The prediction.

As most of you know, I am a twenty-year “agency guy.” I believe in what outside agencies can do for clients, as I’ve seen it first hand. There’s certainly no denying that the best advertising campaigns today are produced by outside agencies.

However, here’s a bold prediction: The great agencies of the future will be in-house. There, I said it.

For those unfamiliar with the ad business, an “in-house agency” is unlike an external advertising agency (like you see on Madmen) in that it resides physically within the walls of the brand that it serves. Many companies have in-house agencies  with wide ranging capabilities. Some use outside agencies of record for the brand work and maintain in-house agencies for the retail, quick-turnaround stuff.

The out-house. Or is it?

The knock against in-house agencies has always been that, well, they suck creatively. In-house agencies are allegedly where washed up agency talent goes, or, worse, where aspiring agency employees must go because they aren’t talented enough for the “big show.”

Since I left the “big show” last year and started my own flavor of the future, Ideasicle, I’ve worked directly with in-house agencies (see AMD case study), and I’ve come away surprised at my own perception/reality gap. The elements that make up that gap, coupled with several favorable forces out of their control, could enable in-house agencies to become the best, most creative, most authentic, and most effective agencies of the future. But only if they play their cards right.

Here’s why the future could lie at the feet of in-house agencies:

Clients have never been smarter.

When I started out, clients didn’t have MBAs or research departments, and they weren’t nearly as in touch with their consumers as they are now (e.g. twitter, Facebook, etc.). Today, outside agencies push their own proprietary strategic processes and people, but in-house agencies already have all that, or close to it. This leaves the In-house agency well equipped to formulate and evolve their own marketing strategies.

The in-house agency lives the brand.

I’ve always had an issue (one that I hid away in the back of my mind all these years) with the tendency of clients to hire outside firms for the single most important, intimate, personal job in the entire company: Defining, articulating, and romancing the brand. Outside agencies certainly do their due diligence, like interviewing the key executives, talking to customers and maybe even working retail to get a feel for the brand. But it’s still just a feel. Compare that to creatives at an in-house agency, who enjoy an insider’s view. They are far more likely to understand the brand authentically and as it really is, day-in and day-out. And it doesn’t cost anything to get the in-house agency “up to speed.” Ever.

Brand consistency.

We’ve all seen it. A new agency of record is hired and the entire brand changes. Sometimes that’s needed, but often, particularly in today’s “brand accountable” world where brands “speak” to their customers via Facebook and Twitter, brand consistency is paramount. Unfortunately, agency/client “relationships” are hardly marital commitments, which means the brand can expect many wildly different brand articulations as they rifle through agencies. Outside firms have good intentions—they want to “build the brand”—but not before they destroy the old brand first. And what suffers? Yup, the brand and its relationship with customers. 

In-house agencies are more willing to outsource.

When an outside agency outsources a project, they lose revenue because they typically make money on staff time. Since in-house agencies are the client, there is no reason to impress, no need to pretend, no existing revenue sources to satisfy. Smart in-house agencies keep their core expertise intact, outsourcing specialties they don’t have in response to opportunities. As I’ve seen many times with Ideasicle, in-house agencies have no problem bringing in outside perspective, or in our case ideas, when they need it. But only on a project basis. It’s the modern way. And it’s fiscally sound.

Lastly, the poor economy benefits in-house agencies.

Thanks to a poor employment market, in-house agencies can snap up amazing creative people that outside agencies have let go not because their creative chops fail to delight, but because the outside agency needs to make its numbers. My prediction for the future success of in-house agencies goes nowhere without this one. Of course, in house agencies better pick up this talent quickly or my friend, Erik Proulx, will inspire them to change careers with his “Lemonade” movie.

Again, I am not slamming outside agencies. Right now they are the place to go for world-class creative thinking. But there’s a Cinderella story emerging here. In-house agencies sense this; they are organizing through the In-house Agency Forum, sharing resources, sharpening skills and inspiring each other with best practices.

All of which should only accelerate their emergence from the out-house.

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