In 2018, the production landscape has been shaken by political and economic uncertainties worldwide. A drive from clients for their suppliers to provide cost-efficiency, speed and transparency in the production process alongside a rising demand for content has seen a continued increase in in-house agency and production models.
As we charge forward into the New Year, we speak to business leaders in production agencies and consultancy to find out what they think will happen to production in 2019.
In-Housing is Not Necessarily the Way Forward
In October 2018 the ANA reported that 78 percent of its members had an in-house agency in 2018, versus 58 percent in 2013 and 42 percent in 2008, claiming that cost efficiency was the main driver for this growth.
Despite the fact brands are diverting work in droves to in-house facilities for cost-efficiency and speed, it’s not necessarily where Founder of Production Value Consultancy, Murphy Cobb Associates, Pat Murphy thinks they can get the best deal. “I’m still not convinced the big internal production houses are the places to get the best creativity for the best price. Having a diverse landscape at your disposal is imperative. If you shoehorn your business into one route you become restrained both financially and creatively. The more creative choice you have the more likely you’re going to get something interesting at the end of it. And, if the work is good, then the best companies will want to work on it. What’s more they’ll make the budget work.”
Pat Murphy has experienced big shifts in what his brand clients have been asking for as a result of the current production landscape. “Cost consultancy is dead,” he explains. “Brands don’t want to just cut cost. They also want to make effective advertising and they’ve been coming to us to help re-engineer the process, not just react to budgets they’ve got coming up.”
This brand perspective has been fuelling a myriad of new production agency models which seek to provide value and efficiency, as well as best value creative choice and production experience.
Former heads of TV / integrated production at RKCR Y&R, Jody Allison and Tim Page, opened their production agency Heads Up Production in 2017 with the sole purpose of giving brands and agencies high-level production experience and navigating the open marketplace of production suppliers.
Working with both brands and agencies, the pair suspect that the shrinking agency marketplace we are experiencing as a result of in-housing will result in external agencies moving further away from the retainer model and working on a project-by-project basis.
They go on to say that we may continue to see a rise in house agencies and production outfits in 2019 but that they may start to falter as we move into 2020. “Brands are seeing big value in taking work in house because they not only save money on the creative and production process, but the approval process is swift and transparent. However, we don’t believe we’ll see them forego external agencies completely. They need that outsider perspective and they need fresh creative thinking that is challenging. At some point there is a danger that all in-house teams become a part of the brand and they risk becoming part of the furniture, whether they work with other clients or not.”
Production Boundaries Continue to Blur
The barriers to the production world are swiftly blurring. Production, post production and even music companies are working direct-to-brand. Production is most certainly not a process owned by the agency anymore. In 2018, legendary creative Walter Campbell, announced he would be joining post production company MPC to lead a creative and production offering. In an interview with Shots
, he said, “we can all see many clients ‘fixing’ the agency model they have long labelled ‘broken’ by taking their pick of planners and creatives and moving them in-house. So, instead of coming to our industry with briefs, now they come with campaign ideas. And what they more often need today is help refining their ideas and taking them into production. That change has made it very hard for some agencies to own the relationship like they used to with certain clients (not all – some still follow the lead agency model); and as a result, many agencies don’t see the volume of briefs or the magnitude of budgets that once they could rely on.”
Whilst agency roles are shifting and the production process blurring, there are two key disciplines direct production suppliers lack.
“There are still two areas where traditional agencies really have the edge over in-house facilities and that is in creative and strategy”, explains Jody from Heads Up, “when we talk about brands working with agencies on a project-by-project basis, this is really when they will need them – particularly when it comes to things like multimarket integrated campaigns. Whilst there are loads of things brands can do well, the strongest talent seem to be going freelance rather than venturing in-house; it keeps them fresh. We suspect that the more brands are in-housing or going direct to production, they’ll feel the need to take on freelance creative and strategy talent. It’s the reason 42% of business is still going to external creative agencies”
Transparency > Confusion
One of the many factors that has given rise to a myriad of new options for taking brand’s marketing campaigns from ideation to delivery, is the inherent distrust in the way creative agencies have traditionally handled the production process.
Managing Director at Wellcom, Duncan Stokes, notes that the industry is experiencing a state of confusion, and like the team at Heads Up, has heard from a number of brands who have struggled to in-source strategic, creative and production capabilities. “Brands are confused about the right creative and executional model. Should they insource, outsource or combine the two? Do they use creative agencies and if so, are they offshore, freelance or virtual? Do they use specialist or full-service agencies, or media agencies offering creative services?"
Duncan suspects this confusion is fuelling a trend for brands to use independent specialist production partners ‘who cut through the maze of agency owned production facilities and brand insourced talent.’
His employer, Wellcom is an independent global production agency who work with both agencies and brands. Describing themselves as ‘de-coupled but creatively linked’, they have grouped together a full remit of marketing production services under one roof which create video, photography, digital, print and social content. They provide these services to both brands and agencies and in one case to both simultaneously.
“We don’t do campaign strategy or planning and the associated creative idea generation. We appreciate the creative process, know what time and effort has been spent developing it and highly regard it’s meaning and intent. Our job is to adapt, extend and manage the idea across all the chosen media channels using our creative tactical/extension and technical capabilities. We are agnostic in terms of where we are implanted – the same culture and experience is valued equally by both brands and agencies.”
Looking into 2019, he adds: “Trust between agency/brand and production partner is of paramount importance as we move forward. The industry must operate with full transparency, providing no nasty surprises by communicating with open and honest conversations. That is why we are seeing growth from the independent production sector and agencies de-skilling in production.”
Will Engagement Trump Quality?
Ad-blocking and content over-saturation has been a worry for advertisers for some time. Brands have been exploring branded content, editorially-led production models and partnerships with social influencers in a bid to create content audiences won’t switch off from. Millennial audiences are fast becoming one of the world’s highest spending demographics and there is argument to suggest that they are influenced by engaging ideas as opposed to production quality.
Constantin Bjerke, founder of lifestyle fashion and arts video magazine Crane.tv opened his commercial production company, Cult, as a reaction to demand from brands who wanted to connect with audiences on a genuine level.
Looking into 2019 Bjerke suspects that millennial habits will drive brands to focus on engagement as opposed to production quality. “Millennials are now the largest demographic, in most of the world, with an average age of 27 and their income growing 15% per annum. What they want and engage with is key for advertisers. The American and Chinese platforms understand this better than anyone because they’ve got the data and audience access. Looking at what YouTube and Instagram are doing (for example hiring Derek Blasberg to grow YouTube fashion and beauty vertical) then I think that we’re in for a bigger focus on engagement and a smaller focus on production quality. It’s just not as necessary as often to shoot pristine commercials even for highly visual clients.”
Production Experience Will Become King
One strong theme that has emerged about the future of production is that experienced producers are becoming a rare commodity.
“In the UK alone, there was a huge loss of talent in the production field in 2018 - particularly at top level agencies” says Tim Page. “Agencies are rapidly de-skilling in production. Brands’ top priorities, at the moment, are balancing cost and effectiveness and more often than not cost consultants are brought into the process from the beginning. As a result, agencies are under intense pressure to deliver and its really only experienced producers who can balance operation and value in production. Getting rid of hi-level client facing production minds is likely to be a false economy in the long run.”
Across 2018, there has been rising speculation that the experience of a producer may begin to trump the experience of a director.
“I truly believe the best production companies of the future will be without rosters,” says Pat Murphy. “Being without a roster can be far more flexible and cost effective – which is what brands want. And the fact that clients desire more stuff for less money means the emphasis will now be on the producer not the choice of creative talent. In the content future, the Producer will be King. ”
There is no definitive answer to what the future may hold for commercial production, but trends point towards a drastic role shake up. With brands and suppliers vying to provide production in new ways and from new perspectives, brand advertisers have more choice than ever at their fingertips. However, it seems experience must reign in the production field for these models to succeed.