Last week, Diageo ended its 15-year relationship with BBH, announcing plans to move two of its major creative accounts, Bailey’s and Gordon’s, in-house for the next 12 months with no plans to pitch for a new agency.
At the same time, giffgaff announced a new agency model, which will see it adopt an “open-source approach”, working in-house and with different agencies depending on its needs.
It claimed an industry first after it enlisted the help of its customers to create its latest marketing campaign. They had input on every aspect – from the script to voiceovers, the creative idea and written copy. The campaign was led by giffgaff’s in-house team, with collaboration from Lucky Generals, Riff Raff films, Champions of Culture and Canada London.
Speaking on giffgaff’s new agency model, Tom Rainsford, brand director at giffgaff, said: “Collaboration is more important today than ever before and keeps us honest, grounded and authentic. During this process we have also worked with a range of different people, some individuals, and some small independent agencies, each bringing their own view and expertise.”
The moves from Diageo and giffgaff come after the latest report from digital agency authority SoDA showed that advertisers are rapidly taking digital work in-house or reducing the size of their digital agency rosters.
The research, conducted by Econsultancy, showed that 27% of companies claim to work with no agencies, more than double the figure from 2014, while only 12% of brands had four or more digital agencies this year, down from 21% in 2014.
The number one reason clients cited for ending relationships with agencies was that they were “outgrowing their agency’s ability to deliver against their needs”.
However, according to Richard Robinson, managing partner of Oystercatchers, which helps agencies and brands create efficient models for partnerships, this research, along with the recent moves by Diageo and giffgaff, may not necessarily indicate a trend for clients to want to take their creative in-house, but rather a desire to get closer to their consumers.
“What we are seeing is CMOs and marketing directors questioning the marketing models they have and some of the golden rules that exist within them,” he said.
“Time is now the competitive edge, and [brands] need to speak to [consumers] in real time.”
He adds that brands such as Skyscanner do all of their creative in-house and have no need for external marketing thanks to programmatic, while Airbnb and Uber have “grown up in the post-digital revolution” and have “put marketing at the heart of the brand”.
“The growth you’re seeing in brands moving digital in-house is from the Ubers and Airbnbs who have had creativity from day one,” he says, adding that for most brands who may think it’s easier to get closer to their clients by moving creative in-house, efforts are likely to be short-term.
He adds that 18 months ago, TK Maxx decided to once again seek agency support after taking its creative in-house.
“They had reached a stage where they needed to increase their levels of creativity, and [looking outside] has been successful for them,” Robinson says.
Diageo and giffgaff are the latest in a line of brands who have re-examined the way they work with agencies in recent years.
Last month, P&G announced it would cut its agency roster in an effort to drive savings in a move it said would help “improve creative effectiveness and operate more efficiently across all agency types worldwide.
Rival Unilever has also focused on driving efficiencies in the cost of producing its advertising over recent years by continuing to increase its digital ad spend while significantly cutting non-working media spend – production costs and agency fees.
While the moves by P&G and Unilever were largely due to financial pressures, they are also indicative of the changing world of marketing where traditional models, many of which were developed before the age of digital, no longer work.
“The exciting thing is you have marketing directors and CMOs who are challenging the norms of legacy marketing models,” Robinson says. “P&G are challenging a lot of the norms that you find in the marketplace that have built up over time.
He adds: “There’s no reason why an agency can’t fulfill that, but they need to think through the challenge. They have to reincarnate the way that they currently deal with their client’s business.”