For Anheuser-Busch InBev, it was a simple matter of dollars and cents. Lucas Herscovici, global marketing VP of consumer connections, insights and innovations at the brewer, says the company brought programmatic media buying and production of quick-turnaround social media content in-house in part to get away from a TV-grounded agency mindset that takes five months and $800,000 to bring an idea to market.
Compare that with an online video created in January 2017 by AB InBev's in-house content studio for Corona in Mexico. The effort, titled "Make America Great Again?" was an answer to Donald Trump's border wall idea and defined America as a continent, not a country. "We are all Americans," says the video. "America is the land of opportunity, a land of more than 1 billion inhabitants. Wild America. Multicultural America. United America."
The video took only 48 hours and $50,000 to create—and has generated more than 100 million unpaid views to date, Herscovici told an audience at the Association of National Advertisers Media Conference in March.
Marketers have been bringing media in-house since even before a 2016 Association of National Advertisers report alleged that media agencies weren't always passing discounts and incentives back to their clients, heightening concerns over where their media money really goes. An ANA survey last year found 35 percent of marketers are taking programmatic digital buying in-house, and the ANA's In-House Agency Committee has fast become one of the trade group's most popular, with more than 50 regular attendees. The interest is so great that the ANA plans to start a West Coast branch of the committee later this year.
The rise of social media has added the newest twist to the trend, driving big marketers to take more ad production into their own hands. The goal is to duplicate the speed, agility and lower costs that small marketers enjoy, while also avoiding paying agencies for work that can be done more efficiently in-house. In a reflection of the direction the industry is heading, several presenters at the ANA conference focused at least in part on the advantages of in-house media and production.
New look, better vision
"In 2015, we had more than 1,000 influencers working through third parties," Kristi Argyilan, Target's senior VP of guest measurement and engagement, said from the ANA stage. "The return on investment wasn't really great."
So the in-house mindset that began with its programmatic buying operation moved to influencer marketing and in turn spawned some creative work. Target brought its influencer work in-house, cut the number of influencers to 100 and built deeper relationships that have improved return on investment, she said. The move also led to influencers showing up in Target TV ads that, she said, don't "look like they were created by the marketing department," even though they were.
Having programmatic media buying in-house lets AB InBev see exactly what its money is buying, Herscovici says. When handled by outside agencies, programmatic is "a black box where we know for every dollar spent only 40 percent goes to the publisher, and we know with fraud and everything else it's less than that," he said.
AB InBev started experimenting two and a half years ago, bringing people who'd worked on outside programmatic trading desks inside the company. "We proved that when you have people doing it who have pure ownership and understand it well, they can do better by delivering better quality," Herscovici said, defining quality as a combination of ads that meet industry standards for viewability, are seen by people the company really wants to target and are secured at the lowest cost. By that measure, he said, "we were able to achieve 25 percent savings versus the previous model in the U.S., 30 percent in Australia and 40 percent in Japan."
The trend isn't a one-way street: AB InBev in 2014 moved its media buying from an internal unit to outside agencies, and reconfirmed that with a global media review last year where Dentsu Aegis Network's Vizeum was the big winner. But Herscovici notes that programmatic digital buying is by far the fastest-growing piece for the brewer, and it's coming in-house globally, alongside social media listening and analytics.
The in-house thinking at AB InBev has since shifted to ad production, particularly in "earned" social media. "It's sometimes not in the best interest of media agencies to drive earned-media ideas, because you don't use paid media," which makes the work harder to value for agencies, Herscovici said.
The in-house drift isn't just about cost. The pressure for big marketers to be more like small ones is driving moves both in production and media. Smaller players have been collectively taking share from the big ones across many categories, and investors have noticed. One of them, Nelson Peltz, pushed his way onto Procter & Gamble Co.'s board last year in part to make the company act more entrepreneurial.
Jorge Mesquita, worldwide chairman for Johnson & Johnson Consumer Cos., made his company's answer to threats from startups the cornerstone of his presentation to the Consumer Analyst Group of New York meeting in February. More in-house work is part of that response. Shortly after J&J bought small-but-rising personal-care player Vogue International last year, J&J North American Consumer Group President Jeff Smith noticed the modest in-house operation that produces Vogue's social-media posts. He'd like to extend the practice more broadly across the giant business that includes Neutrogena, Listerine, Tylenol and Johnson's Baby products, Smith says.
Within months of acquiring startup Dollar Shave Club in 2016, Unilever was mimicking that company's in-house agency by developing in-house production studios of its own globally. Now Unilever has 17 of its U Studios in 12 countries, turning around content faster at a cost about 30 percent less than working with agencies, the company said in its recent annual report.
While P&G started developing a proprietary programmatic trading operation years ago, largely to take advantage of what it saw as its edge with the technology, the entrepreneurial itch is driving a deeper move toward in-house media there today.
"Over time, our marketers have steadily outsourced work to agencies, resulting in too many touch points between brand managers and consumers, and a lot of project management versus true brand management," P&G Chief Brand Officer Marc Pritchard said at the ANA meeting. P&G now wants marketers to act more like "brand entrepreneurs," he said. "If entrepreneurs can buy digital media, why can't the brand team on Tide, Dawn and Crest be entrepreneurs and do the same?"