Roy Levine had lots of offers to leave the agency world during his nearly 30 years in the advertising business, but he never did. “I love it,” says Levine, whose career has included stops at BBDO and Rain (formerly Rain43), as well as building his own purpose marketing firm, Purpose Global.
Early this year, however, Levine launched a new company that many in the agency world might regard as a direct threat to the model they’ve nurtured and protected for decades.
Agency Inside is designed to help marketers implement and develop their own in-house creative agency. Levine doesn’t believe his company represents an attack on the old model; instead, he says, the old model was already irreparably broken.
The Agency Inside vision is inspired by the industry’s growing use of freelance talent. In short, if agencies are going to pull in hired-gun creatives to work on client projects, why can’t the client just create its own agency team and work with those creative guns themselves?
His view about the state of the industry today reflects the increasingly vicious cycle of modern-day marketing: marketers and agencies alike are under pressure to control costs—agencies use more low-cost junior talent, calling on freelance help when needed—this less experienced talent can’t match senior talent output—client frustration increases.
Out of that mess comes growing interest in creating in-house agencies. The evidence has been mounting: last fall, the ANA—which just completed a three-day conference on in-housing—reported that 78% of its members had some form of in-house agency in 2018, compared to 58% in 2013. Forrester recently reported that 64% of companies have in-house agencies, “a dizzying 52% increase since 2008,” it said.
Proponents of in-housing says it helps get work done faster, thanks to its use of a core team of creative experts who constantly have their finger on the pulse of the marketer and the brand. But there’s also no denying it’s a model predicated on cost containment.
Among the most high-profile champions of in-housing creative work has been Unilever, which reportedly found €500 million in savings—in a total budget of about €7.16 billion—by moving work to its 18 “U-Studios” around the world ran by Oliver Agency.
Dave Carey, Canada country manager for Oliver Agency, unequivocally states that Oliver can save a marketer, on average, 30% on what it is paying traditional agencies.
The savings come from less overhead—the staff work in the client office—and clients pay only for what they use. In Canada, aside from Unilever, Oliver is currently working with Manulife, WestJet and Swoop, he says. While he won’t name names, he says Oliver has also been talking to “five or six” other major corporations—”some of the largest companies in Canada,” he says—that are contemplating in-housing.
The Oliver model does not replace external agencies entirely, says Carey, but is designed to complement them. “This is about execution,” he says. “When there is an AOR agency, they often come up with the ideation and then we execute across the entire brand.”
Similarly, Levine believes that most in-house agencies will be able to handle much but not all of the required creative output. External agencies will ultimately handle between 20-30% of the work they currently do, he says. “It’s an estimation, based on our own discussions with clients about the nature of the work they are outsourcing.”
According to Levine, in most cases external agencies will retain oversight of big brand platform, omni-channel work. “The giant budget stuff… where you need a huge range of resources and specialized thinking and objectivity,” he says.
That objectivity is one of the key concerns about being too focused on in-house creative, he says, pointing to the infamous Kendall Jenner/Pepsi debacle as an example of how it can go awry. “You need someone who is outside and not involved in the politics to say, ‘No this doesn’t’ feel right and here’s why,’” he says.
Levine and a small team will work as consultants, creating a business case detailing what the marketer needs and how to do it. The client will then be given access to a technology platform hosting a large toolbox of resources capable of helping with everything from workflow to creating briefs, to information on best practices and emerging trends, right through to finding talent. “The portal will have standard forms, templates and contracts for hiring freelancers,” he says. “The vision is we are giving [marketers] access to the same group of people that agencies have access to.”
Any organization that is paying more than $250,000 in agency fees per year could see some benefit from taking some of its business in-house, says Levine, although he says the sweet spot for this type of service is $500,000 and up.
If the in-house agency is comprised of more than five or seven people working full-time on creative, they’ll likely need an in-house creative director of some type. “Somebody who, if they are not a former creative director, can be responsible for creative quality control and in some cases creative development,” he says. Once that role is in place, the team can then tap into the large pool of qualified freelance talent that exists in the market today.
There is no shortage of qualified people, says Levine, thanks largely to the continued layoffs of senior creative talent. That, combined with a growing number of people who have become disenchanted with the current model, has led to a deep pool of creative talent eager to take on freelance assignments.
“For the last four years, I have been running an agency that basically uses this model, where I bring in specialized talent on an as-needed basis,” he says. “I took that model and adapted it to work for clients.”
In-housing is a perfectly rational response to the larger forces impacting the industry at all levels, says Levine. “The world is changing, I am really just empowering what is going on out there.”
Some of those forces—such as a growing focus on performance marketing, metrics and data at the expense of big brand work—will shift back, and big ideas will come to the fore again, he says.
“Creativity solves business problems and big creativity solves big business problems,” he says. But increasingly for marketers, that big creativity may come from down the hall and not across town.