Why On-Site Agencies Are Catching on With Clients
Up until a year ago, the News U.K. was working with five agencies across three newspaper brands – The Times, The Sunday Times and The Sun. The arrangement was taking up time and resources that the fast-paced publisher couldn't spare.
The Rupert Murdoch-owned papers hit upon a solution last May: centralize the marketing teams. With Pulse Creative, the publisher established a cross-discipline agency made up of a team of 70 people from WPP shops including CHI & Partners, Wunderman and Mindshare, but located on-site. The agency, led by CHI, also works with News U.K.'s betting, gaming and commercial businesses.
"Pulse Creative allows our marketing teams to spend less time connecting diverse agencies with competing interests, and more time bringing great campaigns to life for our customers," Chris Duncan, managing director of Times Newspapers, said in a statement.
Since then, Pulse Creative has won five D&AD Pencils (the U.K.'s top creative award), proving that on-site agencies aren't just about time, money and transparency; they can compete creatively too.
Pulse Creative is just one of the more recent on-site agencies to launch in the past several years, a trend that can be traced back to at least as early as 2004, when Simon Martin, CEO and founder of U.K.-based Oliver Group, set up an agency to focus exclusively on creating tailored on-site teams for marketers.
Oliver now employs 1000 full-time staff working for 60 brands in 27 countries, supplying on-site agencies for marketers including Starbucks, BMW, Adidas, and Barclays. Oliver set up in the U.S. two years ago and expects to double in size in the next six months. The group's international sales were £68.6 million ($88.3 million) last year, up from £42.5 million the previous year ($54.7 million).
Cost efficiency, of course, helps. "Our model is weighted towards productive people," Martin said. "An on-site agency is faster, more productive and we understand our clients better… we typically save 30% against a traditional agency."
The benefits of an on-site agency can be enhanced by connection to the mother ship and a ready supply of fresh talent. "A big part of the sell is that [on-site agencies] are fuelled by agencies with great credentials," said Sarah Golding, CEO of CHI & Partners. CHI was brought in to mastermind the recent "Know Your Times" repositioning, which brought The Times and The Sunday Times' marketing together for the first time.
CHI is now in the process of setting up 16 on-site agencies around Europe for new client Toyota, and Engine Group has recently launched NuFu (short for Nuclear Fusion), which will place Engine staff inside client businesses.
The on-site agency offers a flexibility that a marketer's own in-house agency can't hope to match. "A vast range of expertise is required across different disciplines, and marketers are limited by how much expertise they can afford – it's not a variable cost," said Martin. "We bring scaleability, flexibility, and access to Oliver's people around the world."
Being on-site can be a good way for an agency to win more business from a client. In the U.S., Wunderman runs an on-site agency for Best Buy, which started small but now houses up to 140 people. Seth Solomons, North America CEO of Wunderman, claims to have helped Best Buy make the transition from analog to digital. "It's always better when you are walking the halls of a client," he said.