INTC Intel Corporation

By Alexandra Bruell 

Last July, Intel Corp. set out to film polar bears in the Arctic with a chartered ship and a skeleton crew of around 13 people, including internal creative directors, producers and drone specialists.

The crew, on a mission to make a video promoting the role of Intel's drone technology in climate research, dealt with stormy seas and a dwindling food supply -- the team chipped away at a smoked reindeer leg and noshed on Ritz crackers and lettuce when the four-day trip turned into a six-day one, an Intel spokeswoman says. But they finally got their shot when a drone detected and filmed a polar bear in its native habitat. A cameraman and sound editor edited the footage on the ship, and months later the "Above the Arctic" video appeared on YouTube, Facebook, Twitter and Instagram.

The video, produced without help from an outside ad agency, is now up for a couple of awards at the Cannes Lions International Festival of Creativity. It also reflects a growing trend: More big companies are hiring their own creative teams to write, produce and place at least some of their advertising content, rather than relying solely on an outside agency to do it for them.

While Intel still works with traditional ad agencies on a number of projects, the stories around its technology are often better served by the company's internal creative team, says Teresa Herd, global creative director of Intel's central marketing function.

"An agency wouldn't be able to be OK with a skeleton crew like that," she says, explaining that the Intel employees on the Arctic voyage understood drone technology and were able to multitask. "My guys were creating the piece, but also helping the drone guys fly the drone."

More nimble

The shift to more in-house advertising work is apparent at Cannes, which is often described as the Oscars of the advertising industry. Last year, there was a 65% increase in the number of entries created by brands, says Phil Thomas, chief executive officer of the festival, adding that this year such entries are up by more than 80%.

While the number is still small -- entries from brands accounted for just 1,500 of 40,000 Cannes entries last year -- the increase in submissions points to the shift in how some big companies are approaching their marketing and advertising. Rather than outsourcing all of their ad work to storied ad agencies, some of the world's largest firms, including Procter & Gamble Co., Unilever PLC and J.P. Morgan Chase & Co., are investing in their own creative teams as they build out digital marketing and e-commerce strategies.

Advertisers say they are looking to move faster and spend less on producing ads, as they jostle to get in front of consumers who are spending more time online. A centralized, dedicated creative team can eliminate the potential for duplicate roles across agency partners -- a social-media manager working for the same brand at both a creative and digital agency, for example. It also can reduce the rounds of approvals needed to move forward with a project and eliminate the need to share sensitive data with outside parties, industry executives say.

Shortly after Chief Marketing Officer Whit Alexander joined Best Buy Co. Inc. in 2015, the electronics retailer ended its agency-of-record relationship with Crispin Porter + Bogusky and began investing in more of its own marketing capabilities, hiring designers, writers and production talent. More recently, Best Buy has invested in analytics talent as it seeks to create more targeted and effective ads, and plans to hire dozens of marketing folks across creative and media, Mr. Alexander says.

The goal is cost-efficiency and a fresh creative approach, he says.

"In the Mad Men days, there was one option for creative talent. That was, join an agency," Mr. Alexander says. What he's seeing now, "whether it's a generational thing or technology is enabling it," is top creative talent opting to do freelance gigs or seeking nonagency work, he says.

That doesn't mean that Best Buy is planning to move all of its marketing in-house. A team from ad agency Wunderman currently resides in Best Buy's office, he says, and works with the company's in-house group.

Ms. Herd says that when she joined Intel in 2014, in-house advertising work represented only about 5% of the total, with the rest handled by an external ad agency. Now, the in-house work is more like 60% of the total. When Intel initially started building its internal agency, the cost savings were "profound," she says. Employees still add costs, she says, just not as much as agency talent.

Quality work?

Still, most companies say ad agencies will continue to serve an important role -- especially on high-profile campaigns. Intel's Super Bowl and Olympic ad campaigns, for example, were created in partnership with agencies and are also up for awards at Cannes.

There are pitfalls associated with moving all advertising in-house, industry and agency executives say. It is tough to hire and retain young creative talent, especially in more remote locations, where many large corporations are based, as well as keep people happy working on only one brand. People who create advertising like variety, they say, and working on only one account can be stifling.

Much of what clients want to bring in-house is the cheap, digital production work to create different versions of online ads for different audiences, says Casey Burnett, founder of advertising consulting firm Burnett Collective. Creative staffers "want to work on big campaigns," he says. "The challenges are still the same. How do you attract great talent; how do you keep that good talent; and how do you keep it fresh and interesting?"

At the Cannes ad festival, the percentage of entries that win Lions consistently has been around 3%, but the likelihood of an in-house team winning a Lion is half that, says Mr. Thomas. (Intel has won a Lion previously for in-house work.) "What that tells us at the moment is, yes, they're producing more work and entering more work into the festival, but is that work necessarily at the standard of winning Lions? Data tells you it currently isn't."

Ms. Bruell is a reporter for The Wall Street Journal in New York. Email alexandra.bruell@wsj.com.

(END) Dow Jones Newswires

June 18, 2018 13:22 ET (17:22 GMT)

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