House Agency

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A house, or in-house, ad agency is owned and operated by an advertiser as a company subsidiary. A house agency can mirror the structure of a full-service agency with a host of regularly staffed positions, it can perform key tasks such as media buying or creative development and outsource other work or it can operate as an administrative hub, coordinating campaigns and contracting with outside specialists as needed.

Small retail businesses often opt to organize advertising in-house because they consult with local media representatives to develop ideas, because their advertising budgets are too limited to attract agencies or because their advertising schedules stress tight turnaround times, making it cumbersome to deal with an intermediary.

Although many house agencies are small shops that service a local or regional business, a fair number of large companies also choose the house agency approach. Reasons for using a house agency instead of an external agency differ, but six general advantages are apparent: lower cost, intimate knowledge of the product or service, continuity, confidentiality, flexibility and speed.

Throughout the 20th century many notable corporations have used house agencies to design and implement advertising campaigns. For example, Bristol-Myers, Nabisco, General Electric, American Home Products, Quaker Oats, Macy's, Revlon, Ralston Purina, Sony, Lever Brothers and Gillette have all launched campaigns created by house agencies.

In the late 1990s, companies with either full-service or substantially staffed house agencies included Avon, The Gap, Benetton, Best Buy, NBC, Prudential Insurance Co. of America, Fidelity Investments, MasterCard International and the National Football League.

House agencies do have drawbacks. An agency so closely linked to an advertised service or product may lack objectivity and creative independence. In addition, house agency personnel also are less likely to have the versatility or the range of creative experience found in an external agency.

Despite the potential shortcomings of operating a house ad agency, memorable in-house campaigns have left a mark on advertising history. Celebrated campaigns developed by house agencies include: Procter & Gamble's Ivory Soap's "99 and 44/100% pure"; Calvin Klein's "Know what comes between me and my Calvins? Nothing!"; and Springmaid linens' "A buck well spent."

Independent agencies have sometimes been transformed into house agencies. In 1989, Revlon bought Tarlow Advertising to function as the marketer's in-house organization. Coca-Cola Co. made a similar move in 1995, hiring three creative consultants to head a new in-house agency called Edge Creative.

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