Matthew Carlton
Dec 5, 2013

Agencies divided on in-house production vs outsourcing

Technological evolution means companies have to decide whether to produce their own work or outsource to specialists.

Agencies divided on in-house production vs outsourcing

In-house or outsource? Asia-Pacific agencies are split on which way works best. On one hand, increasing numbers of agencies choose to outsource to digital specialists, leading some agency powerhouses to launch global production arms. However, keeping production under one roof, albeit figuratively, is far from a dying tactic. 

It is an approach Ogilvy still uses, with a full team of TV commercial and video-content producers, and a joint venture with Hogarth Worldwide. With four production teams in the region, and another six planned by the end of the next quarter, the agency’s commitment to the in-house approach is clear.

Broadcast production head, James Brook-Partridge, firmly believes this option yields the best results: “Work kept in-house is more likely to be consistent with a brand strategy, the brand values, look and feel, and marketing objectives than work outsourced.”

COMMENT Outsourcing allows agencies to focus on creativity
CASE STUDY Bonds have more fun

One of the challenges for in-house production units is earning the trust of creatives and ensuring the quality of work carried out is visible. However, outsourced production units can turn this on its head and appeal to creatives, says Victor Knaap, CEO of global digital production company MediaMonks. 

“Advertising creatives need to be able to think; informed by mediums and technologies, but free from their unique liberations and limitations,” he says. “Dividing the work in a way such as this allows for the creative freedom to shape an idea that excels across all mediums — from TVC to print, and mobile to big builds — while playing to the unique strengths of each.” 

While the allure of outsourcing and consolidating entire marketing services to a single market sounds promising, it is often quite disruptive for the client, says Fred Schuster, global CEO of McCann Worldgroup’s production arm Craft Worldwide. 

“It’s paramount to understand the individual client’s processes and needs first in order to outsource only the appropriate execution,” he explains. “To maximise efficiency, we partner our resources, both near and offshore, directly with local resources as if they were an extension of their team.” 

While connected to McCann and the Interpublic Group, Craft is open for business with other agencies. However, it does not work directly with advertisers. 

Naturally, Knaap is an advocate of the outsourced model, which benefits from the speed of technological evolution. “An advertising agency’s digital concept may be better suited to HTML5 than Flash, thanks to its cross-platform capabilities,” he says. “However, an agency’s in-house production team would need to rebuild its entire production flow to support responsive, cross-platform, HTML5 builds without dropping the ball, before pioneering their concept.”

With greater variety of client work requests from numerous media types and platforms, such as content, interviews, how-to and corporate videos, the pros of staying in-house outweigh any cons, says Brook-Partridge. “We are able to provide more value as we are more integrated into the overall creative development and ideation process, and are not adding extra mark-ups and costs into this process.” Other advantages include reduced response times and a more direct route to the client, particularly if the work is tactical or just needs simple changes, he adds. 

The insourcing versus outsourcing model seems to go in circles and one side is currently in vogue depending on who you listen to. What is clear from both sides is that the pace of production requests and need for delivery is accelerating due to constant changes in the media and digital landscape. The need for large volumes of video and online content with short lead times and lower budgets is unmistakable, with both sides claiming their approach provides the best results. 


COMMENT Outsourcing allows agencies to focus on creativity

Todd Hancock, Asia-Pacific CEO, Tag Worldwide

I think there are two main trends in the production area. Some of the larger agency organisations obviously have production elements within them, but we find they are still outsourcing.

The smaller and medium-sized agencies find that outsourcing allows them to concentrate on creative content; it allows them to be much more flexible and to really focus on being creative for their customers.

So we are seeing more small and medium-sized agency partnerships from a production perspective.

For agencies it is all about being creative. If I join an agency it is because I want to be in a creative industry. To a purely creative person, a lot of the production elements may be considered menial tasks that don’t make best use of my creativity.

Outsourcing enables agencies to concentrate on the creative piece. It also reduces costs because they do not have to pay agency labour rates.

Overall, outsourcing gives me a team that is production-oriented, meaning I can focus my time on my core business, my management effort and they can take care of the things that aren’t central to my business.

Additionally, if I am outsourcing I can stretch my workload as required, while if I use internal production I have some flexibility, but not a full team working on production. This could slow down my turnaround times.

We have a number of collaborations with companies like Mother where they want to focus on the front-end creative piece of their business and leave that production element to us, which makes for a good collaboration.

Having been on the other side of the fence, in-house production has become a less flexible situation and a higher cost situation for me.

I’m definitely an advocate of the decoupling between the creative and the production sides.
I have not come across many situations where the results of keeping it in-house with an agency are anything more than neutral, but generally I see that with outsourcing there is a benefit for the agency and the customer.


CASE STUDY Bonds have more fun

W+K Amsterdam needed to make its James Bond Skyfall campaign for Heineken live beyond the TV campaign, and tasked MediaMonks to handle the digital production elements.

The agency had to create an experience that moved smoothly from film to interactive, with high-end personalisation on social media and seamless loading. The large team had to work flawlessly in creative, design, film, post-production and development for the global roll-out.

Everyone wants to be James Bond, and the campaign, ‘Crack the case’  put the user in the middle of the action, picking up where the TV ad tantalisingly stops. The user progresses into a PoV interactive film with beautiful Bond girl Severine as a personal minder. Players who impressed her with their powers of deduction earned premium personalised content to share with their social circle.

The project launched in more than 70 countries, including eight in Asia. It hit KPIs across the board, and the mix of high-impact and low barrier to entry stands out as an example for new digital campaigns for Heineken’s many brands.

 

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