The Changing DNA of Marketers & Ad Agencies

It started innocently enough. Marketers have long maintained small internal Audio/Visual rooms for below-the-line jobs and corporate videos; Ad agencies have similarly maintained tiny editorial suites for creating client reels and new business pitches. They were useful, expedient, “nice to have” – and where grunt work reigned supreme. The really important external work was never a consideration for the in-house department. Whatever creative and production crumbs came their way, they were happy to take on and toil away dutifully as one would in a boiler room. Sexy work need not apply.

 

But then something happened while everyone was staring down at their iPhones…suddenly marketers and agencies found their mass audiences developing an insatiable appetite for content!  And this appetite for content needed to be fed through a seemingly endless array of websites and social media platforms, with immediacy unparalleled in human history. Marketers expanded their agency rosters, ad agencies expanded their supplier rosters and the legacy systems for churning out a reasonable number of TV, print and digital deliverables crashed under the weight of unreasonable amounts of content making up the “new normal.” Necessity once again became the mother of invention.

To their credit, the leadership within marketing organizations and agency holding companies have responded exceedingly well to the dilemma by investing smart money into in-house solutions – an approach that wasn’t entirely obvious when considering how far the A/V departments and Edit Suites were from bringing sexy back! Like Olivia Newton John’s Sandra Dee character in “Grease”, the shy, retreating girl next door was unimaginable as the leather-clad greaser goddess before her transformation – and yet in retrospect it made all the sense in the world.  In their efforts to remake the pedestrian into something extraordinary, marketers and agencies put their money where their mouth is: capital expenditures for renovating entire floors within their offices, purchasing high-end digital post-production equipment, increasing headcount and budgets for new creative and production talent to steer these new internal vessels into the brave new horizon. Of course, bringing post production capabilities in-house also meant bringing in new revenue streams that had previously been spent out-of-house with third-party suppliers.  These new sources of income help with the bottom line, but they can also be reallocated for more creative and media – a smart way to continually feed the content beast.

The move toward in-house creative and post-production doesn’t come without its political minefields, however.  For example, asking Creative Directors to start using in-house post production to finish their Cannes Lions-level content initially was like asking if they’d eat in the cafeteria versus their favourite five-star restaurant – which was an accurate analogy at one time. But if you’ve hired the chef, bought the ingredients from the farmer’s market, matched the décor and funded everything required to duplicate the five-star experience, it’s harder to justify not giving the place a try. And so in-house functions once shunned for shinier objects outside are having their day in the sun.   

Today the biggest names in global marketing are showing the way for the industry as a whole:

PepsiCo launched The Creator’s League as its In-House studio. “It’s really about pushing the boundaries for content creation and monetization and distribution,” says Frank Cooper III, Chief Marketing Office of Global Consumer Engagement.  “Why rent when you can own?”

Apple’s hiring of Tor Myhren, former creative director of Grey Advertising, to lead their new in-house agency as VP of Marketing Communications; the agency is purported to grow to 1,000+ employees and marks a departure from their decades-old relationship with TBWA/Media Arts Lab.

Facebook’s in-house agency called “The Factory” was built for speed, according to Marketing Chief Gary Briggs. “We're constantly introducing new apps and new features, and a large amount of time that I spend is in product marketing. So, you want your agency to be tight with the product managers, and you really only get that when they're in the hallway." Considering that Facebook’s external agency is perennial creative powerhouse Wieden+Kennedy, that’s quite a statement that should demonstrate that no agency is safe from the forces of nature within the ad business.

On the agency side, MDC Partners’ 72andSunny, Interpublic’s FCB Chicago and Omnicom’s BBDO New York have all built robust internal production and post production studios in order to keep up with proliferation of content required by their clients.  For their part, the transformation has meant an essential change from operating small internal rooms for marginal business needs to the powering of large in-house post production units that are mission critical to agency survival. With both marketers and ad agencies bringing creative, production and post production capability and functionality (not to mention new revenues) in-house, it becomes something more significant than just an emerging workflow trend: It’s a change in the DNA of organizations. This new creative-production-post DNA operating inside of marketers and ad agencies represents a redefinition of supply chain management – it’s a change from content creation to value creation. Marketing dollars previously spent out-of-house become reallocated for more creative and media. Traditional roles are being shed, new strands of DNA are replacing dying breeds and the result is the creation of a new species of marketer: more skilled in creating content, more knowledgeable in critical functions and more capable of surviving as companies in the world in which we all now live.  And ultimately that is great news for the advertising industry.