What you need to know:

• Former CUB Marketing Director and Connections Director Chris Maxwell says CUB made huge gains in efficiency and speed over external agency partners when the brewer created an in-house production and media unit in 2017.

• More brands this year will swing to in-housing as they reconfigure their external agency arrangements.

• Nick Garrett says Lution’s outsourced model for in-housing allowed brands to tap a huge local and global pool of senior “special ops” creative and strategy talent who have left large advertising networks.

• Maxwell says In-housing allows brand owners to retain IP, learnings and talent rather than external partners landing the benefits.        

Garrett, for instance, will remain working and advising brands in his other consulting business in Australia and internationally, along with leading Lution’s Enhanced Creative Panel, which draws from senior local and global creative talent who have left the big agency networks and are now working in special ops and projects.

Garrett told Mi3 agencies still have a strong, albeit different, future – but face significant pressures, mostly because holding company investor imperatives crimped their ability to re-engineer business models five years ago when it was clear structural pressures were coming to a head.

Maxwell is of a similar view after the frustrations CUB experienced before investing in its in-house marketing services unit.   

Brands reverse 'capability bleed' to agencies  

“I’ve experienced the transformation that came from the traditional way of working with external agencies, big agency retainers and lots of different moving parts to bringing programmatic media, digital content and social in house,” says Maxwell. “It was revolutionary for CUB. It took us from being five years behind the curve to probably five years ahead of the curve really quickly. 

“One of the other frustrations that came with outsourcing all the work was, as a [CUB] business, we weren’t getting any better,” Maxwell says. “We were kind of stagnant in the level of digital capability we had because the people who were doing the work and learning and getting better were all outside the organisation. The way to address that was to start bringing more of those learnings and those capabilities back into the business.”

Maxwell says turnaround speed and cost from external agency partners were points of increasing tension for him. 

“Most of the big agencies have wonderful people working for them,” he says. “But when I was at CUB, we would work with a business like Clemenger and there were times where we wanted to maybe do a hygiene piece of content. The process to do that was the same as the process to make a big, expensive TV ad and the time frames were similar. I know clients all around Australia and the world have those same sorts of frustrations.”   

30% rate improvement for programmatic media

Similar challenges existed in media too for CUB, Maxwell says. In-housing CUB’s programmatic media buying from its media agency (PHD was appointed after digital media went in-house) quickly saw a 30% rate improvement. Why? “It’s hard to put your finger on whether it’s that we avoided some of the costs that were hidden in there, or whether it was just that we had more dedicated people who were more focused and were able to target better and manage the tools. It’s probably a combination of those things.”

But it is not all about cost. For all the upside Lution’s partners argue lie in brands taking more traditional agency capabilities in-house, Garrett warns that an obsession with efficiency gains from marketers will negate progress.

'Unhealthy balance': Efficiency versus effectiveness 

“There is an unhealthy balance in the in-housing conversation at the moment around efficiency not effectiveness,” he says. Unsurprisingly, it’s why Garrett has assembled a global coalition of senior creatives who will feed into marketer-funded in-house agencies. “You can sense in the industry a coalition of the willing from ex-agency network creative leaders who are going small and independent. What we’re doing doesn’t replace agencies but they have been under heavy scrutiny for five years. It is the moment where those forces of transformation are happening at a faster pace. Brands can go in-house and get access to tier one talent who aren’t beholden to the major networks.”         

Betfair buys in

Maxwell says there a numerous brands in Australia considering in-housing models but could not name them because of non-disclosure agreements. Betfair Marketing Director, Nick Thomas, however, was one who publicly backed Lution’s approach which saw the company in-house creative, production and media.  

“As a result of the early value and insight the team were providing over and above the scope of the brief, we subsequently agreed an extended program for them to design our data and martech infrastructure to support the internal agency and growth agenda,” Thomas says.  

Stay tuned for an Mi3 in-housing podcast with marketing, agency and in-housing leaders in the coming weeks.