by Maureen Morrison:
MDC Partners' 72andSunny is building out a new 13,000-square-foot studio that will almost double its current Los Angeles production facility in both size and head count. On the opposite coast, Omnicom's BBDO New York is busily expanding its in-house production studio beyond the current video and social-production staff of 35. And Interpublic's FCB Chicago says it now produces 60% to 70% of its work itself.
Credit: Illustration by Viktor Koen
Where internal units once languished on the margins -- inglorious imitations of high-profile, independent production houses -- agencies are now at least several years into an arms race fueled by the rise of digital video.
Any shop today that can't quickly churn out clips for Instagram, live streams for Meerkat and commercials for TV will find itself at risk, according to agency executives. "It's requisite to the sustainability of the agency," said David Rolfe, director-integrated production at BBDO New York.
His unit now produces just under 20% of its work in-house, with a goal to reach 60%, factoring in all content and social creation. "Agencies are dependent on production, and any agency that doesn't have it now looks vulnerable," Mr. Rolfe said.
The flip side is that big account wins can help pay for new advances. In the wake of winning Sprint, the Los Angeles office of Interpublic's Deutsch is also growing its production facility. The agency currently has about 10 full-time staffers plus freelancers, but those staffers can produce up to 75 variations of TV spots for a given client in one month alone, said Vic Palumbo, director of integrated production.
The in-house production helps clients "react to the market," said Mr. Palumbo, citing a TV spot the agency did featuring a goat to promote Sprint's new family plan. The new total head count for the production staff remains to be seen, he added, noting that it will be "based on work flow."
Agencies have been offering production in some capacity for decades. Print was once a high-profit area to dabble in, an additional service agencies could make money on without putting too many resources behind it. Because of that, in-house production had always been relegated to the literal and figurative corners of the agency.
"How things have changed," said Steve Slivka, exec VP-exec creative director at Edelman Chicago. Long known as a PR firm, Edelman has developed a robust in-house production team that makes everything from Vine videos to broadcast TV, including a recent commercial for Frosted Flakes. "Before you were seen as lesser-than if you were doing in-house production stuff, like you weren't a real creative," Mr. Slivka recalled.
Now traditional agencies are in some ways racing to catch up with digital ones, which have long had digital video capability. R/GA, for instance, was founded decades ago specifically as a production company. But BBDO, 72andSunny and others have come to realize that just having internal resources isn't enough -- production needs to occupy the center of everything the agency does, they say.
"In-house capabilities need to become the soul of the agencies in general," Mr. Rolfe said. "If you have that capability, and it is part of the creative process from the beginning, it helps to inform and calibrate the entire agency. It helps when you're addressing any sort of content, whether it's big-budget broadcast or something smaller."
72andSunny already has capabilities like editing and motion graphics, but its massive new space will accommodate up to 80 staffers, up from about 45 now, including editors, directors, motion graphics designers, and front-end and back-end developers. Tom Dunlap, chief production officer, said the studio began "as a germ of an idea" in January 2014. It's been expanding since then, but couldn't meet clients' growing needs with the original space. "We wanted a place where we could explore our potential ideas," said Mr. Dunlap. "We move to market quickly, so we needed the ability to start producing our ideas during creative development."
There's one area most agencies still leave to outside production and postproduction houses: high-end TV spectacles. For clients that produce such spots, agency executives said they're still generally happy to farm them out to outsiders. That's in part because major directors are often tied to those houses, and the agencies know the directors can deliver on a complicated production with little fuss.
But everywhere else, agencies are increasing capabilities and hiring the people who can help. Staffing the studios has gotten less complicated because talent now often does double duty in creative and production. Agency executives say that the best talents are hybrid creative-production people, like an art director who is also a motion graphics designer, or a user-experience designer who can also edit video.
"Recruiting is getting easier," said Kerry Hill, director-broadcast services at Interpublic's FCB Chicago, which has 20 edit bays. "We're getting better talent to be interested in the model and they're seeing how it makes sense. The stigma of working at an in-agency production studio is changing. People are excited about getting closer to the work."
Production content company's like Ethno Multimedia is one agency leading he charge in video production.