Executive Summary – Monthly Recap:
The decision by Ford Motor Company, the nation’s seventh-largest advertiser, to walk away from WPP as its sole agency partner after 75 years was big news. Nearly half of the account is estimated to be leaving WPP and will be handled by BBDO. The brand has been reported to be seeking $150 million in annual efficiencies. This is a big win for Omnicom and a major blow for WPP, which for years claimed Ford as one its largest clients under a dedicated unit called Global Team Blue (or GTB), headquartered near Ford’s offices in Michigan, and with 3,000 people in offices around the world. It was originally set up as a multiagency dedicated entity called Team Detroit that was formed in 2006, including JWT, Ogilvy, Y&R, Wunderman, and Mindshare, before being rebranded GTB. Such a radical move is significant, with Ford’s reported spend having been $4.1 billion in 2017. The territorial battle inside Ford is likely to go on between Omnicom and WPP and other independent firms like W+K.
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Newsworthy reports and recent developments:
At AMS, we approach the agency management discipline as four distinct but complementary practice areas – Talent, Work, Financials, and Performance and Value— which is how we categorize the following developments:
TALENT: securing the right talent and resources
In-house agencies are still on the rise, with more than two-thirds of advertisers now having some in-house agency capability. The top services that have moved from external agencies to in-house departments have been content marketing, social media, and influencer marketing. Top reported benefits of in-house agencies include cost efficiencies, better knowledge of brands, institutional knowledge, dedicated staff , speed, and nimbleness. Even Ford Motor Company, as part of a global marketing operations restructuring, created in-house marketing positions previously handled by WPP’s team, Global Team Blue (GTB). Managing partnerships—in-house or external—has never been more critical: check out the newly introduced Agency Management eTraining offered by the ANA.
- Per the Association of National Advertisers (ANA) report “The Continued Rise of the In-House Agency,” 78% of its members have an in-house agency in 2018 vs. 58% in 2013 and 42% in 2008. 90% also work with an external agency. 44% had their in-house agency established within the past five years, ranging from strategy, creative for traditional media, creative for digital media, and media planning/buying. 30% have in-house programmatic buying capabilities and 70% have in-house video production capabilities. Overall satisfaction with in-house agencies is high at 79%.
- The ANA is launching its inaugural ANA In-House Agency Conference March 13-15 in Orlando, Florida to share practical ideas for both establishing an in-house agency and running one more efficiently, leveraging insight from brands like Nationwide, Clorox, Verizon, Bank of America, Walt Disney Parks and Resorts, and Electronic Arts.
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