Contagious' Lucy Aitken looks at why in-house marketing is on the rise
Last week, my colleague Arif Haq suggested that agencies' broken spirits needed reigniting. If this doesn't happen, clients risk beating ad agencies all over the world at their own game.
There are three words guaranteed to send shivers down any agency's spine. In. House. Agency. And the in-house agency comes in many guises. It could be Apple's growing unit in Cupertino, California, reported to be doubling in size, from 300 to 600. It could be the trimmer team of 75 brand evangelists at Topshop's HQ in London. Or it could be the vibrant Spark 44, a global network of five agencies devoted to reinventing Jaguar. The network is responsible for the high end car brand's first Super Bowl spot focusing on British villains.
Whatever form it takes, the in-house agency is becoming a more common sighting in the US. In a recent Association of National Advertisers (ANA) study, 58% of marketers said they have their own in-house capability, a figure that's increased from 42% five years ago. I asked Debbie Morrison, Director of Consultancy & Best Practice at the UK advertisers' trade body ISBA, whether this is happening in the UK too. She said: 'With the advent of 'real time' marketing and the agility required to deliver work in a multi-channel, always on world it would not be surprising if advertisers were to develop more in-house capabilities, as we are seeing happen in the USA.' Although there are currently no figures to back it up, Morrison's anecdotal data suggests that clients are taking on more work in-house rather than using external creative agencies.
What's the advantage to clients of turning their back on communications agencies which have built up years - or even decades - of experience? Firstly, it's cheaper and procurement directors prefer to keep it in the family. Secondly, a brand's voice now rings out from a vast number of platforms, so it's got to be as authentic in a TV ad as it is in a Tumblr. And if you're tasked with the marketing communications for just one brand, chances are you'll get pretty damn good at that voice. Finally, as the ANA study confirmed, speed is of the essence in a multichannel world: 71% of respondents claimed that quicker turnaround time is an advantage of in-house agencies.
Cash that was formerly earmarked for agencies is increasingly devoted to creating new jobs like 'community manager' or 'social media manager' within client companies. Social and mobile offer brands a direct channel to their customers: there shouldn't be a tangle of red tape and an army of account management staff on stand-by waiting to sign off a tweet. Instead those people manning brands' social media profiles should reflect that brand's tribe of followers.
Away from the day-to-day business of brand management, the strategic role of creativity is rising up the corporate agenda. Just look at Christopher Bailey, Burberry's new CEO, who will continue to be the company's creative director. His appointment actually helped calm city jitters about his predecessor Angela Ahrendts defecting to Apple in 2014. Over at Coca-Cola, vice-president of global advertising strategy and content excellence Jonathan Mildenhall has just been promoted to a role leading design and integrated marketing in the company's North American business unit. Talk about a vote of confidence in Mildenhall's creative leadership skills from Coke's HQ in Atlanta.
And now that Google is plucking top talent from agency and client companies, marketers can access seasoned experts for the much-needed external perspective that agencies have traditionally offered. Just last week, Google hired Kirk Perry who used to front up P&G's family care brands and had been tipped by some as a future P&G CEO. Of course, there's a benefit here for Google: offering expertise that would have formerly come under the remit of an agency from someone who's racked up years of experience client-side is going to help it attract more ad dollars.
Growing creative expertise within client companies could jeopardise the fortunes of agencies. That's why smart, adaptable agencies are masters at demonstrating their capability to think creatively and strategically. Because if marketers start bringing strategy in-house, far from being 'reignited', those agencies that don't excel at both risk being extinguished.
Lucy Aitken is a writer for Contagious magazine