Traditional ad and media agency models are under pressure – this everyone knows. But while some executives are nervously looking over their shoulders at the tech giants and consultancies, the in-house agency model is also shaking things up.
According to the Association of National Advertisers, nearly 60 per cent of clients used in-house capabilities for part of their advertising or media needs in 2013, up from 42 per cent in 2008. And 56 per cent of clients with in-house capabilities have moved assignments in-house from external agencies.
Oliver chief executive and founder Simon Martin is hoping to capitalise on this trend, creating dedicated in-house agencies for the likes of Starbucks, Vodafone and KPMG. He tells City A.M. about his firm’s business model, and why content is crucial.
What’s the logic behind placing staff in-house with the brand?
The logic is to build a level of intimacy and understanding of the brand that you simply don’t get with the traditional model. It’s also about reducing the communication time lag between us and the client – being in a dedicated, on-site agency means we can work together on things like real-time marketing, allowing us to do more things, faster.
Why is the dedicated in-house agency model increasing in popularity?
Clients have many more media channels now, and far more data available. They can touch consumers in so many different ways, but the trouble is that their competitors can as well. So the ability to be able to test and execute quickly is a real differentiator for brands. Agencies need to realign themselves to this changing consumer landscape, and that’s the foundation of our business model.
How else do you see the agency model changing?
I think the way agencies charge is a key area. Clients see the service differently these days, and what they’re willing to pay for has changed. Metrics measuring the return on investment have played a big role, meaning agencies need to focus on resource management. It’s also key to factor in creativity, especially with the rise of content marketing. You’ve got to be able to dramatise the message and make it cut through to the audience.
How far can content marketing go? Will brands become content houses?
It’s an incredible way of creating engagement with brand objectives. Unilever, for example, has a very powerful message about its drive to make the world a better place. But it needs to dramatise that message. You can’t just put it up on a billboard – the impact would be nominal compared to a beautifully crafted piece of content, like the recent Dove Sketches piece. I can see brands becoming content factories for their consumers in the not-too-distant future.
But surely consumers will be resistant to branded content past a certain level?
Absolutely, but we don’t know where the line is yet. There is a conflict between something that is naturally created, and something that is planned, or overtly designed to influence a consumer. But if we start drawing the lines in advance, there’s a danger we miss an opportunity. We just have to be intelligent, and treat consumers with respect. If it looks like we’re reaching the limit, we’ll need to recognise that.