Agencies Make Their Internal Counterparts Better, And Vice Versa

More corporations are taking some of the responsibilities previously handled by their public relations and advertising agencies back in-house. Regarding PR agencies, it’s no longer breaking news that many clients have taken their social media activities inside. But a recent report by The Association of National Advertisers (ANA) says that the expansion of in-house marketing and marketing communications capabilities includes bringing creative strategy in-house as well – a red flag for ad agencies.

A few highlights from the report (courtesy of Michael Lee and his Forbes.com article, “Can In-House Agencies Ever Be Great?”):

• About 60 percent of the clients who participated in the ANA study say they are using in-house marketing capabilities vs. five years ago when 42 percent reported the same;
• More than half of the clients polled say they have taken assignments that were traditionally the responsibility of their agencies back in-house;
• 40 percent brought creative strategy in-house, which as Lee points out “has been a key agency capability and attraction to clients,” and
• Almost 70 percent run their social marketing programs in-house.

For those of us experienced enough to have seen the rise and fall of in-house agencies, and now their apparent resurgence … well, it’s been an interesting ride.  During my years with once great computer manufacturer Apollo Computer, Inc. (acquired by HP in 1989), I was part of a dynamic in-house marketing communications team that had a level of enthusiasm, sense of purpose, work ethic and urgency as impressive as any agency I’ve seen since.

The team was as big as some small to mid-size agencies and included:

– Up to nine PR pros handling all corporate communications, all media and industry analysts relations and support at events and trade shows.  We didn’t call it “content development” then, but the PR team was largely responsible for developing a significant amount of the marketing content, from by-lined articles to white papers and speeches to press releases and customer success stories.

– another half-dozen or so copy writers, designers and other creative people.  All sales literature, customer brochures and product sheets, other promotions, themes for trades shows and employee conferences, etc., all done in-house. While there was an advertising agency on retainer, that agency acted as an extension of the internal team.

– a significant events team produced and set up every trade show, from negotiating trade show booth space to overseeing the unions setting up the booths on the showroom floor.

All were part of the same team and reported into the same management. It was a great model that worked at the time. Despite its great run, however, a similar model today would have more disadvantages than it does advantages.

Lee makes the point that an in-house agency works “right at the heart of a brand” vs. agency staffers who are outside looking in.  Somewhat sarcastically, he calls power, influence and control the “eternal Corporate Aphrodisiacs.”  And he’s right.  

But at the same time, in-house agencies can be at risk of becoming too internally focused. For those of us who have spent any amount of time on the client side, we know that the eternal meetings, time spent building consensus, bureaucracy and politics can chew the days and weeks away and relegate the creative process to the back burner.

One of the greatest advantages of working with an outside agency is the broader, external view and opportunity to learn from the campaigns of the agency’s other clients — best practices and also the campaigns that went bust, so what not to do.  In addition, agency people make it part of their business to know what’s coming around the next corner, marketing trends and new technology platforms that can help propel a client’s campaign.

And finally, an agency team makes the internal team stronger and vice versa.  An ambitious and competitive agency team can push an in-house team to stretch outside its comfort zone, and the best in-house teams will respond in kind.

What do you think? Do external agencies make internal teams do their best work?

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For Agencies, Working with Clients on a Shoestring Can Be an Acquired Taste

It’s not entirely new for global PR firms like Ogilvy PR and Edelman, among others, to make a run at emerging VC-backed companies who need communications help but are on a shoestring budget.  Every few years — either just before a so-called bubble, like the dot-com boom or right in the middle of one — big firms seem to act on the fact that they may be missing out on opportunities to work with potential rising stars.  Or, that they are simply leaving money on the table and have the resources and chops to chase many of the same prospects that have typically been the domain of boutique and mid-size firms.

Why not? At the turn of the last century, global firms did pretty much the same thing to take advantage of the plethora of VC-backed emerging Internet companies.  For example, a number of firms owned by communications holding companies like OMNICOM and WPP created so-called “conflict brands.” With a conflict brand in place, a global PR firm who had a company like HP as a client might also take advantage of the opportunity to work with an emerging VC-backed company that was actually competing with HP in one market or more. The conflict brand would have a different pricing and staffing model, different value set, a less is more approach and firewalls in place — all of which made them appealing to smaller, emerging brands.  But clients mailed their monthly retainer fees to the same address as did clients of the parent brand.

In other cases, a global shop would set up a sub-branded firm (a firm within a firm) that wasn’t necessarily set up to handle conflicts but did specialize in working with start-ups. These sub-branded firms, as did the conflict brands, had stronger appeal to the start-up technology segment — I.E., working with a cool, fast-moving edgy firm vs.  a more bureaucratic, stodgier parent brand.

Of course, the plan was to transition the small client from the sub-brand to the parent as the client grew and thus keep it in the portfolio for the client’s entire life cycle — from start-up to growth to maturity.  To be honest, it’s hard to say how successful this model really was as so many of the dot.com companies were acquired or blew up without every having the chance to reach maturity.

Recently, Ogilvy PR introduced Espresso and just before that Edelman introduced Sprout – offerings specifically designed with the little guy in mind.  (Love the names by the way…surprised a firm hasn’t selected “Adrenalin” yet though.)

Edelman says “Sprout supports early-stage start-ups and small companies looking for communications counsel and high-impact support outside of the common agency business model.”  Like programs before Sprout, Edelman “scales” a program to suit a client’s needs and budget (I’m sure Edelman is finding that the “needs” and “budgets” of some of these start-ups are misaligned).  Ogilvy PR says its offering for emerging brands “includes a range of services from brand narrative and messaging through media exposure and influencer relations, all within a simple, affordable and flexible cost structure.”

Both descriptions do contain a lot of big agency speak and PR clichés (which may scare away some start-ups).  We’ve all seen too many times selling points like “scale” and “high impact” and  “brand narrative” and my fav:   “affordable and flexible cost structure.”

But the programs, in light of the big well-known PR brands and deep resources behind them, will earn their share of success – at least in the short-term.

Time will tell if in the longer term they’ll beat the boutiques and mid-size agencies at what they do best.  If they do, I’m sure we’ll hear about it.