Indian adlanders have mixed feelings about in-house ad agencies. Here’s why
While one school of thought thinks such agencies help in creative stimulus, others believe it’s just a fancy wrapper to make marketing teams look uber-cool.
Recently, Sudhir Sitapati, the managing director and CEO of Godrej Consumer Products, wrote a LinkedIn post appreciating his newly formed in-house creative agency, Light Box, and shared its showreel. That post travelled far and wide. It caught the attention of several independent ad film directors and production houses on WhatsApp. We hear that it got many concerned because they perceived that such developments will shrink opportunities in an already competitive market.
“It will also change the pricing dynamics. Imagine this: if big budget marketers decide to cover most of their creative work in-house, the outsourced work will shrink. With less work and more creative folks to pitch, it will be nothing but chaos,” said an independent creative director, who works closely with FMCG brands.
However, companies with in-house setups have different priorities. For instance, in an interview with Storyboard 18, Sitapati said team Light Box’s mandate is business growth. Thomas Dawes, who leads Light Box, is not only responsible for the quality of advertising but also accountable for market share and growth.
Success stories of in-house ad agencies keep floating around every now and then. Last year, when ed-tech company Byjus' in-house creative agency won a Silver Entertainment Lion at Cannes for its ‘Master’ Ji campaign, there was a lot of positive chatter, mainly because it delivered quality work. Restaurant aggregator and food delivery app Zomato, known for its moment marketing campaigns, produces most of its work in-house. Rival Swiggy has a similar model.
Gautam Reghunath, co-founder of independent creative shop Talented, has worked closely with brands that have in-house ad units. According to Reghunath, having a client from a creative background is an advantage when agencies want to go all out with experimentation. “They have a similar mindset and also believe brand problems can be solved creatively. It helps in creative stimulus,” he adds.
A few advertising chiefs that Storyboard18 spoke to were also of the opinion that in-house agencies work best when a brand is just starting off or if it is a direct-to-consumer brand. Increasing internal capabilities with in-house teams works for marketers who are focused not only on controlling more of their brands’ data but also on gathering more of that data to create targeted marketing. In-housing can help with efficiency, speed, control and cost. “Most creative agencies are still not equipped to function that way even today. Also, come to think of it, what really is an in-house agency? Isn’t it a fancy wrapper to make marketing teams look uber-cool,” said the former creative head of a network agency.
The flip side
The pandemic accelerated the ad world’s talent drain as employees sought better pay packages, work-life balance, and growth opportunities in startups that were setting up in-house setups. However, that didn't go well for many. A high-profile startup hired 15 creative professionals from various agencies. Some of them even got a hefty salary of Rs 30-35 lakh per annum. As the company’s funds dried up and the category started contracting, the team size was halved.
Santosh Padhi, chief creative officer, Wieden + Kennedy India, has met many creative professionals in the recent past working for in-house agencies. While their salary structure is way above advertising industry standards, many have portfolios that are unidimensional, he observes. “Culturally, agencies are wired differently. If marketers want to build brands they need agencies. Agencies take time to turn around in-depth narratives and sharp communication lines. That’s how we have functioned historically and that’s how iconic brands have been built,” he says candidly.
Padhi recommends that marketers who want in-house agencies should keep collaborating with external partners to break creative monotony and work on solving business problems with a fresh perspective.
