External Agencies Have Been “Overvalued For So Long”: Inside The Inaugural In-House Agency Summit

The number of companies starting or bringing their agency work in-house grows yearly. In fact, according to the In-House Agency Council, in-house agency penetration in Australia has reached 78 per cent.

Lead image L-R: Jemma Downey, group GM, commercial excellence, Asahi; Guido Derkx, chief commercial officer & co-founder, Storyteq; Jackie Nissen, head of digital product, Youi; Nick Thomas, partner & chief strategy officer, lution.

B&T attended the inaugural In-House Agency Council Summit in the Hunter Valley yesterday. If you didn’t know any better, one could be forgiven for thinking that the time was up for the traditional external creative agency model that has served marketers to this point.

“When the CFO and the CEO can actually see the efficiency that is driven through the team, [they ask] ‘What more can we do? What more can we squeeze? And what more can we exploit?” said Jemma Downey, group GM of commercial excellence, Asahi, in the event’s opening panel discussion.

Her co-panellist, Jackie Nissen, head of digital product at challenger insurer brand Youi, concurred, saying that in-house agencies were perfectly placed to meet the economic and productivity challenges facing businesses.

“It is about focusing in-house and getting true cost transparency, being able to tackle the data privacy issues by having control over [data] and then being able to create efficiencies. That’s why a function like marketing operations is so critical for us to enhance and drive how we operate,” she said.

The In-House Agency Council was set up in 2021 by Chris Maxwell, formerly marketing director of Carlton & United Brewers (CUB) and director of Speakeasy Studio, the first in-house digital agency for CUB and several other in-house agency faces.

It now lists Mel Hopkins, Seven West Media’s marketing boss, Joanna Rose, CMO at Endeavour Group, Angela Greenwood, CMO at Youi Insurance and Mike Connaghan, NewsCorp’s managing director of commercial content and former CEO of WPP ANZ among its Board members.

With many reps from IHAC’s member organisations in the audience, including some from Seven West Media, Adobe, Foxtel and Endeavour Group, much of the discussion centred around the challenges that in-house agencies faced. A keynote talk from Jeremy Jones, the global group creative director for Mailchimp’s internal Wink creative agency and a panel discussion with three members of Canva’s internal creative team, proved instructive.

The classic allegation levelled at anyone who moved in-house is that they would stagnate, become too close to their work and become institutionalised. Jones and the Canva team sought to prove that this characterisation was wrong.

“What’s really big for us is we foster a safe place for creativity to thrive, so we can do the best work of our lives,” explained Jones.

“We do all of this by making things, lots of things, not just ads. But things that add value and inspire.”

Jones went on to explain that the Wink in-house agency’s work is split across three main verticals: Core, More and Explore. The Core work is website design, internal comms, product development work and internal “swag.”

The More section, meanwhile, is producing the firm’s digital magazine, Bloom, as well as its involvement in Pride marches or experiential activations. The Explore work sees the agency express some of its “absurdity” through a video game, a series of t-shirts created with metal band Mastodon and the “Small Mall” it created to showcase products from MailChimp’s small business customers in the real world.

The Canva in-house creative team, which now stands at 120 people, was voted the Australian In-House Agency of the Year at the recent IHAC Awards. The team there explained that there was simply no point in working with external agencies as they needed people who actually used Canva.

“We were hiring people from agencies and trying to appeal to them with the free food. But, once they started to join, everyone was like ‘Oh, I want to work with this person or I’ve heard about this and I want to work with them.’ Suddenly, we were growing and growing,” said Kinal Ladha, a creative director within the team.

“We found that it was just easier work building a team in-house because we needed people who were really familiar with the product. There was a moment in time when we did try to liaise with external agencies and we still do, we love working with externals, but no one knows the product better than the people using the product every day.”

Nissen added that Youi was also doing far more in-house because of the “control” it gave the brand over cost and data usage, saying it was “absolutely critical” that it knew what was being delivered and what was being shared outside the business. However, it does bring in external agencies for “big bets” such as the brand reset it is currently undertaking.

Downey, meanwhile, said that the “cumbersome, expensive retainer model” was a thing of the past.

“Traditional agencies, whether it is creative or media, need to evolve because you can hire strategic and creative guns and other specialists in the market without having to go through an agency,” she said, explaining that the firm had a freelance pool of talent.

“There’s a big opportunity for this group to actually trade secrets and really look at the resources that we can share,” she added.

Guido Derkx, chief commercial officer and co-founder of marketing automation platform Storyteq, added that there was “no incentive” for traditional agencies to change.

“They’ve been overvalued for so many years,” he explained, adding that generative AI and other automation tools were going to allow in-house teams to produce work previously only achievable for agencies with large workforces.

Is the world changing for external agencies? It was clear to us that the 70-odd attendees certainly felt so and believed that external agencies needed to do more to meet the growing expectations and competencies of in-house teams.