House agency or hired guns?

The Marketing Society in Dubai took on a debate that goes back 119 years to 1899 when soap manufacturer Lever Brothers founded the first ever ‘House’ Agency, LINTAS (Lever International Advertising Services), to provide an alternative to the likes of James Walter Thompson’s advertising agency founded in 1896.

The debate was moderated by the Ash Banerjee (Landor) with an August panel representing all sides of the argument. In the red corner were Vikram Krishna (Emirates NBD) and Jon Marchant (FP7) for the client/retained agency team model. In the blue, Hannah Naji (JLR) and Bernardo Jun (Spark44) for the ‘House’ Agency (though actually, it’s a JV). And In the middle Michelle Walsh (VOX Cinemas) whose hybrid approach is different still.

The headline arguments in favour of the red position have always focussed on the quality of the creative output fuelled by freshness of thought and diversity of inputs, with lack of accountability and loyalty as the counterpoints.

For the blues, unsurprisingly, the converse.

A limited canvas for creativity, the inability to push back on the client and intellectual complacency on the one hand, with security of tenure, specialisation, transparency and common interests on the other.

I know something of both of these models at first hand having run both WPP owned advertising agencies and the Hyundai Motor Group’s house agency INNOCEAN.

And of course, all the stereotypes are absolutely borne out in the real world with both approaches offering advantages and disadvantages.

But they are stereotypes, and neither model is inherently superior or inferior to the other but rather both offer the opportunity to fly or fall and as we know they can. 

The key difference between the success and failure of either is, of course, the talent brought to bear on the business and that is the area where all sides of the argument most readily agree.

As the siren voices of other employment sectors beckon ever louder, we must all play our part in encouraging young talent to join and thrive in the marketing and creative services industry so that we can fight our corner in the debate as to which model works best for years to come.

By Nick Clements, CEO of Ampersand Global (www.ampersandglobal/com) and the COO of the MCG& Group (http://mcg-grp.com)