An in-house shop is not an outhouse

The creative consultant on how brands can build successful internal agencies, and the role external agencies need to play.

When PepsiCo pulled a spot starring Kendall Jenner last year that seemed to trivialize the Black Lives Matter movement, the debate about the quality of in-house agencies’ work began to fester.

Industry critics were quick to point out that the food and beverage giant did not tap any of its roster creative agencies for the idea, but instead relied on what Pepsi referred to as its "in-house studio." The main criticisms, which have some validity, are rooted in the belief that in-house agencies cannot attract or develop world-class talent, nor can they be objective about their brands’ products and services.

The truth is, many CMOs have been running successful in-house shops for years. Prudential’s in-house agency is 20-years-old, houses more than 80 people, works with Droga5, and considers their relationship symbiotic based on their needs at the time. Verizon’s in-house agency now employs 150 and meets daily with external partners like McCann. They are an extension of each other, often sharing talent and ideas as partners.

Brands say that in-house agencies better understand a brand’s intrinsic values, are more cost effective, and offer greater speed to market. These, too, are valid points.

When creative folks throughout the industry say "agency," we mean it in the fullest sense of the word. A full-service agency works within a clearly defined scope of work, develops the brand strategy alongside the CMO or brand managers, and is accountable for its billable hours. It can ideate and innovatively execute creative ideas, and it can do all of these things whether it is part of a client roster or the in-house shop.

Many clients already have what they refer to as "internal creative services," which, in my experience, is nothing more than a sausage factory that completes endless rounds of work from everywhere in an organization with no process for accountability or metrics for success. Scope of work is ill defined, and there is never a penalty for extensive revisions. (External agencies charge out the wazoo for revisions.)

Such an entity is not an agency; it’s a dumping ground that gets less respect than Rodney Dangerfield. The drive-thru approach in such places creates unengaged employees who wait for a whistle to blow at the end of the day so they can yell, "Yabba dabba doo."

I believe brands need external agencies to work with their internal agency, as long as the latter is built and runs like a real agency. When both entities are well managed by the brand, and work together, the result is a creative product that has an impact on the popular culture while driving revenue.

Here are some guidelines for building a real agency in-house and managing its relationship with the roster shops:

  • Give your In-house teams the credibility and autonomy they deserve. Making the shop a separate entity with some gravitas goes a long way in motivating and inspiring performance.

  • Streamline your agency roster and have them work directly with your internal group. Set presentations together, have a clear scope of work for both. Burn the silos and create cross-functional teams led by stakeholders in every department and develop the metrics for success.  

  • Start an internal awards show. The best way to motivate creative people is by having their work acknowledged and appreciated.

  • Analyze the pain points within your current agency roster. Develop a scope of work for the internal agency that supplements the external partners and alleviates those pain points.

  • Develop an org chart of hybrid talent needed to optimize your workflow. Hire an experienced creative director to run it. The best CMO’s hire creative directors with portfolios they admire who also have strong business acumen, someone who has had a seat on both sides of the table. That person can manage the internal and external work by motivating creative people; buying the best ideas and helping the CMO sell those ideas throughout the organization.

Not all creative people can manage a brand from the inside. The hardest part is realizing the sun doesn’t rise and set on the creative product. Marketing is a big part of the client universe but not the center. Product, operations, sales, HR, PR, and engineering run the show as they ladder up to EBITDA.

Finally, a big benefit of an In-house agency is the ability of staffers to walk down the hall and make something happen with the media director. Media strategy has become the most important part of the marketing mix. You have infinite ways to spend a budget but not an infinite budget, so plan accordingly.

Mickey Paxton is a former SVP, ECD at Cablevision and JWT and is currently a creative consultant.

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