
For other shops though it will be a case of letting go of the static, siloed status quo and working out a way to get in sync with the needs of the businesses they serve and fully immerse themselves inside its business or risk being left out in the cold.
This feature was first published in the 9 November issue of The Drum.