The Big Debate: Ad Agencies vs. In-House Studios & The Rise Of CMO’s

December 8, 2015
lee clow

by Benjamin Potter | Creative Director, CLICKON Media

Panic continues in the advertising world as more brands drop their agencies for in-house studios, handing power to the Chief Marketing Officer. In fact, the fear is so great that AdAge are publishing articles with ad executives slamming the cataclysmic shift.

With so much debate, we decided to explore whether ad agencies really are necessary today or whether savvy CMO’s are the future.

POWER TO THE BRANDS

The best brands in the world are proving that advertising agencies are not the answer. The likes of Red Bull and GoPro have sparked a revolution with everyone and their dog thinking they can build in-house media studios capable of producing amazing content, thus bypassing the need for a creative agency.

One of the hottest topics of Vidcon this year centered on the current state of branded content and where it is going in 2016 and beyond. Many leading brands are working directly with MCN’s while others are creating in-house agencies to create ongoing campaigns and build sustainable communities.

Some of the top brands have followed in Red Bull’s footsteps. Purina, Marriott and Pepsi have formed creative teams either in-house or with influencers – essentially shutting the door on their agencies. Purina fired several of their agencies prior to working with BuzzFeed on native ad campaigns which earned them a ton of great press while bypassing expensive agency fees.

IN DEFENCE OF ADVERTISING

Lee Clow, the chairman and global director of TBWA/Worldwide, has a different view on the matter. In a recent interview with AdAge, the brainchild of the historic “Think Different” campaign for Apple spoke in defence of advertising.

“Lots of clients want to put you in a box. Particularly in this day and age when digital agencies and media companies have been separated from the ad agencies. They all kind of claim their distinct territory and want advertising agencies to kind of stay in their little lane and not try to branch out and do other stuff.”

According to Clow, the separation of creative agencies and media buying agencies has taken advertising down a dark road.

“It was a mistake when ad agencies spun off the media functions. Media thinking is so much part of the creative thinking that it was a mistake, and I think you’ll see them ultimately come back together.”

This has led to the rise of the Chief Marketing Officer who is taking control of a brand’s advertising strategy. Clow is skeptical about the phenomenon.

“These people that show up and decide they’re going to change everything and stay for a year and a half and then leave after they’ve made a big mess. Most of the clients as they come up, the new young ones — now that I’m old, they all seem so young — I don’t think they even have any history of understanding of how brands are born.”

While the likes of Red Bull, GoPro and Pepsi have created powerhouse brands through in-house content marketing, there are far more brands out there wandering around not knowing where they’re going. So…

ARE CMO’S REALLY THE ANSWER?

david beebe David Beebe, Vice President, Creative & Content Marketing – Marriott

CMO’s experiment aggressively and work closely at the HQ with a team of savvy digital natives. While they partner with smart agencies, many of these agencies play a supporting role in the overall CMO’s vision, removing strategy that was once so important to the traditional ad agency.

But how creative can a CMO really be?

CMO’s have just as much access to social influencers, production expertise and niche channels as anyone else. The symbiotic relationship between brand, content creator and audience means everyone can benefit, as Purina have demonstrated with BuzzFeed.

However, there is a common knowledge in the creative sector that the best minds do not work for brands; rather they work for themselves or for the best agencies. Selling one’s talents to a brand is like selling your soul to the devil. Whether that is true or not remains a mystery.

CONCLUSIONS

The CMO plays a pivotal role in any progressive brand’s strategy, but as Mr. Clow points out, there is too much poor content marketing done by in-house agencies to make a claim that advertising agencies are irrelevant. At CLICKON Media, we are sometimes horrified by the direction we see brands been lead down by over-zealous CMO’s who genuinely believe they have the marketing hand of God. The truth is, most CMO’s don’t.

The best brands usually have a savvy in-house creative division that works in collaboration with agencies that understand strategy. After all, agencies are able to draw upon case studies of clients that have got it right, but more importantly, those that have got it wrong. This objectivity is often crucial.

Low finished off his damning opinion of CMO’s when he extended the notion of objectivity to the fact that agencies aren’t constantly looking for promotions, unlike those in the marketing departments at companies.

“I’ve felt my whole career that my ambitions for the brand … probably exceeded the ambitions of the client we were working for—particularly when you’re working with an ad manager or some CMO that doesn’t meet with the CEO more than every six months. … You’re usually caught in the circumstances where the person you’re trying to sell a brave ‘Holy shit, nobody’s ever seen an idea like that before’ idea to doesn’t want to lose his job and probably just wants to get promoted.”