Barely five years ago, Verizon had more than 46 agency partners, and it outsourced nearly all aspects of its communications business. Cut to the present, and the telecommunications giant has essentially reversed course, with Verizon bringing “core competencies” of its communications business in-house—including a substantial chunk of its creative and brand-narrative work.
As a result, says Andrew McKechnie, Verizon’s chief creative officer, the company has “greater control over the brand’s design, voice and identity,” and who doesn’t want greater control, right? In fact, the trend of brands taking elements of their marketing business in-house has practically become an industry-wide norm as advertisers are increasingly expected to be ready to react at a moment’s notice. The numbers tell a similar story: According to the Association of National Advertisers’ 2018 report “The Continued Rise of the In-House Agency,” 78% of ANA members had an in-house agency last year, and 90% have seen their in-house operation’s workload increase over the last year, too.
But in-housing does not play out the same for everyone. “No two in-house agencies are the same,” notes McKechnie. “They are built to address a specific business or brand challenge, pursue an opportunity to do better work, reduce time to market or create structural and process efficiencies.”
So how does a business successfully implement in-housing? Adweek spoke with industry experts as well as brands including Clorox and AB InBev for their tips as we put together this guide.
Creating an in-house agency requires staffing said agency, of course. “The first thing you think is, ‘What are we missing?’” says Spencer Gordon, senior director of digital at AB InBev, who managed its internal agency draftLine. “Then we started saying, ‘We don’t have design, we don’t have editing, we don’t have copywriters, we don’t have art direction.’ We started slowly looking at all the capabilities that we needed to add.”
Sometimes, says Gabriel Miller, president, Americas at brand consulting firm Landor, the right fit might come from an unexpected place—such as people without a traditional marketing or advertising background. “There’s a lot to be said for finding those folks who specialize outside of your industry, but know your industry very well,” he notes. For example, says Miller, a designer with a deep interest in cars might be perfect for an automotive brand.
Once you have a team in place, make sure they’re engaged and challenged. According to a report released in mid July by the ANA (in conjunction with Boston Consulting Group and ANA law firm, Reed Smith), which surveyed ANA members and industry experts, keeping in-house agency talent energized was the No. 1 concern of 63% of the respondents. Bringing in guest speakers, holding workshops and having the team work with a variety of in-house stakeholders were among the strategies the survey participants turn to. This dynamic management approach can also help you attract and retain top talent, according to “Managing In-House Agency Creative Content and Legal Concerns.”
Businesses like AB InBev and the Clorox Co. named their in-house operations draftLine and Electro Creative Workshop, respectively, so that they would stand apart from their parent companies. “To us, it was important that it really became an internal agency,” says Joao Chueiri, vp, consumer connections at AB InBev and lead for draftLine. “We didn’t want to sacrifice the quality of the creative work, and to do that, you need to have to hold yourself responsible to the same standards of the creative agencies that work in the market.”
But because it’s an internal agency, the name should also have a connection to the brand. Target’s media-buying arm is called Roundel, another name for the bull’s-eye design that inspired the retailer’s well-known logo, and AB InBev’s draftLine is a nod to the company’s primary product, beer.
“When naming your shop, don’t be lazy,” says Kerri Martin, chief electrofier at Electro Creative Workshop. “Dig deep. Be creative. Look to your historical roots for inspiration. Before we were the Clorox Company, we were founded as the Electro Alkaline Company. That was the inspiration for the name.”
Building a new business within a business means change—change that can affect the entire staff. Take steps to ensure your employees are prepared. “Everybody in the company needs to understand that there is going to be a culture change and a culture shift [as a result of] bringing in new folks from the outside,” says Landor’s Miller.
Be proactive in maintaining a positive, productive environment, both within the new agency and the brand at large. “Culture building is never over,” notes Martin. “It must be fed, nurtured and celebrated every day.”
You’ll want to be just as mindful about your agency partners. “[You need to] understand the dynamics of the existing marketing organization and the impact an in-house team will have on that group,” says McKechnie. “Integrating both teams is critical to the success of the larger organization. The melding of the two allows us to deliver creative that is both innovative and accelerates our brand transformation.”
To avoid confusion about who’s responsible for what, clearly delineate the in-house team’s role and responsibilities versus those of your agency partners. Ideally, in-house operations should handle what agency partners don’t cover.
Unilever’s in-house agency operates at a different level than the company’s agency partners, for example. Because of those boundaries, “we didn’t really have any big culture shock between our external agencies and in-housing,” says Giles Morrison, Unilever’s global vp, brand communications. “It’s been a very natural fit.”
Chueiri says draftLine’s work is primarily more short-term pieces that require a quick turnaround, while the agencies it works with are focused on long-term, bigger-splash projects.
“There was an incentive for us to create a structure and organization to complement the work that our agencies are doing,” he says. “The agencies can focus their work on the big, bold initiatives that you can plan and program. And then internally, we can have that pulse on the day-to-day.”
In-housing doesn’t mean doing everything yourself—it’s important to recognize the strengths your agency partners provide. Every brand and expert Adweek spoke with emphasized the importance of maintaining strong relationships with agency partners as well as other businesses that can boost a brand’s advertising.
Ad tech is one area where you’re likely to need outside help, says Jason Young, chief marketing and media officer of Quotient Technology, which operates several CPG marketing-technology proprietary platforms. “The components required to do this well: You need data, marketing and ad-tech platforms, access to inventory,” he explains. “And you still need a whole lot of services, including creative services, data services, elements of media planning and execution and buying services. I don’t think it’s very likely that brands are going to be owners of their own proprietary ad tech and marketing tech, so clearly they’re going to need to select the right partners.”
And then there’s creativity: If you go too far with in-housing, you might sacrifice the benefits of having an outsider’s perspective. “There is something to be said in being slightly cautious about entirely in-housing your operation,” says Morrison. “In the creative space, you can end up with things going a bit stale.”
Although Gordon believes that all companies should own their own data—“You have to have a direct relationship with your consumer and you need to know what’s going on in the pulse of culture,” he says—external partners still play a vital role. The space is changing so rapidly that it’s nearly impossible to keep pace on your own.
“You absolutely should have people in your enterprise focused on analytics and data science, but that doesn’t mean that you shut the rest of the world off,” says Charles Long, CEO of Centerline Digital, a digital and content marketing agency. “New technologies and methodologies pop up seemingly every week. If you don’t have an outside perspective and someone feeding you what might be better or might be an improvement, you get so stuck in the volume and activity that it doesn’t take very long to get left behind.”
So dedicate your in-house team to understanding first-party data—this is essential for a brand to be “nimble,” says Morrison—and use outside vendors to provide your company with second- and third-party data. And make sure to put a clear channel of communication in place.
“If you’ve got everyone around the same table, you can move much more quickly, you can have more fluid conversations,” Morrison says. “Everyone being together, from different disciplines or different agencies, and the brand teams, the people there who need to ultimately understand and commission what they want to do—having all those people in close proximity is really helpful.”
In-housing is tempting because it’s often a money saver, but cost-effectiveness should not be your only motivator, says Long.
“Just because it looks like it’s going to be a cost takeout doesn’t mean it’s a good decision,” he says. “I think that can be a trap because you can do the math and say, ‘We are going to save this much money,’ but are you? Maybe. The quality of what you create is critical to the cost takeout working—the performance still has to be there.”