What was Littlewoods thinking of when it devised its Christmas ad campaign? Not the children, that's for sure. As unsuspecting parents and their offspring basked in the festive glow of another Christmas ad break, it blew open the most magical open secret of all, with its ad featuring young children singing about what their mothers had bought everyone for Christmas from the catalogue company.
Sorry, kids, but sometimes brands make ads without a creative agency on board. Confused.com, Gocompare, Ann Summers, Specsavers and Ryanair are only a few of those that also handle creative in-house.
In-house does not necessarily mean low-budget and unassisted, with media agencies and production houses involved on a project basis. None of the brands above would claim a full-scale ad creation capability - Littlewoods, for example, used Contagious Content to produce its Christmas ad. In times that are both cost-conscious and uncowed by media tradition, campaigns with in-house, freelance or other non-traditional routes to market are now more common.
'Creativity can come from anywhere - it is not the exclusive domain of creative directors sitting in WC1,' says Confused.com chief marketing officer Mike Hoban, who writes ad scripts with his advertising manager, solicits suggestions from staff and uses US firm Hornet for animation.
This approach is not limited to attention-grabbing dotcoms, or even characterful, niche brands - although plenty of those, from LoveFilm to Innocent and Burberry to Dyson, assume some or all of the responsibility for their own creative.
Nor is there just one model for the bigger brands, some of which have dedicated ad units. Hyundai launched its commercial agency, Innocean, in 2005; WPP embedded an entire team to create Team Vodafone; Fidelity Investments maintains a 200-strong New York creative department; Apple closely guards the secrets of its TBWA\Chiat\Day-supported Media Arts Lab; and even Specsavers has a 40-strong creative department (see box, below).
It adds up
The movement is widespread, and there are several reasons why any brand might join up. Its management might feel that its product is compelling enough to stand alone, with minimal trickery; or it might believe the brand or product too small, unique or inherently creative to require the attentions of an ad agency.
When a survey conducted in 2008 by the US Association of National Advertisers (ANA) found that 42% of ANA members had established internal advertising units, cost was given as the primary motive. There is no reason to suppose that UK advertisers see things very differently.
'If a client can do as good a job without an agency, they shouldn't use one,' says Bartle Bogle Hegarty managing director Charlie Rudd. 'We work with Google, which does work itself, as well as using agencies like us. It has world-class advertising talent internally, but likes to get an outside perspective. For Google, that's a very effective mix.'
Google's in-house creative unit, Google Labs, last year hired VCCP executive creative director Steve Vranakis, to boost its creative credentials.
Rarely is an in-house arrangement a total rejection of the ad world. Many 'in-house' ads deploy proven external talent, such as Specsavers' use of directors, including Another Film Company's Jeff Stark, and GoCompare's relationship with copywriter Chris Wilkins and art director Sian Vickers.
The agency world has its own view. The in-house ad has long been a subject of Soho scorn, even if such initiatives predate the modern industry they seek to bypass - soap manufacturer Lever Brothers, for example, founded Lintas, or the Lever International Advertising Service, as an in-house resource in 1899.
Littlewoods 'pester-power' Christmas ad generated negative headlines late last year. Creative agencies would argue they would not have let the advertiser make the same mistake.
'An agency can draw on lots of different experience to make a client's work better, because it operates in lots of different categories,' says Rudd.
Attracting talent, he suggests, may be another problem: 'Most creative people in advertising want to work at agencies because they get a broad perspective and are able to work on lots of different things.'
Some brands maintain a balance of control and outside perspective by managing quick-turnover work in-house, often to a template created by a freelance expert, while bringing in assistance for big projects or long-term branding.
Videoand game-rental service LoveFilm has never been lured by a major agency, although that is not to say that it manages all its own advertising.
'I go to all the voiceovers,' says hands-on co-founder and chief marketing officer Simon Morris. 'I found the music for the last ad - a cover of Higher Love by James Vincent McMorrow. I get involved in selection and edit from early on. But I have worked with Creative Partnership, a specialist shop, for all of LoveFilm's life, and it has added, created and developed too. I also use an agency to develop some more brand-oriented work.'
One 'in-house' agency that has never been accused of losing its creative edge is Channel 4's unit, 4Creative. Working both commercially and on its parent broadcaster's behalf, under creative director Tom Tagholm, it produces 1200 trails a year and is still one of the most-awarded agencies in London, as well as the only one to have won eight consecutive D&AD pencils.
'Looking at the 4Creative model from the outside-in, it probably looks slightly strange and unworkable, but actually, for a variety of reasons, it offers the best creative process I have ever come across,' says Channel 4 head of marketing Sarah Owen, formerly of creative agency BBH and the BBC.
'Everyone who works at 4Creative is a Channel 4 employee, so that means we are departments working together to find the best and most impactful creative work and there is a better understanding of our strategy,' she adds. 'Because of the way we are built, we tend not to be too internally focused.'
4Creative is structured much like an external agency, albeit leaner than some. Although it brings in external specialists, Owen estimates that 90% of its work is generated internally. Its model apparently appeals to ITV, which last month pulled its £7m creative account out of BBH with a view to beefing up its ITV Creative team and doing the work in-house.
Changes are also afoot at Sky, which recently moved group brand marketing director Robert Tansey into the new role of executive director at Sky Creative. The team works internally and with third-party brands through Sky's advertising sales house, but is believed to be looking to strengthen links with the rest of the broadcaster's business.
Taken as a whole, this diverse picture appears to signal an ongoing shift, not so much in brands' attitude to advertising, as in the way they use the ad world's services. The in-house model for brands, no matter how established, is not set in stone - witness Gocompare's decision, revealed last week, to call a creative agency pitch.
The majority of the best ads continue to come out of a mutual relationship and chemistry of understanding between brand and agency. While the likes of Specsavers are winning plaudits, agencies will be grateful that not all brands have as extreme a view as Ryanair.
As the airline's spokesman delicately put it once: 'We are driven by price and we don't need a bunch of ponytails in some ad agency to tell us how to build our brand.'
HEAD TO HEAD
Specsavers tackles agency perceptions of in-house creative strategies
Robin Garton (right), creative director, MBA: Before Specsavers, what was your experience of agencies?
Graham Daldry, creative director, Specsavers: I have worked in all sorts of agencies, including big London agencies and regional ones, so I came to Specsavers with quite a good understanding of how they worked, or didn't. Setting up what is effectively an agency here, there's been a bit of trial and error, (but) we have managed to build a team that dovetails very well into the company.
Specsavers is a unique business. It is an independent company, it's not quoted and it's very entrepreneurial and innovative. To be frank, I'm not sure a lot of clients would support a creative agency and allow it to have creative freedom the way Specsavers does. I have certainly known plenty of brands I wouldn't trust to do something like this.
RG: How have you structured your in-house agency?
GD: We've had lots of creatives come over from London agencies and feel very at home here, because it's pretty well what you would expect to find in any good agency. There are 40 of us in the creative department, and within that we have a graphic design department, a digital design unit and a production department. Then there's what we call the 'concept department', which has teams of copywriters and art directors that work together - our 'ideas factory', if you like.
RG: Do you feel an agency might not get its head around your products in the way you can?
GD: There's some truth in that, although I think good agencies understand clients' products. However, working in-house, we do have the privilege of working very closely with the marketing and product teams here, and get a good understanding of the brand's strategic needs and how it operates in the market.
RG: Being close is one thing, but how do you keep your perspective on the brand?
GD (right): We are not separate from the rest of the business, but operate independently, to the extent that we are based in a different building. We work very closely with Specsavers' 70-strong marketing team.
RG: Is it a question of saving money by bringing creative in-house?
GD: It's obviously more cost-effective. I can't tell you to exactly what extent.
NEED TO KNOW
How to manage in-house creative
Mike Hoban, chief marketing officer, Confused.com
Great work comes from a great brief, irrespective of whether you use an agency or not. So, (as a brand that manages its own advertising) the first job is: get the brief right. The second is, learn the framework of how great advertising works. It has to be entertaining and the brand has to be integral.
Third, creativity can come from anywhere in the organisation or outside, because the fourth thing is: find good partners.
Even if you create advertising internally, you will use external partners to execute.
In our case, that's an animation house and our media partners. Find good ones and involve them in the process.
Whether you use a creative agency or not is a relatively minor point if you get those other things right.
I have no philosophical or dogmatic aversion to working with agencies. It's about the requirements of the brand. We don't abdicate responsibility for the brand to an agency. Equally, we are prepared to use them if we need to.
1 - Full service
Brands such as Specsavers (see box, page 26), Apple and Fidelity Investments maintain a full creative function in-house, calling on outside talent as required. Expect high-quality creative executions from the best of these departments, although observers suggest in-house creative units are less likely to be geared to long-term strategic and branding work.
2 - Hybrid
Ideas in-house, execution outsourced. Brands such as Confused.com and Moonpig.com stand as examples of this approach, although it can work in almost unlimited configurations. For its recent The Only Way Is Essex ad, adult retailer Ann Summers worked with ITV2 and ITN on production, but there was no conventional creative agency in sight. Groupon has done likewise in the US, ditching Crispin Porter & Bogusky in favour of in-house creative and unnamed production assistance. Third-party help in such cases may come from trusted, long-term associates or ad hoc hired hands.
3 - The dedicated commercial agency
Channel 4 has one - a genuine commercial agency that sits within the organisation, specialises in the parent brand but works all over town as well. Hyundai did something similar, launching its own global Innocean Worldwide network, which does a lot of car work for one special client but refuses to be described as an in-house agency. It has also worked for FIFA, UEFA and mattress brand Sleepwell. Jaguar agency Spark 44, likewise, grew up around one client, but insists it is no poodle.
LIVE REPORT: BEHIND THE SCENES AT THE IN-HOUSE TEAM
Why do some brands do their own creative work when agencies will pitch ideas for nothing? How do the client's methods differ from the creative process adopted by agencies? And, crucially, can a brand's DIY ad work?
To answer these questions, Marketing visited Optimax, a provider of laser eye surgery, and met James Seton, the senior marketing executive who runs its in-house creative team.
The brand's North London headquarters doubles as one of its 27 clinics. The dark blue staff uniforms and reassuring posters about the laser eye surgery procedure convey an atmosphere of brisk efficiency. If Seton's team want to meet customers, all they have to do is visit reception.
Closeness to its market is one reason Optimax does not employ a creative agency. It believes it would simply be too time-consuming - with no guarantee of success - to educate an agency in Optimax's specialised sector of the medical product business.
An agency would also have to adopt the 'very specific thinking' behind Optimax's ads, explains Seton. Enquiries are the goal and direct-response discipline, including constant testing and rigorous tracking, is key. It has fuelled the independent firm's growth from its foundation in 1991 to become one of the three major players in its market.
In a fiercely competitive environment, the brand's main weapon is TV. Its creative strategy is simple: show the happy patient. The latest ad is a video diary of one satisfied customer lauding the benefits of laser eye surgery.
So long as this ad works, it will run on satellite TV, but there is ongoing A/B testing. If an ad fails, it is dropped. With a testing schedule and budget constraints, the creative process is lean. Seton storyboards the idea, which is developed by the production company. Once the shot list is agreed, the commercial is filmed and edited, with Seton as producer/director.
Over the past four years, Optimax has raised its ads' production values. Seton is keen to keep improving - but, as he says, there are limits: 'This isn't a gorilla playing drums.'
While Optimax does not use a creative agency, it leans on the resources of MediaCom North, which plans and buys its TV time and collects and analyses the response data.
The many people who could benefit from laser eye surgery, but will not even consider it, are Optimax's next target. This means a fresh creative approach: the happy patient has an educational role.
As it continues its drive to grow the market, it seems Optimax's DIY approach is delivering. So long as this remains the case, creative agencies would waste their time pitching.