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Esther Lee has hammered another nail in the coffin of the global ad agency model, creating an internal account-planning function at the Coca-Cola Co.

The VP-chief creative officer of world's most iconic brand is building a planning group at a corporate, global level. It's a move that agency executives fear will make agency planners redundant and make it even easier for the beverage giant to parcel out creative assignments on a project basis-a practice that has become commonplace at Coke and many other major marketers-rather than nurture long-term global marketer/agency relationships.

Called the Global Creative Excellence team, it assembles planning executives, some from Coke's agencies, to steer worldwide advertising strategy much the same way Yahoo did with its customer data and insights team and SABMiller did with its Market and Business Insights unit.

While senior staffers at agencies accept that in-house teams could better facilitate global consumer insights and drive stronger creative, they also worry that they commoditize the agency product-turning them into ad producers that can be pitted against each other to drive down compensation-rather than keepers of brand equity and providers of strategy and insight.

"Agencies don't have ownership anymore and they become project executors rather than partners," said one executive familiar with the situation. "The thing to watch is whether agencies keep assignments" beyond the initial job. Another said: "Agencies can no longer take for granted that they will be the default choice for an assignment."

In-house strategic teams also give marketers like Coke more power to cherry-pick creative resources. In recent months Coke has made a habit of assigning creative projects to boutiques around the world rather than relying on one global shop.


The Coke insider acknowledged that an in-house planning function does make it easier to cherry-pick agencies to work on projects, but insisted that the parallel team leaves the regional-agency model intact. "We still have significant agency-of-record relationships across geographies," said the insider. "Anytime we do something different, it seems to signal that we've changed our structure or philosophy, but it doesn't have broad, sweeping expectations."

Reporting to Ms. Lee in the new unit are: Atlanta-based David Butler, VP-identity and design; Hong Kong-based David Elsworth, director-advertising, Asia; Mexico City-based Walter Susini, advertising director-corporate marketing, in charge of all of Latin America; and Manhattan-based Robin Bardolia, VP-advertising strategy.

The group allows the company to be more insightful in how it directs agencies to develop creative, said the insider. ""They understand the entire category," said the insider, "so if you're working on, say for example, a Sprite project in Indonesia, David [Elsworth] brings a global understanding in carbonated soft drinks and Sprite that a planner at the agency working on Sprite in Indonesia will never have."

"Clients now are understanding consumer behavior and consumer insights through data not available to agencies with the same advantage," said Tom Collinger, associate professor of integrated marketing communications at Northwestern University's Medill School of Journalism. "The agency model has never been able to adopt legitimate consulting abilities. Marketing is much more the domain of clients and communications is much more the domain of agencies."

The insider said that the company has in varying degrees always been one to "search and reapply" creative from various parts of the world. "We are looking to have fewer ideas work across the geography."

Already, Coke has been repurposing creative. Last year, the beverage giant ran the "I Wish" TV spot via U.K.-based Mother in North America. It later produced executions for Latin America and the Philippines. A holiday spot via Interpublic Group of Cos.' McCann Erickson, Spain, ran in the U.S. and elsewhere.

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