Intel proves threat of in-house is overstated

Lindsay Bennett
By Lindsay Bennett | 6 December 2018

Once the poster child for running a successful in-house agency, Intel has gutted its internal creative agency in a move that industry commentators suggest could prove that the threat of in-housing is overstated.

The rise of in-house models has been a common topic across adland with a report from the ANA suggesting that 80% of clients are exploring some sort of in-housing of creative or media services.

But TBWA CEO Paul Bradbury said it's still yet to be proven that in-house agencies can create big creative moments.

"We've obviously seen a number of classic failures, Pepsi springs to mind," he said, referencing to the now infamous Kendall Jenner spot that has to be pulled after social media outrage.

"Clients should, and will, always have some in house creative/design and production capabilities. However many clients have learnt the hard way that creativity cannot just be transplanted. Creativity needs the right culture, leadership and commitment to thrive."

Intel's in-house shop employed roughly 90 people with around 60 people cut and the agency name, Agency Inside, to be retired. It aligns with a marketing shift focusing less on consumers and more on B2B.

Bastion Collective founder Jack Watts said often a change of leadership in the marketing department will see the millions invested in an in-house model go to waste.

"Often the decision to insource an agency starts small – we are spending a lot on design, lets hire a designer. We are doing a lot of video production, lets take on a videographer. One designer becomes a full design studio, one videographer becomes fully-specced edit suites, add top end creatives and suits and before you know it you have insourced millions of dollars of wages. Someone new comes in and blows the whole thing up," he said.

"The key considerations for brands insourcing or outsourcing their marketing agencies are the ability to scale (up or down), access to the best talent and achieve the right level of service and output."

Aussie brands such as Optus, Foxtel, CUB and Virgin have built in-house offerings some at the expense of agency relationships. While the big end of town may be exploring in-housing, DPR&Co co-founder and principal Phil Huzzard argues it's not always the answer.

"I remember being on a safari in Botswana and marvelling at how perfect every impala was. It dawned on me that the imperfect ones had become part of the food chain. It’s a universal truth that when you protect a species, you weaken it. Take an agency in-house and watch it lose its mojo," he said.

"Smart clients know it’s the job of a good agency to push past what the marketing team wants and fight for what it believes to be right. That’s harder by factors when you’re in the same management meetings."

Will we see Australian brands reverse their in-house offerings? Email lindsaybennett@yaffa.com.au with your thoughts.

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