With Costs Soaring, Hogarth Helps Brands Boost Efficiency With In-House Talent

As agencies face increasing pressure to produce more content with shrinking budgets, some are streamlining production with in-house capabilities.

hogarthAt least, that’s what WPP had in mind when in 2009 it partnered with Hogarth Worldwide, a global marketing implementation firm.

As a sister organization to WPP, Hogarth acts as a production and global distribution resource for the holding company’s agencies. In April, Hogarth launched a joint venture with WPP’s other production unit, Ogilvy’s RedWorks, to collaborate on production work.

“Brands and clients are growing but they’re not growing at 20% a year,” said Hogarth America CEO Meritxell Guitart. “However, their advertising output is growing by at least 20% a year. There’s a lot of pressure to control costs.”

Only 10 years ago, a brand would tackle a handful of execution types – a print ad, a TV ad and maybe a banner. Today, the execution types vary across social media, emerging channels and new formats, but budgets have declined.

“Media agencies are also being questioned about the complexities of programmatic,” Guitart said. “From a production standpoint, you need to produce a lot more. But you can only reduce costs so much without changing the way you operate.”

Hogarth employs about 1,200 globally and works with global brands such as Nestlé and Johnson & Johnson. For its clients, Hogarth produces, translates and delivers advertising to markets across the globe. Some of its services include production studio management and TV, audio, digital and print production.

AdExchanger spoke to Guitart about how brands can tap in-house expertise to drive efficiencies and expand globally.

AdExchanger: How does streamlining production reduce agency costs?

MERITXELL GUITART: When you look at how clients work agencies there’s a lot of fragmentation. Some brands work with multiple agencies and some sign with holding companies, but otherwise you might have a brand like Nestlé with 60 different products and they work with 20 different agencies. Our clients are looking for more efficient and cost-effective ways to take their brands global. Whether we support them in one market or in 46, it’s about taking production to another level and working with a production agency directly.

Every agency manages production services on behalf of that client. In our case, we go to clients and say, “If you pull production from all of your agencies and centralize the production management role, we can drive between 20% and 30% savings based on your current spend.”

How do you fit within WPP?

We fit within WPP Digital. We don’t report to the agencies but we partner with all of WPP’s agencies on some level. For some of their agencies, we manage their production studios in-house. We are an aspect of WPP that the agencies can use, but that they’re not forced to work with.

What’s the value of an in-house production studio?

If you think about how agencies are evolving, they need to be able to produce more content. There’s a lot of value for agencies to have production resources in-house, so that when they’re coming up with ideas they’re more attuned to execution. Some agencies recognize that and have been investing in production resources. But it’s very hard to attract the best talent to work with an in-house studio, and every agency is limited by its own production resources. Having a company like Hogarth managing in-house production helps creative agencies have the best of both worlds.

How can marketers use data to inform their creative strategies?

The way market tiers are structured defines the way creative agencies are able to service their clients. If brands are responsible for both media and creative, and the media agency is the one holding all the data, they can use that data more efficiently. But if brands are structured in a way where budgets are spent at the beginning of the year in order to develop a marketing plan with X amount of executions and a budget of X, that’s completely counterintuitive to being able to use data in a real-time manner.

Who’s in your competitive set?

Every holding company is building a competitor to Hogarth. Publicis has reorganized their production resources, and it’s the same at Omnicom. Companies like Accenture and consultancies have also realized opportunities in the execution of advertising and are moving into the execution space.

How does Hogarth think about automation?

Programmatic buying is a great opportunity for clients, but there is a need for transparency. Having the ability to automate digital media buying is fabulous because if you get to the right price point, it allows you to get a lot more data out of the advertising you publish. If you couple that with working with a production agency, it’s a great opportunity. It allows us to work with media agencies to optimize content and constantly offer more tailored advertising based on data. I see that as an opportunity that’s not going to go away, but that’s going to evolve. It will only enhance the ability for advertisers to have a bigger media presence.

Walk me through a campaign.

We don’t get involved on the creative process unless the agency asks for our opinion on how an idea might perform internationally. Working with consultancies, we make sure that concepts will resonate with local audiences, consumers and cultures. If voiceovers are needed we organize that. We also make content work with the guidelines of local broadcasters. We do that through our network of strategic planners. The other way we complement the creative agency is through the development process in making sure the concepts they come up with are producible and that the idea will meet a client’s budget constraints.

How have emerging channels changed how agencies ideate?

Social doesn’t always need to be spontaneous, but it needs to be managed differently. Agencies need to break patterns in order to be true to different mediums. It’s interesting to see how new companies like Airbnb have launched and become a global phenomenon, and only now are they launching their first TV ad. If you don’t carry traditional ways of working you can be a lot more agile. That’s a big challenge and there’s still a lot that needs to be done for traditional advertisers.

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1 Comment

  1. Excellent read! What would you consider as the optimal set of production capabilities that can be decoupled for a multi-national multi-brand company?