Over the past decade, Creative Industry Surveys have shown a growing trend of companies investing in building and developing in-house creative services resources, often referred to as In-House Agencies (IHA). While some are small (fewer than 10 resources), others have grown to sizes exceeding 100 talented resources. It is undeniable that well-run IHAs are generating value and are here to stay.
As organizations embrace having internal creative resources, the question of whether all work should be done in-house or not may come up. The answer? It depends. Most healthy IHAs also have a range of external agencies that they partner with for different project needs. Some reasons include:
Support during peak periods
Specialist skills that are difficult to bring in-house due to infrastructure costs
Services that are not core to the IHA
Cella 2023 In-house Creative Industry Report
In this blog, we are going to look at the opportunities and challenges of shifting production design work to an external production design agency.
Many IHAs had their beginnings in more executional production design work, otherwise referred to as Tier 3. This is often a cost of entry when establishing an internal creative resource as it is seen as low risk and positive return. As IHAs grow and mature, they evolve into being more strategic creative partners for their organizations to drive creative solutions to support the businesses and brands. It is at this point where the creative resource growth and focus brings into question how to handle the production design aspect. Do we keep it in-house or outsource it? There is no simple answer, it usually requires a detailed assessment of the IHA organization, yet is frequently driven by the key factors of management burden, workload fluctuations and head count control.
Some common options are to:
leverage external contractors or utilize production agencies for overflow work when internal capacity is tight, or
to shift a portion of production work externally, usually by work type, or
to move most of the production work to external partner agencies
Let’s take a look at some pros and cons for using external production agencies as a work management strategy.
Key benefits of an in-house agency using an external production design agency versus keeping the work in-house include:
1. Reduced costs. Surprisingly, external production design agencies can often produce high-quality work at a lower cost than in-house agencies. They are structured with economies of scale in the production space and can spread their costs over a larger number of projects.
2. Increased speed and agility. External production design agencies can often turn around projects more quickly as they have a dedicated team of professionals who are focused on production and are not exposed to and disrupted by company dynamics in-house teams experience.
3. Greater flexibility. External production design agencies may be more flexible than in-house agencies with ability to work to a variety of budgets and deadlines. They are also willing to collaborate on creative ideas.
4. Improved quality. External production design agencies often have a higher standard of production quality than in-house agencies. They are producing high-quality work for other clients and are keeping up-to-date on the latest trends and technologies.
5. Access to specialized expertise. Utilizing external production design agencies opens access to a wide range of specialized expertise which can be a huge benefit for in-house agencies that may not have the resources to hire or train their own staff in these areas.
6. Reduced risk. External production design agencies can provide production guidance and support throughout the process to help in-house agencies reduce the risk of project failure.
7. Improved morale. With an external agency taking care of production design needs, it can improve morale among in-house staff as it allows them to focus on their core competencies, freeing them up to be more creative.
There may also be some potential risks with engaging external production agencies. You will lose some control over the creative process, be exposed to security risks, need to manage communications and cultural differences, monitor quality standards and keep an eye on budgets to avoid cost overruns. With well thought-out processes and management principles, you can minimize your risk exposure and develop a high level of trust and an effective relationship with your external partner agencies.
Working with an External Production Agency
As your in-house team grows and matures, it is an opportunity to focus on more Tier 1 and Tier 2 work. This is where an external production agency can augment the in-house team by taking on the Tier 3 executional and production work to free up internal creative resources.
An external partner agency should be considered as an extension of the in-house creative team, managed by the in-house creative group. In a long-term relationship, they may provide dedicated resources aligned to lines of business within your company and should develop in-depth institutional knowledge to meet the company's brand and product guidelines. This is something that most agencies may claim to provide but most often miss the mark on.
As an extension of your in-house team, it is important that the external agency be integrated with your team's overall operational processes and technology for a seamless operation. Many project management and digital asset management tools have the capability to include external users while controlling the degree of access via permissions and profiles.
You may also find that some external agencies may engage other third parties to produce work associated with your account. This should be clearly defined for transparency and include related controls to ensure quality and security.
External production agencies can be great partnerships for in-house creative agencies to enable continued growth and quality for the company. Selection of external agencies should be done very intentionally with a full review of capabilities and business assessment. It is also recommended that longer term relationships establish annual objectives and performance criteria that would inform an end of year performance appraisal. Most external agencies will seek feedback on how they are doing to ensure they are meeting your goals and expectations.
Where to Start
If you are interested in learning more about how to structure your in-house agency and work with respect to using an external production agency, reach out to Cella Consulting for more information. If you are ready to engage an external production agency, consider finding out more about Cella’s production group The Bench and whether it is a fit for your organization.