By Ted Nelson, CEO, Mechanica and Ken Volk, Senior Director Creative and Brand at Kronos
Article Takeaways:
- In-House Agencies may be on the rise, but 85% of them still outsource work.
- Agencies should not resist the change and look to forge closer connections with In-House Agencies for maximum impact.
- In-House agencies are not where creatives go to die.
What do Allstate, Progressive, Hershey, E*Trade, and Clorox all have in common? They all have significant in-house agencies (IHA’s) that work in close collaboration with external agencies to meet their marketing needs. And while industry angst and hand wringing about the rise of in-house agencies can still be found, along with celebrations of perceived external agency “wins” – see Pepsi’s Kendall Jenner fiasco – the reality is that internal and external agency relationships are growing and here to stay.
Now certainly, traditional agencies are still a vital resource to brands and their in-house team, with most in-house agencies (85%) still outsourcing functions. But still, the in-house movement is fast becoming the new standard.
So, what’s the fuss about on the external agency side of things? As the CEO of an agency and head of an IHA who have worked together in close partnership for 7+ years, our perspective is that if we’re being honest with ourselves, the rise of in-house agencies is one of the best things to happen to big brand ideas. Why is that? Well first, quite simply because any big idea needs to play out across all paid, earned, owned and shared channels and touchpoints to achieve maximum impact.
Thus, when an external agency is leading the charge for a big paid media concept, it takes the kind of insider knowledge, organizational and brand insights only possessed by in-house agencies to fully deploy and activate a creative idea across all consumer touchpoints.
In turn, when the IHA has developed the big brand idea, they are often looking for external agency expertise to offer a unique creative perspective or to help drive a specific channel or strategy need they may not be well resourced for. In either scenario, any agency that is serious about forging meaningful connections between brands and consumers should welcome the power of a close partnership with strong in-house creative resources.
Take YUM! Brands’ KFC and their recent “Rudi” and “I Love You Bacon Burger” campaigns. Both are successful campaigns praised for concept and execution resulting from the close collaboration between the in-house agency and Wieden + Kennedy (Rudy) and Mother (I Love You Bacon Burger)
From our experience in 7+ years working together, to create the type of partnership that will result in a big idea fully realized, a couple of things have to be recognized in order to diffuse the stigma and open the doors wide for collaboration:
In-house agencies are not in opposition. There is an unspoken impression that in-house agencies oppose working with outside agencies. In actuality, it’s our collective experience as the head of an agency and the head of an IHA that this is rarely the case because our interests are in fact much more aligned than not. We’re both recognized and rewarded, financially and emotionally, for big ideas fully realized across all touchpoints. As in any true collaboration, where the idea actually originates and how it ultimately manifests itself is a very blurry line indeed. And when you have a long-standing partnership that has navigated growth during multiple marketplace transitions, that sense of shared responsibility grows even deeper.
Like most IHA’s, Ken’s team at Kronos uses multiple external partners to execute big ideas when resources are scarce, or a speciality like media buying or video is needed. For Ken, whether an agency is a strategic partner, or a freelance designer is extending their in-house capacity, they view every member as part of the team. And with that view, the external agency is never in competition. Unless, as Ken notes, “You come in trying to tell us how much more you know about representing our brand than we do, with an ‘external agency’s know best’ attitude. We don’t have time for it. We value your insights; we want your big ideas and we look forward to your ongoing contributions. But we don’t want any of it if it doesn’t start with the recognition we come from the same DNA.”
In-house agencies are not hotbeds of creative hacks. There used to be the idea that agency folks went to in-house agencies to die. But, in recent years, we have observed more high-level creative talent heading to work inside of brands. And this is part of a very productive creative cycle. A cycle that started because some IHA’s were already doing award-winning creative thinking. This and other reasons started an influx of top talent from external agencies. And, as you can imagine that spawned even more exceptional creative thinking emanating from in-house agencies. All, in turn, keeping top IHA talent in-house and attracting even more external talent. Jackie Jantos, the VP of Global Brand & Creative at Spotify, spent nearly seven years at Ogilvy before making her first jump in-house to Coca-Cola. Most recently Publicis’ Chief Creative Officer, Nick Law, left to join Apple’s team. We don’t imagine that this creative loop of talent will end any time soon, which is good news for both external and internal agencies. It means that we will have more creative partners on the brand side who have lived in agency shoes, and who may be more willing to help brands understand the nuances that do differ between in and out-of-house and how we can all collectively thrive in this environment.
In-house agencies are inherently more in tune with a brand’s core reason for being. It cannot be stressed enough that being connected directly to the brand is one of the main draws for great creatives to be in-house. IHA staff are in the meetings where a business strategy is developed. They’re in the hall chats with the CEO. And the best IHA’s are surfacing issues only they and their partners can solve before outsiders would even observe the need. With this constant access, they naturally know how to navigate the internal sensitivities and approval processes of a brand, especially when speed, and possibly budget approvals, are of the utmost importance. This makes partnering with In-house agencies crucial in this area, where they are often the first approvers or key collaborators, they can shepherd a creative idea to life, internally, through their experience and knowledge of who the internal champions, or naysayers, are, and how an idea could benefit across departments and functions.
No matter who you are – a traditional agency, an in-house agency, or a consultancy – every entity should go into a project considering themselves as a valuable partner and a creative collaborator. You can see the proliferation of in-house agencies as a threat or you can see it as an opportunity to work with an amazing creative partner. Most agencies need more resources and a better understanding of brand touchpoints, and most in-house agencies are understaffed and need support at various levels. If external agencies start looking at IHA’s as opportunities to collaborate, both parties will begin viewing each other as inherent partners built to complement one another. And that’s more productive as well as being more fun. Because what’s not to like about more creative collaboration at the end of the day?