Chris Maxwell - Inhouse vs agencies & the future of marketing operations - S5 Ep15

Speaker A: Hello. Uh, bonjour M? Ni hao Comes estas? Welcome to Champagne Strategy. Listen to this episode if you dare, but you've been warned. There's no going back. Welcome back to the show. In this episode, I sat down with Chris Maxwell and he's the founder of Lucian, a leading voice in modern marketing. Transformation to unpack. One of the biggest shifts happening in the industry right now, the move from traditional agency models to in house creative and media capability. So what does this matter? Well, the way brands operate is fundamentally changing. Chris breaks down why some of the world's most agile and culturally relevant companies, brands like Liquid Death, Sports Bet, even Coca Cola are all ditching the old school agency model in favor of hybrid or fully in house teams. And more importantly, how doing that gives them speed, cost efficiency and a much tighter feedback loop on what's actually working. You'll learn why in housing isn't just a cost cutting move. It's more about aligning incentives, owning your data and building creative that can move at the pace of culture and effective to the bottom line. Chris also busts the myth about talent and quality, reveals what role should stay with agencies and which shouldn't, and what tools and operational structures are needed to make it all work. If you're in marketing senior leadership, even at an executive level, or just trying to figure out how to things up in an AI fueled content heavy world, this episode is packed with everything you can't afford to miss out on. If you don't learn something, you haven't been listening. So without further ado, ladies and gentlemen, Chris Maxwell. Why is it called the champagne of beers though? The Miller High Life. What's all that about Miller?

Speaker B: It's an American brand back 20, 30 years ago. It was theoretically produced as a step up from standard beer, so from, from the Miller Genuine Draft or Miller Light brands. It was like the crown lager of Australia, if that makes sen. And I worked for Miller 15 years ago, 20 years ago. So it was kind of that first jumped into my mind. But uh, turns out, turns out you can't get them in Australia and you can't get them anywhere because they've completely discontinued the brand. So maybe not so relevant anymore. I'm having a coffee right now, but I'm very happy to cheers you with a coffee.

Speaker A: Uh, I've got a bowl of water so we'll both be hardcore. What was interesting. So just coming off the back of that world marketing forum that I attended, some people there were from some larger companies, uh, multibillion dollar companies, one of which was like Sports Bet. And I was talking to the head of Martech there and I, um, was surprised how much they in housed, like pretty much everything except some very select kind of media buyers that they can't get by buying directly. And I was like, oh, wow. If these guys are like one of the big sort of sports betting powers to be in APAC region and they're doing this, like, who else is doing it? And then the more you sort of look around, the more you see very large organizations that are traditionally using agencies now doing a lot of stu in house.

Speaker B: Yeah.

Speaker A: And obviously there's pros and cons with that. But is that what you're seeing as well is, is that a trend that will continue to think of?

Speaker B: Absolutely, mate. And it's a really, it's a fun link that you've made there with Sports Bet.

Speaker A: Right.

Speaker B: So I'll tell you a little story about how I got into the whole world of in housing. And it actually all ties back to Sports Bet, funnily enough, which is a really kind of a fun, fun story. So back in 2016, 2017, I was at Carlton United Breweries in Melbourne, which is the biggest brewery in Australia. And at the time we were owned by a business called SAB Miller, which is a biggest, second biggest beer company in the world. And I was managing our media and digital and a variety of different things. The title was Connections Director, but it was basically all of our agencies, all of our media marketing capabilities, sponsorships, a bunch of stuff like that. And we had a brand in the portfolio called Carlton Draft. And you'd be familiar with Carton Draft. It's a pretty famous brand in Australia. Famous. Probably one of the most famous ads ever produced out of Australia was the Carlton Draft big ad famously produced by that business in the early 2000s. And the tone of voice of Carlton Draff was tongue in cheek. Humor, blokes, footy, sports, beer.

Speaker A: Right.

Speaker B: Um, I was paying attention to what Sportsbet was doing in social media. And Sportsbet had this ability to be on the pulse of what was going on in culture, particularly sport. Like no other brand that I had seen, you know, that things would happen in the cricket or the footy and they would have a social media post up same day. Uh, that was relevant and related and funny and engaging. Right. And I was looking at what we were doing as a brand, Carlton Draft, which again, we had every right to be as irreverent and funny and on the pulse of culture that Sportsbet did. And the way we were managing our, uh, social Profiles at the time was nothing like that, right? We would have very occasional posts and it was all very orchestrated and it wasn't relevant to culture and it wasn't agile and all the things that we kind of know are common these days. And I reached out to the CMO at sportsbet, a guy named Barney Evans at the time, um, and we were mates, our kids went to school in the same place so we knew each other. And I said to him, how come you guys can be so quick and the pulse of what's happening in order to respond to culture and we can't. And he said, I've got an in house content team and I've got an in house social team and these, this team of people, they, they sit in our office next to our brand team and they're watching what's going on in the world and they're responding and reacting and they know the tone of voice and they'll be able to create content like at the drop of a hat and in our world at the time. And remember, this is back in 2016, ish, our world at the time. A social media post for Carlton draft required a brief from brand manager that usually had to get signed off internally and then went over to an agency and that was received by an account manager and that went off to the creative team and there was just this lengthy drawn out process of kind of ideation and development and approval and production and you know, by the time the content came back, it was six weeks later and $50,000 bill was attached to it and it was too late. Like we kind of missed whatever the moment was. We missed it. And so that conversation with Barney and the team at Sportsbit was what sort of tweaked me to go, why can't we do that? Why don't we have as a business and the portfolio of brands that Cub has, it was one of the most iconic portfolios of brands in the country and we had big budgets and big teams and we were working with the best agencies in Australia. Uh, and the question that I had was, why can't we do that? And it was. The answer was the model we were using was wrong. The model we were using was a legacy model that was set up to produce big expensive TV ads and big expensive summer, uh, cricket campaigns and not set up to enable the business and the brands to engage in culture and social and digital channels like, like we know they need to do now. And so that conversation started a journey for me at Cub that resulted in building an in house agency at Cub. Which was a whole internal kind of change management transformation process. But luckily I managed the agency relationships as well as this team. So I was able to kind of coordinate and build this what we call now a hybrid model which was that having in house capabilities as well as external capabilities and helping them work together really well. And so that whole kind of original thought has subsequently resulted in me now founding the business I run now Lucian, which is a consulting firm that helps businesses build and run in house agency capabilities. And then we went and worked with Sportsbet. Right. So now uh, we, you know, I know you talked to Nick Laidler at the team. We've helped them evolve their capabilities around tech and operations and workflows and digital asset management and creative automation. And we're even doing things like creative inspiration and training around AI and automation for them these days. So you know that business is about as forward thinking and leading in this space as any that I've seen. And you're right, they do almost everything in house.

Speaker A: So. So why then do so many companies still rely on agencies? Because like traditionally that was the thing, you couldn't execute things yourself. So everything you did, like your story, had to go through an external agency. That was like many people, uh, obviously Chinese whispers sort of like happens throughout the thing and things get misinterpreted or whatever, there's delays. Like why, why do so many teams still operate that way? Are there valid reasons for having agency or not?

Speaker B: Let's be careful not to set it up as an either or conversation. I really think, I think it's an end conversation with in house and agency relationships. I think they're both evolving, right? And even in the five years since I've been running Lucian, it's evolved even since then. But if I go way back, the reason that the traditional agency model where brands and businesses would rely on creative agencies to come up with their ideas and media agencies to do the strategy and the media buying and production partners to go and make product produce things. That was because at the time those capabilities were infrequently used within the business and what a business might consider non core capabilities. Right. So if you're a beer company, from my experience, you know, your core capabilities are, ah, making beer, coming up with beer brands, selling beer, you know, finance, hr, uh, or procurement, all that sort of stuff. But the idea of making uh, a TVC for example, or coming up with an idea and writing a script, that would happen once a year, maybe, maybe a couple of times a year depending on the business and the brand. And so the concept of having people inside the business who had those skills and capabilities to the level that you would want them to have them expertise. It didn't make a ton of sense to have people inside the business to do that. But if you fast forward to the kind of is you've got this digital transformation and you've got all these channels now and consumers are demanding and consuming content in many, many more channels than they were 15 or 20 years ago when I started in marketing. So the idea of producing content and creative for a brand has gone from well, you need a TVC and some outdoor and a radio ad and maybe some sponsorship and experiential activations to you need to fill up all these pipes with content and often you need to refresh it really frequently and regularly. And then, and then what comes with that is the planning and buying and optimizing of the media channels and all of a sudden the, the work of producing content and creative and managing media channels and community management and optimizing media investments. That's a day in and day out job and a uh, week in and week out job where in the past that was a kind of a campaign based job that would be somewhat infrequent for many businesses. And so that demand which is all come off the back of the digital evolution and the need for brands to be connecting with consumers in so many different channels these days that I don't think that's going to go back. I think that's here to stay. Those kind of capabilities, creative capabilities, production capabilities, media, digital, even marketing operations and the tech and the tools and the automation capabilities, they are now core capabilities. So it makes sense for businesses to have them within the business. With that said, there are some of those capabilities which make sense for agencies or external partners.

Speaker A: Which ones would they be though? Let's get specific because just, just last week I was talking to a client and um, I was like they were paying for blog content with a digital agency, right? Because I think digital agencies like are sort of like the disruptor to the traditional agency network which is more TVCs that are based in media, media buying. The digital agencies came in sort of random, that parade, you know, branded as performance marketing, whatever, um, and then they're kind of getting disrupted themselves by AI. And just the other day I was like we're paying for these blog posts like a lot per month and literally they're worse than what I can get out of ChatGPT in like literally a 10 second prompt. So why are we paying them all this money? So we in house that, you know, that, that thing. But then other things like technical ad management or whatever, that was a bit, as you said, infrequent or a bit more specialized labor that we don't need all the time. You know, we kept that still with them. So what things are you seeing that you know, are uh, better off with an agency versus stuff better in house? I know there's going to change from company to company, but uh, are there some sort of main key points?

Speaker B: It definitely does change from business to business and it kind of depends on how many brands you've got and how much work you do and how much you invest. And there's a lot of variables and factors and that's kind of what we do is we spend our time working with businesses on figuring this problem out. Right, Exactly. What should you bring in house versus what should you continue to work with external partners on? If I kind of go, a good rule of thumb is things that you as a business need to do frequently and core to your marketing performance, bring them in house. Right. Rather than have them at an arm's length where you've got an external agency partner because you want to have one, the people that work on that are really close to the business and the brand, which means they make really good decisions from a brand perspective. And two, there's a level of ownership of the data and the accountability and the performance of the work that comes when you're in house that you don't get when you're with an agency. But there are pros to an agency, right? The pros to an agency are you can get really highly skilled, specialized capabilities that you may not either need or, or be able to afford internally. So if you want a global, world class executive creative director to produce your big campaign for the year, to come up with an idea and direct the campaign, or if you need, you know, a director to work on the tvc, not many businesses have the volume of work that would justify spending the amount of money that you need to get a really good person to do that. Right. So those kind of roles are important to be able to procure, uh, through agency partners or consultants or production companies, etc. And we believe that there's this model called a hybrid model where you can bring in a lot of that work, have the high level strategic thinking and direction for the brand in house, have partners who can come up with your, you know, tier one campaign ideas and work and help you produce that stuff. But then tier 2 and tier 3 and T4 because that's more frequent, you Might want to bring that stuff in house. And then on the media side, a lot of businesses are bringing digital media planning and buying and optimization in house. But traditional media for sure, some businesses do that in house as well. You know, we work with a bunch of businesses to help them do that. But that's one where there is still leverage in working with an external agency who can buy at rates that are, you know, premium to what you might be able to buy yourself, unless you have the volume to justify that.

Speaker A: It's interesting because I'm seeing this in housing trend pick up steam. I came across this, this picture by, I think, Race Kite magic numbers in the UK 2020 through to 2024. Just the trend of like holding company agencies versus independent agencies or the smaller ones outside of those big holding cos like publicists and Omnicom and all that kind of thing. And then how many people are in housing? And in 2020 it was 16% were in house, 44% were independent, 40% were with the hold cos. And then literally the next year, um, you had 11% rise in, in housing like crazy, which is like Covid years. Right. No surprise there. But a lot of stuff kept in house and that's been sort of steadily increasing and the hold cos have been the main ones that have lost market share and it doesn't seem to be reversing. So are you seeing that similar sort of trend? Uh, these are US numbers, by the way, but, you know, everywhere else noticing

Speaker B: the same thing, we're definitely seeing that and I have a theory as to why that is. Right. And I'm interested in your point of view on this, John. So one of the things that I used to do when I was at CB was, uh, I used to manage the media portfolio and that meant we would run pitches. And I was part of many global media pitches and local media pitches and RFPs and sort of got a pretty good handle on the holding groups and the local indies and what the pros and cons and benefits of working with holding groups versus indies and agencies and even in house was at the time. Here's kind of a really simple summary of what I think the media industry has been doing for the last 15 or 20 years.

Speaker A: Right.

Speaker B: An agency, a media agency, in particular the big holding groups will say to a client, you're going to spend a certain amount of money on media promoting your brands. Um, let's say you spend $50 million a year promoting your brands. You can go and do deals with Channel 9 and Channel 10 and Omedia and even Facebook and YouTube and spend that money yourself. That's one way of doing it. But if you give that money to us because we spend $5 billion or $2 billion with those suppliers or those vendors, we've got more leverage with them. We can do a better deal because we're spending more money with them and they're going to give us better rates. That was the kind of the overarching promises. We can buy media better than you can because we have more leverage with the vendors. And then there's the we're smarter and we have better strategy and planning and we've got all these special tech and tools and we can, we can do

Speaker A: it better than you can halo effects kind of thing.

Speaker B: Right, right. That was, they're the two kind of selling propositions. And when you're doing media deals on a human to human basis and you're leaning on a sales guy at 9 or O media and you're saying, I need to get better rates for my client, and if you don't give me those better rates, you know, there's a consequence to you and I'll take the money elsewhere. That is a really valid conversation. I kind of go, yep, that makes heaps of sense that you can do a better deal than I can when I'm spending 50 million and you're spending 2 billion. Right. I get that that's illogical. But in the shift to digital media, uh, when media is bought algorithmically, the idea that the amount of money you're spending has an impact on the rates is actually, doesn't, it doesn't matter anymore. Right. Having the volume and the weight behind you is no longer the leverage that it once was. And actually being closer, uh, to your brand and your target audience and your cohorts and your segmentation and your media investments and being able to optimize them daily and weekly to get more value out of that fifty hundred, $200,000 budget that you're spending on a certain channel. That's better, uh, than the kind of the we're going to lean on you and just force you to give us better rates conversation. Because that just doesn't even happen in

Speaker A: the world of digital.

Speaker B: Right. So as media shifts from traditional and human to human buying interactions towards digital and algorithmic buying interactions, that overarching selling point of big traditional holding group media agencies, that's not as valid as it once was. It still has some relevance in businesses and it's, you know, that's why they're still here and will continue to be Here and obviously all the other things that they do are really valuable. But not only does the fundamental promise of a media agency has that shifted, but the accessibility of being able to buy media uh, directly, all of a sudden that's changed. When you can buy directly through Meta and Google and that's what everyone's doing, you know, or the trade desk for example. And you can, even some of the traditional media vend setting up direct buying capabilities and platforms all of a sudden where you, you couldn't buy media directly as a brand before, now you can. And so that's what you're seeing. You're seeing a lot of businesses kind of going, well, I think I'm going to be able to do as good, if not better a job than the agency has done in the past. And guess what? If, if I own the account, I own the data and I own, I'm able to optimize and I don't run the risk of potentially losing that data at some point. If we change agencies, for example, there's a, there's a bunch of benefits to it, but for sure there's a trend towards more and more businesses building in house media capabilities as well as in house creative and production.

Speaker A: Yeah, I mean I've seen even brands like Coca Cola, with the association with Bain and you know, the AI uh based video production doing that in house as well. So like these aren't small brands, these are like large brands leading the way as well. Um, but yeah, coming back to your thing around the direct buyers versus agency buyers, their sales pitch like hey, you can buy this cheaper through us or whatever. That's a, from what I've seen, that's kind of not true. You can get better rates yourself a lot of the time with some caveats there, you know, some certain large volume buys perhaps, but I think, you know, that used to be the case again. It's, it's like a volume discussion I think. And it doesn't really consider the quality of that buy either because they're, they're just there to make a percentage off the total amount. Right. So they might get you, you know, maximizing your CPMs at the lowest cost, whatever. But then, you know, are they humans? Is that a good quality buy? Very many other questions. And then like you said, you're losing the feedback loop of the measurement as well.

Speaker B: All of that's really valid. And then you've got the hot topic in the industry right now is principal media buying. And really if you boil that down, you go, this is about having aligned or misaligned incentives between the businesses. Right. So my personal view, and I think this is valid, is when you want to work with partners, you want to work with them with aligned incentives. So if you do well, they do well. Right. And that's how that should be. Right. The unfortunate situation in the whole principal media conversation is it's casting doubt over, uh, whether the agency's incentives are, ah, the same as the client's incentives. And that's what's coming under, undermining the credibility of the industry to some extent. And we see that the example you just gave of Coca Cola delivering AI and transformation through that, uh, automation and AI and transformation through that, that's interesting too. Right. So we've been working with a client, um, around building their in house capabilities. And one of the things that they've said to us is part of the reason we want to build in house capability is because the idea of doing things faster and more efficiently will be an aligned incentive for an in house team. It's not always an aligned incentive for an external agency. Sometimes when you're an external agency and you're billing on hours and listen, I've been a client for 15 years, I've felt this. You want something done fast, turned around quickly, efficiently, that is counter to the agency's business model. And many, many clients I know will feel this and know this intuitively that you're kind of like, hang on, I'm paying an hourly rate here, uh, but I want it done in, you know, 10 hours, not 50 hours. And the agency is like, well, it took 50 hours. And you've got to figure that out.

Speaker A: Right?

Speaker B: Uh, you've got to figure out how to incentivize whether you work with the external creative agencies, production media agencies, you've got to figure out how to make sure they're incentivized to deliver what you're incentivized to do, which sometimes is fast, efficient, effective, creative work that drives growth.

Speaker A: Yeah. Hey, so coming back to principle media buy, I think traditionally there's been two things. If I had to summarize that we're keeping the traditional agency networks as a viable and needed option for brands. There was two things. One was the media buyers were kind of complicated. You kind of had to go through sort of wholesalers. So if you want to get TV buyers, you had to either pre purchase that with the principal media buy or go through an intermediary. It was quite technical and difficult to buy. You couldn't just go online and put a credit card in like you could with Facebook. Or Google or whatever. And the other thing was the technical barriers to video production. Right. Um, obviously you had to have good camera, sound people like your Mace. You're basically making a small movie to a certain extent. Right. And that obviously those barriers to entry were quite high technically and obviously as you said, you didn't require them a lot of the time, so therefore didn't make sense to do that in house. But now that I'm seeing with AI you can generate this footage directly without even having to do a shoot. Sometimes the video editing and production side of things is like really good now. And if you're doing it in digital, you don't need it to be blown up to this huge screen. So the quality doesn't need to be like super high either a lot of times. So I feel those two major barriers that um, we're sort of keeping media and traditional advertising agencies like in, in the mix are sort of waning.

Speaker B: I mean, listen, I think, I don't think traditional agencies are going to go away. I think they're going to evolve or I think they kind of need to evolve. And I, if I was, I've had lots of conversations with agency leaders over the years and I think I always say to them, think about how you can provide value to your in house agency teams and partners without feeling like you're in competition with them and that they're taking work off you.

Speaker A: Right.

Speaker B: Uh, that's what you've got to do is provide kind of higher order value. And often, often that's the kind of work that the creative agencies in particular want to do, or even the media agencies, they want to do higher order strategy and creative concepts. They don't really want to be producing and churning out work like a studio and rolling out multiple versions of the same thing. But that has become a profit center for those businesses over many years. And therefore that's where I think they're going to get disrupted through AI and automation. Because you know, things like rollout and even, you know, we work with a lot of businesses that do some of that stuff offshore, for example, you know, and that's, that's a precursor to the AI and automation conversation. But it's still valid today. And I think you're going to see agencies that thrive be smaller, uh, more nimble, more willing and able to partner with internal capabilities and hand over work and ideas and concepts to be executed in house, for example, or even hand over media strategies and media plans to be bought and optimized in house as opposed to feeling like they need to Control the whole mix.

Speaker A: Yeah, yeah, exactly. So, so then in your opinion, and from what you're seeing with some maybe more forward thinking companies and brands, um, that are really at the forefront of changing legacy practices and updating, what things sort of are you seeing them in housing versus things they're sort of keeping external as a bit of a barometer for maybe where we, where we're all heading?

Speaker B: I mean, I'll kind of answer that in a couple of ways. So the first thing is there's a, uh, there's a maturity journey around in housing that a lot of businesses go on. And so what we see is, what we see is often it starts with somebody in the business goes, God, why are we paying an agency to make our point of sale or our uh, brochures and those sort of lower tier but high frequency, high volume production assets if you will. And they go, oh, let's just get two people on max in the corner and throw them over there and just have them do it right and we'll save a bit of money and it'll be just as good, just as fast. And they start that process and then all of a sudden the business goes, hang on, there's creative people in the business who can do this sort of stuff and they start throwing more work in that direction and eventually they need to, then they want to uplift, uh, the capability of their in house capabilities to be able to come up with new concepts and ideas and produce video content and the complexity of the work starts to increase and they kind of go up the tiers from tier 4 to tier 3 to tier 2 and sometimes even tier 1 type of work. And on the journey they've got to bring in different capabilities and different kind of people to do that. So I think that's what I spend my whole life doing is helping businesses go on that journey. But what you're starting to see now that's businesses that have been in and around the industry for a long time. What you're starting to see now is businesses that start from scratch. So I'll reference, there's a business in Australia called Eucalyptus, I don't know if you've ever heard of them, but it's a very successful startup kind of medical business in Australia. And I know one of the founders there, he's a great fellow. Um, but I was fascinated to read in their investment prospectus a few years ago, they put out sort of five pillars for our business, five kind of strategic pillars for our business. And one of the strategic pillars was we are going to Build our brands, our creative, our uh, media in house. That was a strategic pillar in their total investment perspectives for the business. Because they said this is a strategic advantage for us. It enables us to be faster, more agile, more connected to our consumers and build better brands. And that's going to, that's why you should invest in us. Right. So what you're starting to see is businesses that are popping up now, startups, they're just, they're not doing the legacy model. They're just starting up with in house creative capabilities, in house content capabilities, in house media capabilities. There's another one, just as another example, you would no doubt be aware of this. Anyone who's listening to this would have heard of Liquid Death Mountain Water. It's probably one of the most talked about brands on LinkedIn in the last four or five years. This sort of really sexy brand from the US it's water in a can, but it's just exploded, right? It's worth billions of dollars and they've done an incredible job. So I, um, had the pleasure of sitting down with the global VP of creative, a guy named Andy Pearson, a couple of years ago.

Speaker A: Yeah, he's pretty active on LinkedIn as well actually.

Speaker B: He's very active on LinkedIn. Right. He's great, he's a great follow actually. Really funny and really smart about what the way they go about things. But they do everything in house. That's their story as well.

Speaker A: Right.

Speaker B: They're like the reason we can produce such volume of content and take the creative risks we take. And, and you know, they don't have massive budgets or a massive team, not compared to AB InBev or Unilever or Procter and Gamble. But they're able to produce incredible culturally relevant entertainment work. And it's. His point of view is it's because we have those capabilities in house. They're close to the brand. I personally, Andy, uh, he knows where the guardrails are and what you can and can't do from m a uh, brand tone of voice perspective. And they can move quickly and they can produce work. They made a Super bowl ad last year and you know you've got brands making super bowl ads for 10, 20, $30 million. And I think I saw him post that they made this super bowl ad for 300 grand, right? And it was certainly, it wasn't, it was in the mix for one of the better super bowl ads, if that makes sense. So you know, it can certainly be done. And you're seeing lots of businesses that aren't attached to the leg model. Go dive headfirst into this. In housing and hybrid agency model. The important thing there is, I know the liquid death guys, they do work with, you know, external creators and directors and musical talent and those sort of things. It's not like they're doing everything in house. They're just controlling it and managing the idea, uh, and the execution in house.

Speaker A: But you said that, um, and this is something that I've experienced. So there's a maturity curve, right? You start with something high frequency that like makes sense to in house. You develop that internal capability and sort of go there and you sort of go the next thing, next thing, next thing, whatever makes sense. But my issue is it's really hard to get labor to recruit people who are like super skilled. So one of the things I've noticed is that because of the last couple of decades, uh, marketers have basically outsourced their whole job to vendors. Um, they don't actually have any hard skills because everything is always at an arm's length. Again, that's a big generalization, but it has eroded a lot of like, capabilities. For example, you know, you come across some CMOs or heads of marketing, they can't even write copy. Like, that should probably be at the very basic sort of skill level. You know, they've never even opened up Google Ads before or even shipped anything or, you know, a Facebook ad. And I think, you know, the issue is when you want to in house, like, how do you find these people?

Speaker B: So I think that is one of the common assumptions, or call it myths within the industry. When I started Lucian, and even when we launched our in house agency at Cub, I would have people going, oh, you won't be able to get the talent. And I can say when I started Lucian, the story in the industry certainly within Australia was, well, the best talent just won't go work in house. They want to work for a big agency, they want to win awards, they want to work across multiple diverse varieties, you know, Right. For all that. Right. So. And they want to be within the agency network because they value creativity and

Speaker A: all that sort of stuff.

Speaker B: I can tell you with 100% certainty, in the last four or five years that has completely shifted. And we get more people, extraordinarily talented people, people who work for the best industries in the world. And even within Australia, reaching out to us, going, hey, listen, I've been on the agency side for 15 years. I'm, um, a bit over the whole pitching cycle and kind of staying up late and trying to win work and maybe Getting it, maybe don't get it. And I'd love the opportunity to go and learn what it's like to build a brand from inside the business. And there's a tsunami of talent that is looking to go in house. I spoke to a very well regarded recruiter in the creative and advertising industry only a couple of months ago and she said listen, a few years ago and she's, she's talking to global talent, right? Global, world class talent around the world. And she said a few years ago no one was talking about in House. Now 70% of the conversations I'm having with really experienced global talent are can you help me get a job in house?

Speaker A: Wow.

Speaker B: Um, so I think that, that, that idea that you can do amazing work in house, you can win awards, you can build your career that way. But there are all these other benefits to being in house that for a talent that people haven't thought of. For example, I don't know how many creatives I've spoken to that say I'd uh, like to be further up uh, the chain strategically to influence the way the products are built or, or the, the communication strategy. Don't just give me a brief to make an ad, help me get in at the top. If you go in house, you get invited in up the top of the strategic process and therefore you can influence up there you can also follow the work all the way from strategy to idea, uh, to execution to result in the business. Which means you get to know if the work you did actually did anything for the business. And this is the thing that's huge, right? A lot of agencies, they're making ads and they kind of go right, that's done, I'm going to win an award. And off we go to the next thing. And they don't actually know I did the ad. Sell any more beer or cars. We don't know.

Speaker A: I talked to us and so I talked to a strategist about this and she admitted uh, oh yeah, I don't, that clients don't tell us if it's actually commercially impacted the business or not. And sometimes you know, there's no incentive to do it because you use it as a bargaining ship, as a client. Like you don't even if it has worked well you won't tell them because you know you want to milk that. Yeah, I think that that connection loop between impact. So they talk about effectiveness and you know, blah, blah, blah. And a lot of the like, I mean I researched this, I went to some of these award winning ads and like I figured out that had no commercial impact or negative or wasn't anywhere near as successful as perhaps the award made it out to be. And I found this strange. Um, and then the same people complained that we don't get a seat on the board table or we're not invited into these sort of high level discussions like well if you don't know the impact of your work, I mean that's a big problem.

Speaker B: I'll give you an anecdote. So we ran the In House Agency Council Awards a couple of months ago in Australia and so I was on the judging panel for that awards and I've previously judged many awards shows that uh, mostly focus on extern agency creative work, et cetera. And in the in House Agency Council Awards the core criteria, somewhat similar to the fes, the core criteria is what was the impact in the business? Right? So of course we want to know about the idea and the execution and you know, how did you make it happen? But the you know, the weight of the scoring goes to did it do the thing it was supposed to do in the business? Right. And I can tell you the data uh, that we can see when an in house agency is presenting the results is very different to the data you get from an external agency because they're inside the business. They know well we grew this much, much share and we sold this many more boxes and you know, the momentum changed in this market or that market because we did this that way it's not, you know, we reached 40 million

Speaker A: people and influenced their predisposition to say that the, the brand is likable or something by 60% to 61%.

Speaker B: It's very different the hard metrics you get when you're inside the business and how much better of a uh, creative could you be if you knew the direct impact of the work you were doing and how much faster would you be able to improve the quality of that work down the track, you know. So I definitely think there's this huge benefits of talent going in house. We're seeing more talent wanting to go in house. And actually I also think of it as. It's not, it shouldn't just be like I'm going to go in house and that's it, right. I think go in house for a few years, go and learn what it's like and then go out to an agency as well. I think those, those two different experiences are fantastic to have and people who have both is a really valuable.

Speaker A: Hey, so we mentioned a couple of um, brands that do a lot of, of work in house. Um, are there any others that you'd add to the mix that maybe people would be surprised about or you know, maybe they don't do 100%. Maybe the bulk of it is done in house. So you know, you mentioned Liquid Death. We sort of talked about Coca Cola a bit. But they still use huge agencies of course. Um, what other ones would maybe be surprising for a lot of people?

Speaker B: So I'll give you a few examples that uh, are from, from a global perspective. You've got. I used to work for a business called AB InBev.

Speaker A: Right.

Speaker B: AB InBev is one of the biggest FMCG businesses in the world. They owned Cub in Australia and I was the APAC Connections and Capability director there. But they have a in house agency. They've got about 700 people in their in house agency globally. 700 people, right. It's huge. It's called Draftline. They won Marketer um, of the year at Cannes a couple of years in a row. Um, off the back of. It's not directly, it's not entirely as a result of having an in house agency but I've spoken to their team and they're like, we wouldn't have won it if we didn't have this in house team that they uh, are coming up with ideas, they're executing, they're able to do incredible things. They win lots of gold and silver lions over there. And the in house agency works with external agencies in this hybrid model. They're incredible, right? And probably one of the biggest and best and most well resourced in house agencies in the world. You've got Lego. Everyone kind of lauds Lego for the work that they do. You know, they've got something like 300 people in their global in house agency team. So big brands, big businesses doing this, lots and lots of businesses in the US doing it and even here locally. You know you mentioned Sportsbet, but we work with UE Insurance. They've just come off the back of winning in house agency of the year in Australia and they've got, they do almost everything in house. They do have a, uh, what we consider to be a hybrid model. We help them set up a hybrid model but they work with external agencies when they need that sort of extra support for specialty skills. But they come up with their creative ideas, their strategy, their media strategy. They're buying, they buy traditional media and digital media in house. Like they do almost everything in house. Um, and then you've got businesses like Commbank and Optus and Telstra and all these other Big sort of enterprise level businesses doing something similar and then little startup businesses, like I said, the eucalyptuses and the koalas of the world and various other little startups kind of starting from scratch, building in house capabilities with little teams of three, four, five, six, seven people. But uh, building that culture of creativity and agility in the business.

Speaker A: Definitely noticed like uh, having worked in startups and Silicon Valley, um, the culture was very much don't use an agency unless you really, really need to. So they might hire a digital agency to do some technical kind of ad management work or whatever. But um, everything else is like eternal. So I think you know they've grown up in that not to rely on agency for core capability. But then you know the corporate world has been sort of almost the opposite. I remember like back in the day like everything was agency based. So in housing platforms. So one of the issues we notice is like, that I've observed as well is that if you bring something in house, sometimes that person needs to have what I call marketing operations or operational management around workflows and how to get things done. And that is a skill set within itself that if you've outsourced or rely on someone else to do, you need to kind of create that structure internally. You know, approval systems, you know, shipping stuff. People would use project management systems. But a lot of these tasks involve lots of people and lots of moving parts. So it is one of the more complex things to do. So are there like minimum sort of tools like that you would use? Obviously maybe consult with you first but can you just run me through what people would need to know to get in place before they in house you've

Speaker B: picked up on something quite site for there.

Speaker A: Right.

Speaker B: Which is one of the hurdles to doing in housing well is getting the operations right. And too many businesses they kind of like, like I said before, they just throw a few designers and creative types in the corner and go have at it. And that can be a problem that can turn into a bit of a mess because there's no one there. Trafficking the work, prioritizing the work, briefing the work, managing capacity briefing properly. Like you know the idea of walking up and tapping someone on the shoulder and saying hey can you make me this little Facebook post?

Speaker A: Make it pretty.

Speaker B: That's a beautiful idea.

Speaker A: Making a correct creative video for social media.

Speaker B: Everybody in the business does that. It's a mess and people kind of get the shits and they'll leave. Right. That's the, that's a poorly run in house setup. If you come and work with solution, we'll help design the right operational model for that. And that requires some technology to help you with that and that often the minimum viable product here would be have some sort of a workflow management tool that enables you to intake briefs and traffic those briefs and manage your team's capacity and, and be able to report back to the business on where these projects are in the flow. So people know, okay, this is being worked on and it's going to be delivered for approval in X number of days or weeks or whatever. So some sort of workflow tool, there's lots of them out there. You know, we work with a bunch of them. But I'll reference a couple of. There's Monday.com is one that people use, ClickUp and Asana, Adobe Workfront. There's lots of them out there and they all, they're all good in their own different ways and relevant for different businesses. A digital asset management platform is really valuable as well, and that's to keep track of the assets. I can't tell you how many times we've had businesses tell us, uh, well, the designer left and they had all the uh, designs on their laptop and we've lost them and we've lost hundreds of thousands of dollars worth of digital assets and work because it was on someone's laptop at home. So having some sort of a digital asset management platform that enables you to keep track of all your assets that you're producing, they're all value investing hundreds of thousands of dollars in producing these things. You've got to keep them, keep on top of them. But also a lot of those digital asset management platforms these days have creative automation capabilities baked into them. So you can do templating and you can automate the resizing or the rollout of various different versions of things and you can even do like dynamic creative optimization and capabilities like that in these tools. So the best practice is set it up in such a way that the briefs come in, you've got an automated workflow that manages the work through the team and enables the leader of the in house agency team to kind of pull the right levers to make sure that you've got the right people working on the right things and delivering what the business needs to prioritize for them.

Speaker A: Yep, yep, okay. Yeah, I think those two are extremely valid. And then you know, obviously some human labor that is familiar with those end to end sort of processes as well because I think, you know, if you haven't done it before, you don't know what you're getting yourself into, you know, it's sometimes a lot more complex and LinkedIn than perhaps you, you've realized.

Speaker B: Yeah.

Speaker A: Um, and so, so what are some other cliche or widely held beliefs about in housing which you know to be sort of false?

Speaker B: I think the two big ones are you can't get the right people and you don't do good work in house. Like people don't do award winning transformational creative work in house. And I kind of go, well Liquid Death does and lego does and AB, uh, InBev does. Like you certainly can do incredible award winning transformational work in house if it's set up in the right way and you're enabled to do that. There's something that's really important to talk about here which is what is the role of the in house team you want to set up? Do you want them to be able to do transformational award, uh, winning, growth driving work or do you just want them to be able to produce content really quickly, efficiently and inexpensively? Like is it a content factory or is it a strategic advisory creative agency? And setting it up in the right way with the right vision and role for the business. That's the key to this whole thing because where it kind of falls apart is if, if you want to attract talent into the business to do big ideas and creative work and tier one capabilities, but then you ask them to produce brochures all the time, that doesn't work. Right. But if you're really clear on what the role of the in house capability is, then you can avoid some of those pitfalls. One of the myths is you can't get the right people and that's just wrong. We've talked about that. One of the myths is you can't do great work in house. That's wrong too.

Speaker A: I really like that conversation. I think, you know, we hit on some big points. I mean I um, personally, you know, we both do this consulting work but I um, personally um, have dealing with you know, agencies or in house teams or hybrid solutions. So I've sort of like, I've seen all the pros and cons like personally and um, it's just interesting but I am noticing like generally a trend in housing and there's a bit more appetite than there perhaps was before. But again then you've got sort of key person risk as well. So if you know someone's super trained up then they leave the business, you've got to replace them. So like I always advise, you know, clients to have some of that core capability like with the senior Leadership team almost like baked in or like have your processes there so that you're not losing key parts of that process. That's one of the risks that I see as well.

Speaker B: I mean it's interesting that you're talking about all the consulting that you're doing to these other brands. Where do you see it going?

Speaker A: I see it increasingly more in house but I still see a role for agencies. And actually this is interesting to get your take on this. So some, some of the practical um, barriers to entry that I mentioned before, which precipitated people to use agencies and rely on them, um, have fallen. Right. And I'm seeing that rapidly fall with, especially with AI video production. I think that was sort of the death knell moment I think for that was holding a lot of people back. And I've seen just rapid in housing. But. And I've literally had this meeting yesterday with a CFO and we're going through. Oh, okay, so we'll get that person like you said, you know, in the cor, a bit of spare time to you know, do that thing instead of this and then we can save you know, this, this money. And then I was like, oh actually now I need to go and train that person and then what if they leave the business, you know, in a couple of years then we've trained up someone and that talent's left. So how do we you know, do that but have a uh, contingency plan set up and it was just an interesting conversation, you know, running through all that. And I think if they're not familiar with like what needs to be done then they don't know the risk. But uh, like again in the digital world, I'm seeing a lot of digital agencies losing work now because of the whole content player and the search and social thing that you can do so easily and better, ah, internally and faster like you said. So I'm seeing that degrade recently, which I haven't seen previously.

Speaker B: Yeah, the point you're making about key person risk is interesting. Right. So I kind of, I would respond to that in um, I think you're right. You want that capability to be dispersed amongst the business. You don't want it to. I mean it's not, it wouldn't be considered an in house agency if you've got one person in the corner, the only one who knows what they're doing. But, but in saying that, I would say this is anecdotal as opposed to data driven but I would say the tenure within an in house agency on average would be greater than the tenure within an external agency. I would say people stick around longer. The work life balance, this is what they tell us. The work life balance is better. They're more fulfilled because they get to see the results of the work and they're more likely to stick around longer. So we have it in our experience. In the, the five or so years that I've been doing this, I haven't seen businesses where they're like two people left and the whole thing fell over. It just doesn't really work like that. And also there are lots and lots of talented people out there in the industry who want to go in house. So you know, if you're talking about a designer who knows how to use AI to produce brochures or point of sale, well, you know, you're, if you train your person, upgrade. But there are other people in the industry who know how to do that.

Speaker A: A couple of quick fire questions to finish. Is there a book that you've read that's helped you through Think Better? Doesn't uh, have to be specifically on this topic, but just in general that you can, um, shout out.

Speaker B: I was looking at my bookshelf and I saw one that I thought would be an interesting story, right? So I read a book 20 plus years ago called the Age of Spiritual Machines and it's by a guy named Ray Kurzweil. And Ray Kurzweil, he's, I think he's still at Google. He's like the chief AI officer at Google or something like that. He wrote this book 25 years ago and I read it and it was basically saying the rise of technology and AI is exponential and people think in linear terms. So they think AI is going to take a long time to catch up to human intelligence. And actually it's going to happen way quicker than you think it's going to happen. And he put this prediction in the book that was like by 2029, AI will be human level intelligence. And I think 25 years ago everyone was like, no way. That's, that doesn't, that's, that's nowhere near. It's going to be hundreds of years away. Not, not 25 years away. But if you look at what's going on right now, he was right. It's happening really quickly. And 2029 almost feels far away at this point. You know, that, that feels like it's coming. And I'm spending a lot of my time in, in the business and with our partners thinking about what are the implications of that. I think that's the Biggest thing that's going to change the world, change the way marketing works, change the way business works, change the way people consume and buy and shop. And, you know, there's all this fascinating change coming. And, you know, if you're not thinking about that, you should be. Um, and that's what we spend our time doing, is helping our partners kind of navigate that and think about what, what they should be doing as a business going forward.

Speaker A: Yeah, no, I mean, I'm seeing it just like the blog example, I think, you know, that's the easy one. And then I'm seeing video production, image production. It just changes workflows as well. Like, it changes the speed and the way you do things and the number of people you rely on. And, yeah, it's really transformational. Um, you know, again, talking to sports, but he's like, yeah, we use AI in a lot of our production process. Pretty much everything has some sort of element in there. And I was like, wow. Like, almost every ad they're doing as an AI sort of generated element. He's like, yeah, we used to have lots of people, you know, doing after effects and, you know, putting things on. We don't have the need for that, you know, large department. So they've been doing other things. That's interesting. What about, um, a quote or meme or something that makes you laugh every time because it's so true about the industry.

Speaker B: It's not so much a quote, but we referenced it before you sort of asked which account, Meme, meme account, do I follow? And I follow. Rob Mayhew jumps to mine because he just makes such a funny, poignant sort of commentary on the. The world of advertising in the agency industry. But the one I would really love to get people to follow if they can, is Andy Pearson. So the guy who is the global VP of Creative for Liquid Death, he's super smart, super funny, super interesting, and the work they do is incredible. If you, I mean, most people probably already are, ah, following that in some way, shape or form. But I'm always inspired by the work that he and his team are doing.

Speaker A: Back to you. What do you want to plug?

Speaker B: Well, um, I'd love to plug Lucien. Right. And thank you for giving me the opportunity, but that's what we do. Right. This whole conversation is centered around our core proposition, which is helping businesses evolve. Marketing teams evolve. And that means thinking about the capabilities they should be building in house, thinking about the way they work with their external agency partners building these hybrid models, but also thinking about the operations and the workflows and how you can integrate AI and automation and templating into your workflow. So if there's any of your listeners out there thinking about how their marketing teams operate and wanting to evolve to something that's a bit more future focused, that's what we do.

Speaker A: Perfect. Okay, great. And, uh, best way to contact you if people are interested in getting in

Speaker B: touch, hit me up on LinkedIn. Chris Maxwell on LinkedIn. You can, you can find me there? Yeah, that'd be great.

Speaker A: Perfect. Okay. And that solution L U T I O n. Correct.

Speaker B: Yeah, it's a, it's evolution. Evolution and revolution that's sort of to play on.

Speaker A: Perfect. I hey, well, thanks very much for ton, Chris. I really appreciate it. I think if people are interested in, you know, in housing or sort of going to the future of production like you say, hopefully they picked up something with discussion that will help them avoid some of the errors maybe that they're bound to make and yeah, maybe get in contact if they need some advice. Thanks for that.

Speaker B: Thank you, John. Appreciate the conversation.