According to the Association of National Advertisers (ANA), 78% of the organization’s members have an in-house agency, up from 58% in 2013. As the pace of using internal teams in brands accelerates, a new study from the ANA, Boston Consulting Group and Reed Smith reveals some concerns. Specifically, the research shows that attracting top-tier talent and keeping existing talent energized are the top two issues that in-house agencies continue to struggle with.
Part of the recruiting issue revolves around compensation models and focus on one specific brand. One senior director of integrated marketing at a footwear company said that “mid-level [agency] executives are well compensated, so going in-house requires taking a lower salary and dealing with the monotony of company life, where you focus on fewer things.”
Additionally, the lure of more prominent and prestigious work, usually done by agencies, is another scenario that could keep talent away.
“When companies choose to leverage only external teams for the higher-profile, more public campaigns, the top talent isn’t going to want to come in-house,” said a vp of account management for a financial services firm. “Any great talent you do have is more likely to burn out and leave for more exciting opportunities.”
“As we’ve said all along, agencies will continue to bring outside perspective, provocation, and expertise to their brand partners,” added 4A’s president and CEO Marla Kaplowitz. “We already know that agencies are a breeding ground for talent, where they have the freedom and flexibility to work on varied projects. Ultimately, it’s this talent and creative thinking that drives growth for brands.”
Yet, according to Warren Chase, vp and COO of Verizon’s in-house agency 140, one of the benefits of being on an internal team is the pace and ability to sell in work more frequently.
“I believe that when working in-house, more work that is created internally gets produced at a rate that is much higher than at an external agency,” he said. “The reason for that is the unique proximity the internal team has to the business, to insights, and leadership. Therefore, the road for an idea to get sold is much shorter.”
While Chase’s point may be accurate, Zach Canfield, previously a creative recruiter for Google, now head of recruiting for Goodby Silverstein & Partners, sees how in-house can affect talent, not just emotionally but perceptually.
“A lot of times I’ll meet people who will spend a year and a half working on something at a big tech company or in-house and then it just disappears,” he said. “In our careers, we’re rewarded by what we’ve done recently, and if you didn’t make anything for a year and a half straight, it could be detrimental to your career in some ways.”
Some of the ways that the survey of 111 respondents cited as positives in keeping talent engaged include a closer relationship with multiple internal stakeholders to expose creatives to a fresh set of challenges and stretch projects.
According to Michael Perdigao, president of advertising and corporate communications at The Wonderful Company: “Keeping creative teams energized is critical for retention but became easier as we grew—now we have more creative assignments and more variety in those assignments.”
“There’s a great routine that can feel great [in-house], and that’s understandable,” added Canfield. “But in my experience, a lot of great creatives get bored easily working on the same thing. They like bouncing around to work on different problems every day.”
In terms of management of talent, the creation of virtual teams appears to be a positive move forward. By breaking down geographic barriers, brands can address the practical challenge of talent shortages in a brand’s home market. Jack Teuber, creative leader for PwC, said that “strong talent, outside of the well-known creative hubs, would welcome a big brand opportunity. In our case, we hire for talent exclusively, since location doesn’t come into play for PwC’s virtual team.”
While there are both positives and negatives, Kaplowitz feels that the results of the study show that agencies in general still have an essential story to tell and that both in-house agencies and their other agency partners can coexist well.
“There’s a hunger that drives agencies to keep pushing forward, to stay competitive and creative. Agencies will continue to demonstrate how their creative thinking drives business results for their brand partners,” she said. “These in-house capabilities must be supplemented by partners who bring a wealth of cross-brand and category learning that’s needed to survive in our fast-paced industry. To make that partnership successful, marketers must view their agencies as extensions of their team and trust them as they would their team.”