Even the biggest and most lauded advertisers struggle with moving more marketing in-house. Coca-Cola is a case in point: two years into its own in-house plan, and it’s still very much a work in progress.
Not that the business would see that as a bad thing. In many ways, the slow progress is intentional. There are too many nuances — from hidden costs to logistical hurdles to political flashpoints — marketers must be aware of if they’re serious about exerting more control over their advertising. The scores of marketers who saw their in-house plans grind to a halt because they tried to rush through those issues can attest to this.
Naturally, Coca-Cola marketers are keen to avoid the same pitfalls.
To do so, they‘re focused on what incremental gains they can get from having an in-house team, not how transformative it can be from the outset. This way the company’s grasp shouldn’t exceed its grasp, said James Donovan, global audience and addressable media manager at Coca-Cola on stage at the Programmatic Pioneers event in London earlier this week.
“We’re still getting started in a lot of ways,” he continued. “We went through a major company restructure in 2020 and part of that process was creating a marketing and media services division.”
This is where specialist marketing and media experts from inside and outside the company are based.
“They do so with the objective of making sure that all our processes, campaigns and our use of data are being done as efficiently as possible. Part of that was about taking ownership and control of that,” said Donovan.
None of this is especially new for an advertiser like Coca-Cola. On the contrary, it’s hard to think of an aspect of marketing, from design to creative to media management, that hasn’t been taken in-house at Coca-Cola over the years. This time, however, the business is trying to pool a lot of its specialist marketing talent together under a central function — one that would allow it to realize the operational and strategic benefits of having direct access to that knowledge.
“We as a company are not in-housing in a way that many people would expect in so far as it’s not us taking everything in-house, lock, stock and barrel,” said Donovan.
The subtext behind these words is that Coca-Cola is trying to be tactful around the in-house topic. Time and again, it gets framed as net loss for agencies when it has been proven to be anything but. The reality is that many advertisers continue to use agencies after they’ve replaced them with their own teams.
Coca-Cola is no different. It has a hybrid approach for all intents and purposes. Or, to put it another way, those agencies effectively become a consigliere of sorts to those marketers in the in-house team.
“I sit in a team with over 10 other people who are part of a company in over 200 markets — that’s impossible for us to manage so we rely on our agencies and partners,” said Donovan. “The in-house team, or hybrid model — call it what you will — ultimately relies on collaboration with agencies and partners.”
Take ad tech, for example. Coca-Cola owns direct contracts with multiple tech vendors, all of which are managed by digital experts who sit within the advertiser’s in-house media team. And yet agencies still remain a place for expertise on new trends in ad tech, which are too difficult for the internal team to stay on top of.
“The conversations we’re having with our agencies often involve our marketers saying to their colleagues at agencies ‘I’ve started this piece of work, what do you think about it?’ and they’ll give us an honest answer,” said Donovan. “There’s a confidence that these people are going to guide you through the process.”
It’s a balance many marketers have struggled to strike with their own agencies because they’re essentially having to retrofit operating models that weren’t designed with that in mind. Coca-Cola never had that problem because the strategy for the in-house team was being developed at the same time as a global review that saw it consolidate its media dollars from four agency holding groups into two. Simply put, the agency model was designed to work with the in-house team from the start.
“The global agency review reset our relationship with our agencies,” said Donovan.
Now, WPP handles around 90% of its media investment duties, while Dentsu covers the rest, he continued. In other words, Coca-Cola has a simpler, more streamlined relationship with agencies.
“The in-housing trend has strengthened collaboration between Coca-Cola and WPP,” said Donovan. “We’re able to challenge the execs at the agency, and they have a license to do the same to us. There’s a healthy dialogue across the businesses now. That’s the opposite of what I think many people would think instinctively about something like this.”
Recruitment has been key to this. Where many companies have struggled to find the talent they need, Coca-Cola has found success early on. Not that there weren’t challenges. As Donovan explained: “Building an in-house team isn’t something you can do overnight.”
There are a range of reasons why, from making sure a person fits the culture to archaic human resources systems to finding talent outside of a few coastal cities, he continued.
To head off some of these issues, Coca-Cola got very prescriptive about what it did and didn’t want from potential recruits. In turn, it has ended up with a team from a diverse talent pool, with execs coming from places like Mindshare, Condé Nast and Tapad.
“We had to change the way we recruit talent,” said Donovan. “It wasn’t about going out and finding some media experts. Rather, it was about finding people who had experience in ad operations for example — who know what it means to analyze data and build out taxonomies from it all, but can also understand the nuances of DSPs.”
It goes to show that the in-housing trend was never the death knell to the agency model that some observers claimed it to be. It forced agencies to adapt their propositions, of course, but only to a point. Ultimately, the in-house model has been more additive to the agency model than transformational.
“Agencies have definitely evolved their model to adapt to in-housing, a modern-day pitch is all about showcasing the bespoke team and tech that can be built to compliment the in-house team today and demonstrate the flexibility to change as in-house tactics change,” said Dan Larden, head of U.K. at digital media consultancy TPA. “We’re finding that there are more ‘flavors’ to in-housing than ever.”
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