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A few months ago an agency I'd worked with years earlier shut down and relaunched as some sort of newfangled tech/ad/consultancy, hoping to get ahead of a trend the owner sees: clients taking their work in-house and away from agencies.
I didn't think much of it, I don't really pay attention to the business side of design etc. But today I saw Honda has done the same thing – https://www.marketingweek.com/20… – and complaining their previous agency was basically taking them to the cleaners.
What do you think? Is the agency model doomed?
I kinda see the same within my world of filmmaking. The past few high-end commercials i've shot the brief was to make it look "home made." No problem, but then at some point those people will realizes (as many already have) that "home made" can be gotten for WAY less then say $100k/shoot day. That said i think it's pretty naive of those guys to assume that what gets views is content's "homemade-ness." If you consider that you get to skip a youtube ad after 4 seconds it takes MORE expertise not less to get the views and the in-house teams simply don't have the intellectual resources to push the idea. I have few friends who run inside teams in med-size businesses and despite good ideas there is always something missing (that shows in limited viewership their content gets). Please don't misunderstand me, i'm not saying that agencies necessarily deliver quality content/ideas but in my experience they DO have access to higher caliber of talent and being the middle man they get to milk their clients.
All good companies already have in-house teams. As people get more social media savvy, even the small guys realize the benefit of design and are starting to build teams to manage IG accounts. And then they realize they can just hire someone to do everything.
This has been going on for a few years now...
- does that matter?Hayoth
- You kidding? Absolutely it matters. Reputation = career = reputationfate
- "I do creative for HONDA sounds pretty reputable to me."Hayoth
- That logo is a giant red flag. The name is a giant red flag. I don't want to put "Engine Room" on my C.V.fate
- There is an agency called Engine, http://uk.enginegrou…shapesalad
- +1 fate This is a big steaming pile of shit.sinjun
Does it depend on the brand in question that determines if an agency is used or not?
What I mean is that a brand like Walmart could get away with in house content that is not of the highest caliber. They are not a luxury brand so they don't have to look like it.
Luxury brands like Rolex or Mercedes might use a higher end agency because the quality of the content has to be in line with the quality of the product.
I started this thread a while back. Feel free to continue the contribution.
But yes, it's a value question and do they want to take on salaries, taxes, people management etc. And it seems they do.
Why wouldn't they?
The in-house teams won't develop all of the content though so they will have a small network of small shops that all participate on certain functions like events, superbowl, product design, etc.
Totally agree Hayoth, this is just the future.
The fundamental problems with in-house:
1) It produces shitty work. Even shittier than a watered down brief. Not that agencies don't also produce shit. But who is gonna say "no" to the boss? Or bite the hand that feeds?
2) CMO's rollover so often. Average tenure of a CMO is 18 months. So you got agencies that have been the stewards of brands for longer than the top brass in many cases.
But it comes down to time, money. In-house is going to be better on those quantitative metrics.
It's a cycle. I remember everyone taking things in-house 20 years ago. But there are numerous challenges there too, from the obvious HR ones, to the creative output becoming stagnant and complacent.
So after a while the grass looks greener and they outsource again. Wash, rinse, repeat.
The best is a combo of both, IMO. A beneficial friction that breeds creativity.
The in-house agencies end up being production houses, the ideas still come from the agencies. We're in a scenario where companies are able to take on a lot more of in-house because the tools are easier to master (and by tools I also mean managing your campaigns, not just designing or developping).
The problem remains talent, no one with the talent to do great work is going to want to work on one product, in-house, all the time.
Places like Amazon have gotten some success buildingagencies inside their organizations but even a company like Apple understands the value of having agencies bring their perspective to the table.
Also when you build an in-house team you will have a more limited range than a well staffed agency, and if all you have is a hammer then everything starts to look like a nail. There's a cycle that's been happening where a company will get a great advertising platform from an agency, eventually start thinking they can do it on their own and they build up their capabilities internally and go off on their own. Then the ideas will get stale, things fall apart and they come looking for fresh ideas from the agency world... wash, rinse, repeat.
Hayoth, to continue on your other thread...
I think we're going to continue to see agencies' business fragmented.
—Media planning and buying has been outsourced as a discrete function for years now. So the media budget is going there.
—Production and design will definitely be outsourced. Dedicated UI/UX shops, design studios, production studios, and freelancers
—Consultancies have always stuck their nose in strategy, and now they're taking away accounts
I really don't see a place for big agencies.
I'm not rooting for their demise. I think agencies have largely been ruined by their holding companies (WPP deserves a lot of the blame for this). And so their output has suffered, and the value they bring has been diminished.
"The problem remains talent, no one with the talent to do great work is going to want to work on one product, in-house, all the time."
Zarkonite I agree 100%.
But most companies don't need top talent. Nor do they probably want it.
They want their logo as big as possible, their circular ads, coupons, budgets for cheesy Tier 3 car ads that shout at the viewer ontop of running footage.
The old maxim always holds true: "Clients get the advertising they deserve"
I believe this conversation should be continued, this could be a real collective insight of this community.
Many of us work for agencies, have side businesses and passion projects. And we know it's changing. We know companies don't want salaried employees, we know recruiting firms suck, we know a lot...We should share it and discuss.
I think the more insight we discover, the more we can apply that to our careers and find a new business model to dominate the world with.
As long as companies need outsiders to tell them who they are, there will be agencies of some sort.
I honestly don't think in-house is the answer.
And instead of an Agency of Record, I think the norm will be (and already is in a lot of cases):
1) A media buying company
2) UI/UX and Design Studios and Digital Studios on call
3) Production companies or direct relationships with freelance Creative Directors, Art Directors, Photographers, Directors, DP's
4) Consultants for strategy
5) And then shit like PR, Event Development, Celebrity or influencers on an as-needed basis.
And that pretty much covers the roles of big agencies right now.
In-house has and will continue to handle the grunt work.
Well, the advertising 'touch points' have and are changing. Before it was a TV ads, press, street posters. Now those don't carry much weight.
Now it's about a good product experience and social media engagement. You could simply launch an app, a banking service for example with zero advertising. You have a slick website, an excellent app and experience from it - you get the ball rolling by being covered in all the tech news, word of mouth spreads your app because it's just so good, you actively engage with people that comment on your social media accounts, etc. No need to for adverts if you have an excellent product and customer service. The viral effect is enough if you're genuine and good. Perhaps advertising comes into it when you want to get that extra 5% of market share when you've been going for a few years and already banking.
Where classic advertising prevails is in the typical multi-national shite products: washing up liquid, nonsense chemical riddled shampoos and clothes washing products. All of which you can by cheap supermarket own versions - and if you check the ingredients you'll see they are 99% identical and work just as well. They need advertising and branding as that's the only different between them and non branded supermarket own products. You're simply buying the branding and advertising when you choose those products.
The other TV advertising/press advertising that is still kicking around is the Stannah stair lifts type of products. You still see TV adverts and newspaper/magazine ads for those. I'm sure that's a creative highlight we all want to achieve.
As a designer/creative I'd rather work with a start up on their product, in-house, or work with a brand that I believe in, as in-house, than at a big agency pushing nonsense FMCG products to the brainless masses.
Beyond the mass of FMCG shite that still get traditionally advertised and the rip off national utilities, you get the Nike's and Apple's etc - with their 'cutting' edge trendy adverts - which is what still attracts talent to the industry, hoping to get to work on such campaigns. But for most of us that have been in advertising, yeah... it was nonsense insurance adverts, instant crap coffee adverts, instant noodles. Not one product I'd buy or truly believed in.
What stops big companies from creating their own in-house agency like Apple does?
Check out these two great articles from Jules Erhardt on Medium.com:
State of the Digital Nation 2016:
Chapter I: Industry Perspective: A look at the what, who, and why of consolidation, Digital Product explained, what lies behind advertising’s existential crisis, and the brewing clash of the titans between Ad Holding Groups and management consultancies.
Chapter II: Agency Perspective: The red hot agency market, the reality behind buying and selling, calling bullshit on the ‘end of consultancy’, the designer’s delusion, and the second coming of the independent studio.
Chapter III: New Perspective: Escaping the agency cycle, finding inspiration and perspectives in the startup studio model and in the venture and own product initiatives of progressive agencies.
Chapter IV: Future Perspective: The blueprint for the next evolutionary step for the studio model... the Digital Product Studio.
and State of the Digital Nation 2020: Venture Road:
Chapter V: Media Crusades & The Death of Agency: Roundup on Consultancies vs Ad Holding Groups, the necessary death of the agency model, changing the stakes, all serve as impetus to explore new paths in venture for the creative class.
Chapter VI: Venture Pathfinding: Pathfinding in venture for the creative class, real talk on agency-venture work, and taking inspiration from trailblazing creatives.
Chapter VII: The Startup Studio & Venture Ecosystem: We journey across the divide and take a deeper dive into the supporting ecosystem for startups, an exploration of the evolving startup studio model, and the opportunity within for the creative class.
Chapter VIII: The Creative Capital Studio Blueprint: Moving beyond the ‘pivot’ model of the Digital Product Studio, taking our learnings into a blueprint for starting afresh... The Creative Capital Studio.
A trend I've witnessed is that large agencies create sub-agencies for bigger accounts. This way they can fire people faster if account goes away.
If you ask me they can all suck my cock. I never work for those toxic environments anymore.