The industry can embrace the in-house model, says DDB’s Kate Sterling

Lindsay Bennett
By Lindsay Bennett | 11 June 2018

Optus, CommBank, CUB, Foxtel and other big brands are moving bigger slices of the media or creative business in-house, with budgets usually dedicated to agencies now moving closer to home. 

As a result, agencies are revaluating how to best add value to their clients, but DDB Melbourne managing director Kate Sterling says the industry can’t fight the rise of the in-house model.

“I had a client ring me recently who wanted my advice on what I think of a hybrid model and we spoke about him potentially hiring internally for some of the things we’re already doing as a client. And am I going to tell him to put everything through us? No,” she says.

“I think the hybrid model will absolutely continue and so it should and I believe it can help agency relationships rather than separate them.”

The client, which Sterling couldn’t reveal, was considering taking community management, social and programmatic in-house.

“As opposed to being defensive, I know it’s about solving an operational challenge together and figuring out what’s going to build our relationship, as well as set his team up to deliver more work,” she says.

Sterling, who joined DDB Melbourne a year ago, admits it will result in a slight reduction in revenue for DDB, but it shows the expanded remit agencies can offer clients, offering their consulting services on bigger business challenges.

“For me, it’s a good demonstration of the different kind of relationship agencies are having with clients these days. It’s not just about solving communication problems, but operational challenges together,” Sterling says.

“I wouldn’t be surprised if the likes of community management and social went more and more in-house. I think the value from an agency is to be able to strategically lead the business from an outside brand perspective.”

This consultancy-like service is something that DDB is increasingly offering to clients, advising on how clients can best set up their internal offering.

“We’ve seen a much greater reliance from us in Melbourne to help educate, inspire and train businesses to get up to the level they need to be, through workshops, information sessions and training,” Sterling reveals.

Setting up in-house agencies for clients presents a huge opportunity for DDB, she adds.

“I wouldn’t shy away from entertaining that at all. I think it’s about adding value and investing in long-term relationships,” she says.

“There’s still an opportunity for agencies to do more around helping organisations take on board this digital transformation.”

The in-house agency may have been labelled a threat, but Sterling believes clients still need external partners and believes the hybrid model, of the in-house agency and creative agency working together, is one that is better suited to the evolving industry.

“I’m not worried about the future of agencies,” Sterling says.

“Sometimes the challenge with businesses is they try to do it all in-house and they lose perspective of what’s going on in the real world.”

AdNews spoke to Sterling last week about her first year at DDB Melbourne and how she's restructured the business for growth.

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