Katie Dally is a seasoned marketing executive with experience on both the agency and client sides, most recently as the General Manager of Brand, Creative, and Operations at Endeavour Group.
Katie shares her experience transitioning from an agency leadership role to a client role, exploring the cultural shifts and challenges faced during this transition.
She discusses the importance of understanding the role of marketing within organisations, the need for strategic thinking in agencies, and the impact of AI on the marketing landscape.
And Katie highlights the necessity for marketers and agencies to adapt and innovate in a rapidly changing environment while maintaining a focus on human-centric skills.
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We need agencies to get out of Bondi and into Cabramatta, which is where the real Australia is, and the eastern suburbs bubble is fine to a point, but actually, then that does influence and bias your thinking.
Transcription:
Darren:
Hi, I’m Darren Woolley, founder and CEO of TrinityP3 Marketing Management Consultancy, and welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
If you are enjoying the Managing Marketing Podcast, please like, review, or share this episode to help spread the words and wisdom from our guests each week.
We’ve recently noticed an increase in the number of agency leaders making the transition to the client side, and the transition of some marketing leaders to the agency side.
Now, while it may appear that the two roles are simply the two sides of the marketing coin, they do offer quite different perspectives on that coin, particularly when it comes to considerations such as in-house agency services, alignment of priorities, and the impact of AI on roles of agencies and marketers.
To present both perspectives, please welcome to the Managing Marketing Podcast a senior marketing executive with leadership and transformational roles on both the agency and the client side, most recently, the general manager of brand creative and operations at Endeavour Group, Katie Dally.
Welcome, Katie.
Katie:
Hello, Darren, thank you so much for having me. It’s a joy to be here.
Darren:
It’s a real pleasure. Because we’ve worked together, certainly when you were agency-side, and you have had a significant career history working agency-side, which is why it’s such an interesting conversation to have about the difference between the two.
Where and how did you get into advertising?
Katie:
That’s a great question. I actually remember reading through the UAC guide. Remember when there were those printed books, which were a bit like the Yellow Pages, and stumbling across a Bachelor of Communication, reading about the beauty and nature of advertising, and going, “That’s it, I’m doing that?”
I was in year 10 at the time, and I never really looked back. And agency life has formed almost two decades of my career, and it is the DNA and the lifeblood of who I am. So, I’m very grateful to have grown up in that world with some very clever people.
Darren:
And it’s also taken you to some interesting agencies, but also around the world, hasn’t it?
Katie:
Yeah, it has. I definitely got the UK itch when I was two years into my advertising career here, and decided that that’s where the birth of strategy was. And so, I had to be there and learn that firsthand.
So, I ended up doing five years at Leo Burnett, where I worked with some of the most brilliant strategic minds, working on some of the most influential brands in the world, like McDonald’s, and managed to win a few Cannes Lions along the way, so that really set the bench high for what was to come after that.
And then I moved to South Africa, thanks to meeting my now South African husband and spent a few years there. Which was an incredible opportunity because Cape Town (which is where I was based) just has the most incredible entrepreneurial and creative spirit.
So, to see that hustle mentality in the richness of that culture was an incredibly enriching experience. And then back to Australian home soil, where I worked for both hold cos and indies.
Some of my most fond memories were working on KFC, where we launched some of the most impressionable campaigns, like Shut Up and Take My Money, and took home some Effies and some other creative awards there.
And certainly, most recently, my time at Thinkerbell, where we grew that Sydney office from a handful of people to about 50 in under three years was an incredible opportunity. And I worked with brilliant minds, like the great Adam Ferrier.
So, I’ve been so blessed to have worked with incredible brains and talent, and to be part of an industry that’s grown and evolved incredibly, almost out of sight, over the last few decades certainly.
Darren:
Yeah, and look, I have just a personal note. I think if you’re going to work in South Africa, there’s no better place than Cape Town. I mean, not only entrepreneurial, but incredibly beautiful as well. And it’s a great part of the world.
And as for KFC, I’ve got twin 8-year-old boys that love being able to say, “Shut up and take my money.” So, it’s certainly entered the lexicon.
Katie:
Well, that was the plan, Darren, so I’m very glad to see that still in the vernacular, even years on.
Darren:
And that’s the measure of a really good piece of creative is that it becomes part of the vernacular, like the Yellow Pages and others have just become part of that.
So, with that really solid, interesting, diverse career in agencies, what then got you interested in making this leap from Thinkerbell (where you were a general manager) across to the client side at Endeavour Group? Did they make you an offer you couldn’t refuse?
Katie:
I have had the great fortune of being surrounded by some incredible client role models whilst I’ve been on the agency side, and I’ve watched those CMOs have significant influence within their organizations.
And I think for me, what I realized was I wanted the opportunity to do the same thing and for marketing to be able to prove its worth and actually drive great work through an organization and to be able to drive that creative spirit and sense of innovation through an organization.
And I think there’s only so far that an agency can go in doing that and achieving that because they tend to sit in the promotional P space, if you like.
I certainly felt like I saw an opportunity at that point in my career to want to take that step over to client side, and think about how I could be an effective marketer in that space. And really driving, I think the values that are imbued in a creative agency and the thinking that comes with creativity as a profitability multiplier in that setting.
So, I needed to make sure that I was pushing myself and growing myself outside of where I felt like I’d learned an incredible amount, but I was probably getting to the ceiling of that growth and learning from an agency point of view, and Endeavour Group arrived.
Darren:
And I think it’s also incredibly useful to see both sides because while some or many of the capabilities and skills can be applied to both sides, there is certainly some significant differences. What are some of the differences that you noticed?
Katie:
There are a significant number of differences. And what I will say is that when I first moved over into a client-side role, the one thing that struck me incredibly was that I realized how small a bubble the agency world actually is.
And what I mean by that is we (in agency) are very aware of each other, are aware of the other agencies in our orbit, are aware of the work that they’re producing, and I think that’s all a good thing. You build your reputation within that context.
And so, when I moved over into a marketing role, I quite naively (if I’m really honest) didn’t appreciate that that reputation that I had built and that followed me around when I moved to different agencies, didn’t precede me at all.
In fact, that reputation didn’t transfer at all, because I went from being in an agency of 50 people in my home office in Sydney, to an organization of 30,000 people, a marketing function of 180, and so who on earth is Katie Dally?
And that probably sounds a little bit arrogant, but you have to start from scratch because no one knows who you are, and marketing is such a microcosm of a much bigger organization and a multitude of functions that are delivering for an organization.
So, you have to be really clear when you make that move as to what you are in that organization to do and build trust from the ground up, as you of course would do in any new role. But there’s a lot of borrowed equity that comes when you move from agency to agency.
Don’t be under any false pretense that that existing equity that you’ve built in the brand that you’ve built for yourself when you (and if) ever decide to make that move to marketing will follow you because it won’t. And that was a huge, huge learning for me.
Darren:
It’s interesting that observation, because within a category, there are many organizations that are subsets of a category. Then marketing is a subset of the organization, and then agency is a subset of marketing.
So, what I’m seeing in your experience is this idea of going literally from a big fish in a small pond to a small fish in a very big pond. And it is quite a difficult transition to make. I think all through our lives, as you grow and develop, the way to do that is to always put yourself … if you ever find yourself a big fish in a small pond, it’s very hard to grow in that environment.
You really do need to embrace and make yourself uncomfortable. I always know I’m doing something that’s personal growth when I feel uncomfortable about it.
Katie:
Absolutely, Darren. And I think when you’re in an agency environment, your entire environment is consumed by creative thinkers, strategic thinkers, and you are all rallying around the same cause, and the culture that you build is all based on what you are building from a DNA point of view.
You realize in a corporate context that you are such a small part of a much bigger playbook. And actually, that cultural jolt, I think, is really real. It’s probably one of the biggest things that when people say to me, “Oh, how did you manage that cultural shift from agency to corporate?”
It is very real because it is no longer a creative culture, although I think it’s incumbent upon you as a marketer to create that creative culture, but the macro culture of the organization isn’t that. You are a microcosm within the macro culture.
So, I think it’s really important to work out, “Okay, therefore, what is the role of marketing within that organization?” And I think I very quickly learned that in order to be successful, you need to be very, very aware of which function within your organization does have the greatest sphere of influence and what is driving your organization so you can well place how marketing can contribute to that.
So, in Endeavour’s context, I learned early on that we were not a marketing-driven organization, we were a merch-driven organization. So, if they had the loudest voice at the table and they were the most influential, what, therefore, is marketing’s role in that context?
And then how do we make sure that we are influencing in the right ways, respecting the different levels of hierarchy and influence within those different functions across the business?
Darren:
And it may be surprising to many people in agencies, but very early on at TrinityP3, we developed this framework of saying, “Is marketing within this organization a leader? Is it a strategic driver and leader of the organization?”
And there are a handful that come to mind when you think about that really, and marketing in its fullest sense. We’re not just talking about promotion, we’re talking about product distribution, pricing. All of the four Ps are what we’re talking about when there’s a marketing leader.
And you can see that in organizations like Apple and Nike, and where it’s product-driven, but it’s product marketing-driven with a focus on consumer.
The next level is where marketing is like a colleague of the organization. That it’s got a seat at the table, but it’s not necessarily driving it. It’s there to work with the other elements. And I think the worst place you can end up as a marketer (but it’s very common) is where marketing is seen as a service supplier within the organization, and where you are pretty much being dictated to.
And in those cases, it’s also because marketing is being often stripped down to just being the promotions department. “Here’s your promotions budget, just go and spend it on the things that we need you to spend it on.”
And the way agencies need to interact and support that will vary depending on how marketing’s position within that organization.
Katie:
So well said, Darren. I think being on the agency side for so long, I experienced that firsthand. Whether it was the client that was a leader as a marketer, whether it was a colleague, whether it was a service, as you’ve neatly put it.
And I think to anyone that is thinking about making the move to client side, that is a really important filter you need to consider. Is the organization you’re going to walk into a marketing-driven one or not? Some of my greatest successes that I mentioned earlier at McDonald’s and KFC, QSR, are a marketing-driven business.
They’re one of the few organizations of which you will see marketers get promoted into managerial positions. FMCG, you’ve talked about Nike and Apple. And I think that’s really important for decision-making. If you are going to make that jump to the other side, how much do you feel that marketing needs to be a leader in the conversation that is driving the outputs and outcomes of the business?
Or are you comfortable being in an organization where it is the colleague and you have a voice, but you probably don’t have the loudest voice? And some people actually would find that a challenge in and of itself. How can you make marketing more influential? And there is opportunity for that to happen.
And I would say Endeavour was that for me. Marketing was a colleague, it wasn’t the loudest voice in the room. But it did present the opportunity to make sure that we could educate the business around the power of marketing and help them see the power of the customer.
And in fact, we had some real successes with the business understanding and comprehending the power of a customer strategy, and that actually driving the overall business strategy and vision that was being set for the next few years.
So, there is influence that you can have depending on the particular nature and culture of the business. But I think it’s important to understand that before you take a step into your new front door.
Darren:
I was invited to one of those breakfast meetings at one of the big accounting firms. This is a few years ago, just before COVID. And I ended up in a room with all of these CEOs. I don’t know, they obviously made a mistake because they’re all big private companies doing a hundred million plus.
And so, there was lots of suits, and I was there in my jeans and my sports jacket or my blazer. And the conversation was about growth. And almost every CEO was talking about their sales team and how sales do this, and sales do that, and sales deliver growth.
And I just put up my hand, and I said, “Well, what’s the role of marketing?” And it was really interesting because first of all, they all burst out laughing, chuckling. And one of them said, “Oh, the coloring-in department.”
And I think that’s where that term comes from, is when marketing has been stripped down to not really being marketing, but being the promotions department. Where it’s seen not as a growth driver or a contributor to growth, but spends the money just telling people what they’re doing or doing “ads.”
It’s where marketing gets a really poor rap because it’s not actually marketing, it’s promotions. And what agencies often fail to understand is it is only one of the four Ps. It’s an important one if you get it right, but it’s only one of the four Ps that actually is traditionally part of the marketing mix.
Katie:
And I think it’s very, very important that we have a look around at the moment of what is going on within the marketing world and the corporate or business world. Because one of the greatest things I think that’s happened in the last few weeks is the promotion of Anubha from CMO to-
Darren:
At Lion, yep.
Katie:
Growth Officer at Lion, to now CEO. And she’s one of the few stories, I would say, over the last few years where you can actually see the palpable imprint that she is having on driving a marketing function and for the business to see the power of marketing and the impact and the impact that marketing is having on a business to drive their growth agenda, that has then seen her now take on the reins as the CEO of that business.
And there is absolutely no reason why every single CMO in this country cannot do that job. It’s actually the reason for the Marketing Academy Fellowship Program is to prepare CMOs for that leap. But actually (as you have well said), marketing is the engine room when it comes to driving growth.
But there is still this misattribution from a lot of the c-suite members, where they are not seeing the value that can be brought, despite marketers and CMOs doing their best effort to continuously educate and prove that that is indeed the case.
So, I really hope – and I’m genuinely thrilled, that news of Anubha’s promotion has made my year. I hope that’s the first of many. And I hope that that is shifting the landscape around how businesses are seeing marketing’s impact on their organizations because it is profound. And you can see it in the growth metrics when actually you take a look under the hood.
Darren:
Yeah, I think it’s interesting because there have been a few over time, but I also think it depends on the category. Because there are categories that have traditionally been product-engineering-operations-focused. And that marketing is then bolted to that to do the things that those people are either uncomfortable or don’t want to do.
And so, even if you get a CMO getting promoted into a senior leadership role, there’s still that massive weight of not only changing the culture of the organization but changing the culture of the category.
Because it’s interesting, marketing will often want to break the rules of the category as a way of differentiating themselves, whereas organizations like to play within the category norms to be part of the category.
It’s almost like the basic philosophy of business varies between marketing and the organization because part of it is being distinctive, being different, differentiating yourself in some way, is what drives marketers to find a place in the market for that brand or business.
Katie:
That’s so pertinent when it comes to the alcohol category, and obviously-
Darren:
Well, there’s so much legislation around what you can and can’t say like automotive, like financial services, but yeah, it’s a very sensitive area.
Katie:
And I think for us at Endeavour, looking at the products that we sell align to the cultural trends and the customer demands, there’s this constant tension between the products that we create, the products we serve, the products we sell, and actually taking a wider view of the macro cultural trends and shifts.
So, in alcohol, at the moment there are pretty seismic shifts going on with Mill Z We like to call them – Millennials and Gen Z (Mill Z), and actually how they are shape-shifting their behavior around alcohol consumption.
If you then reconcile that against Endeavour’s purpose, which is creating a more sociable future, I think it’s marketing’s job to go, “What does a more sociable future look like in the next 3 to 5+ years?”
And how do we envision that and make sure that the business and the propositions and the products can support that, and what is staring us in the face over the next few years? Versus I think it’s easy to double down on the core and the products that you sell, and there’s a lot of merit in doing that as well. But how do we have both?
For me, I was always thinking about how do we have a short-term delivery view, which is shareholder returns, making sure we’re maximizing our financial impact, coupled with how do we also balance that with a strategic longer-term view on always having an eye on the customer?
But even beyond that, understanding cultural trends and making sure customers and culture are never forgotten, and that we’re not doubling down so hard on what we need to deliver in the immediate, that we’re actually missing the moment to make sure that the future is being future-proofed.
And it’s not an easy job, but that is the job of marketing to be in the zeitgeist, and to be thinking about appreciating and pushing the boundaries on what the opportunities for the future are. But it’s not an easy job when there are immediate things that need to be delivered for the business.
Darren:
I think often I hear marketers saying they need to be the voice of the customer or the voice of the consumer. But at the point you just made, then, it’s beyond that. I think it was Henry Ford who said, “Don’t ask people what they want because they’ll say faster horses.”
You can be the voice of the consumer, but you also need to work out what are the trends that the brand or business should be tapping into that create new opportunities?
Katie, I just want to change the conversation a little bit here because one of the things I suddenly thought of is, I’ve never met a marketer yet that has said to me they have enough budget or enough time. It seems to be one of those roles that is just all-consuming. There seems to be so much to do and so little time and resources to do it.
How did you come to terms with that? Because I know on the agency side, you are often being very busy because you’re responding to what the client needs. But how (as a marketer) did you find managing time and resource?
Katie:
It’s a difficult juggle, I think it’s fair to say. I think in summary, marketers wish they had more time to do marketing. But what they’ll find is that in the midst of all of the jobs to be done, (we like to say), there are a myriad of things of which a lot of them are not marketing.”
They are managing the marketing risk profile, or making sure everyone’s trained on the spam act in regulatory compliance. There’s managing and influencing stakeholders, there’s sitting in merch meetings, there’s capability uplifts, there’s board papers to be written. And a lot of that or most of that is not marketing.
So, I think for us as a team, we’re always trying to find the opportunities to make sure that curiosity was always at the cornerstone of what we were doing to make sure that we didn’t get completely stifled by all of the non-marketing things that were critical and that we had to do.
But what it does reinforce is the scope that you have tasked your agency with delivering is such a small facet of a marketer’s time. And so, it’s probably the most interesting time they’re going to spend when they come together with their agency partner.
But what that agency partner delivers is so critical because it’s actually the thing that is the most enthusiastic for marketers, but we get to spend the least amount of time doing. But a stark reminder for agencies, I think that just delivering that promotional P is very far down the jobs-to-be-done list for a marketer, and there’s so much else that they have to deliver.
Darren:
Well, that’s an another good point is, is I’m really interested in what are the things that you know now as a marketer that you wished you knew when you were on the agency side? Or to phrase it in a different way, what are the things that agencies should be doing if they’re looking to build deeper and more valuable relationships with their clients?
Katie:
I think agencies need to reimagine themselves and their role as being in the commercial ideas business, not in the advertising campaigns business. And what I mean by that is they need to be playing outside the promotional P. That’s not just incumbent upon them, though. I think clients or marketers tend to give them that scope.
But where I have seen agencies be incredibly successful (and it was something that I was really passionate about at Endeavour), was finding the opportunities for your agency partners to come in and strategically problem-solve on a genuine business need that is well outside the realms of advertising or campaign creation.
We did exactly that with BMF, where we were looking at our customer mission and constructing what our customer mission was going to be,, and how that was then going to become the underpinning of a significant amount of our business and what our business was going to stand for.
So, I think and I know from … (and we obviously worked together on Lion when I was at Thinkerbell) … but Thinkerbell did a similar thing for Lion in terms of landing their purpose about making the moment mean more.
So, great examples of agencies need to be playing outside of advertising and campaigns. But also, what I would encourage marketers to do is set aside some budget. And I know that’s not easy in these difficult financial and economic times, but try and ring-fence some budget for strategic problem-solving with your agency partners, where they can really add value in things that you don’t even know you need yet. But it is not delivering X campaign to X customer during the sales period.
And that for me is where agencies are going to play in the most interesting spaces. It’s also how they’re going to drive the right relationship, and the right level of trust with the executives. Because until that is happening, the execs are always going to see marketers and their agency of choice as being deliverers of campaigns.
Darren:
It was one of the main reasons that marketers came to us to say they wanted to select a new agency. Up there in reasons for changing agencies where they just weren’t proactive enough. They didn’t come to us thinking outside of the box. And we’d go to the agencies and go – one of the complaints because wouldn’t want to go into the pitch if it was something that could easily be fixed.
And I’d see the same mistake over and over again. The agency would have this huge pile of beautifully bound documents that were all “proactive” of things that they’d offered. But when you actually went through them, they were really just sales techniques of trying to get the client to spend more on what the agency … so, it’d be a new campaign or idea or a new media opportunity or something like that.
And it wasn’t resonating as proactive because the marketers could see or saw it and framed it as the agencies just trying to sell me more services to get more of the budget rather than thinking differently about my business, and coming up with an idea that’s not really core to their job.
Katie:
And I always felt like an agency was an extension of the marketing team, obviously being in a client role. And I think we talk about that partnership a lot. Whether or not that’s actually playing out in truth is another thing, but it genuinely matters that the agency partner (when we talk about proactivity) is not coming with another idea.
Actually, the agency needs to be looking at my share price. It needs to be looking at trends analysis. It needs to be looking at why I’ve turned up in the FIN review that morning and what’s going on in the macro that’s affecting our business performance.
That is a partner who is coming and saying, “Hey, this is going on for you. What are we going to do about this? How do we get in front of your executives and actually share these trends analysis?” That for me is proactive thinking.
I think sometimes agencies feel like proactivity is an idea. It’s another idea, and it’s another campaign that’s a solution. And that’s where the expansion of thought and what could be brought to that partnership needs to shift.
Darren:
You reminded me of a project we did in Asia for quite a big Asian-based bank, and they had two holding company or network agencies, and an independent agency. And the network agencies were complaining because this independent agency was getting more and more business, taken from their scope to the independent.
And what we discovered was literally in every major office around the region, they would have someone who was employed by the agency but literally spent 90% of their time getting around the client office, talking to people, asking questions, going back to the agency, coming back with ideas to solve all these problems that were not necessarily advertising opportunities, but just could use some creative thinking.
And so, people just got to the point of going, “Well, my go-to place is to go to the independent agency every time I’ve got a problem.” Whereas the network agencies had their scope of work, and every problem was another ad campaign. And it was so interesting how that approach had worked so well by having people actually in the office just being part of the operation.
Katie:
Yes, I think the expectation from any marketer of their agency is that they know and understand their business as well as they do. That is never going to happen if the agency is bound by their scope delivery.
And so, back to that thought earlier around how do marketers or clients make sure there’s sanctioning time, budget for strategic thinking. That’s exactly the point of that. And it’s tricky because agencies are time-bound because of the way that agencies are structured financially, and how they’re remunerated.
So, if you are spending time on something that isn’t scoped, how are you then recuperating the cost of that time that is spent? But there needs to be a much better equation between clients and agencies that allows for that to happen.
Because if you as an agency are not seen to understand our business as well as we are, you’re actually not contributing in a way that we need you to, because you (one would hope) as an agency partner have more time to be thinking about things in diverse ways that marketers are not because they’re too busy doing Spam act training. And that is really, really critical, I think, for agencies to understand.
One of the things I realized pretty quickly when I joined Endeavour (which was wonderful to see) was that my executive team were out in store almost weekly, actually. I was quite shocked by that, and shocked because they’re very busy people. These are the executives of an ASX-listed organization. How do they have time to get out into store? Well, they make time.
Darren:
You make time. Yeah, absolutely.
Katie:
A day a week, at least they were in-store, they were in hotels, they were talking to our team, they were talking to customers. And I can honestly say that-
Darren:
And consumers. Customers and consumers, yeah?
Katie:
Always. And they were always at the front line and bringing those insights back to the business. Now, if the executives of an ASX-listed company are doing that, then I think agencies need to appreciate that it is their job even more so to be doing the same thing. And again, if that is not part of your scope, find a way to build that into your scope with your client and your partner.
Because we need agencies to get out of Bondi and into Cabramatta, which is where the real Australia is, and the eastern suburbs bubble is fine to a point, but actually, then that does influence and bias your thinking.
So, there needs to be a new way of approaching how agencies are much closer to the coalface of real Australia. And there needs to be time carved out to do that in terms of the remuneration model that’s set up.
Darren:
Yeah, I know this is last century, but when I worked in advertising, I worked on a number of US service businesses, and they would have (as a standard) the agency team working on their business would have to go and work in the business for at least, I think it was, half a day a month. You had to do like four hours a month. Which is not a lot.
But it was interesting the number of people that felt that that was somehow below them. And it wasn’t so much that you were doing work, you were just seeing how the transactions actually happened, how the service was being delivered, and it was an incredibly insightful time, and it was four hours a month.
Katie:
I think it’s absolutely essential. I don’t think there’s any other way that you can learn. When I was doing store visits, it was some of the most enjoyable time because there were just profound things that you wouldn’t expect that would unfold right before your very eyes.
Again, KFC do an incredible job of that. When you join that organization, you go in-store and do in-store training for, I think it’s at least two months. It should be the norm in every-
Darren:
Yeah, I’d probably eat the store profits in wicked wings. It’s my one weakness is KFC Wicked Wings. Every time they’ve got a promotion, I’m up there.
Now, the other thing that you took on in this marketing role was in-house agency. I’m not sure, was there in-house there when you joined, or was this something that you brought to the Endeavour group?
Katie:
No, there was an in-house agency when I joined Endeavour that had been growing and building organically over time. Which tends to be the case that has evolved within organisations that had some incumbents, as we see in-housing now, all people are building them from scratch.
So, yes, I did have an in-house agency, and then we shapeshifted that as the AI automation and technological shifts have bestowed upon us over the last few years. But in-housing is incredibly prevalent.
The US and the UK are much more mature in their in-housing than we are in Australia, but it’s awesome to see how much in-housing has taken off. I was at the in-house Agency Council Summit yesterday actually, and there are now over 40 members within IHAC, and growing certainly.
We’re also seeing, I think it’s close to 80% of marketers working with an in-house agency in some shape or form. So, they are here to stay. I think they will continue to grow. I think the role for them and the role for in-housing versus an external and that hybrid model is still finding its feet.
And I think being right in the midst of AI and what is coming at us at the moment, will shape what the role of in-house agencies is in terms of where they play within the funnel, and I think that depends on the organisation. But in-house is definitely here to stay. And I think it’s a wonderful addition and weapon in your armoury of an organisation if you have one.
Darren:
I’ve just noticed over time, though, and absolutely agree that so many of them have previously grown organically without a lot of strategic input or framework. It’s just on a needs basis. But the other thing that I’ve noticed is often a lacking of strategic thinking in where that fits in their overall roster of agencies.
Because very few organizations with in-house agencies have given up all external suppliers, there’s often some sort of a hybrid model. And again, we’ve identified three different groups.
There’s one where the marketing team’s working with all their external agencies on one side, and somehow the in-house agencies over here, as away from them, as part of like an extension of the marketing team doing things only in-house.
That differs greatly. Where you then see the in-house agency is actually part of the roster, and you start to encourage interaction between the external agencies and the in-house agency so that they work more collaboratively together. We see that as the collaboration model.
And then the third one, which you’ve seen not so much here, though there’s a couple of examples, but in the US, where the in-house agency actually becomes the lead agency, and the other agencies, external agencies report into it or are managed from that so that they are a true extension of marketing, but they’re managing all of those relationships and interactions so that the marketers can focus on all of those other things you talked about that marketers need to do, and looking at the outputs of that relationship.
And I think those three models, it’s really important for an organization to think about, “Well, where are we and where do we want to be, and what works best for us?”
Katie:
I think the marketing maturity of the organization, its ambition for fostering a creative culture are paramount to then be able to determine, “Well, what is the right model for you, and what role does in-housing play?”
When you talked about some organizations that have in-housing as their core thrust of their creative output generator, AB InBev is a great example of that, and they have won multiple Cannes Lions as a result of the work that has been done in-house.
But there are so many other variants of that. And I think what I have learned is there is absolutely no one model or size that fits all. And a big part of what I was doing at Endeavour was creative transformation across the entire organization.
And as part of that, we did have to look at all of our creative partners, internal, external, and how that would orchestrate together on what was going to yield the best magnetic, creative output, which was our creative vision.
And I think where I started is certainly not where I thought we would end up in the end, but it’s because you have to learn what the fabric and the nature of your business needs, what you are working with in terms of talent, what’s coming at you in terms of technological advancement, and then creating something I think that’s custom and bespoke for your organization is actually the most important thing.
I did not find during my transformation journey that there was any one thing I could pick off the shelf and was going to be right for us. We had to carefully create something that was custom accordingly.
So, I think you’ve got to understand the fabric of your organization, what it needs, and then best to understand the market around you and the talent and delivery that you need from that talent to then deliver first creative outcomes.
Darren:
Now, you raised AI, and there’s those that see AI as a threat to creativity, and there’s those that see AI as a provocateur of even greater creative thinking. Where do you sit on that?
Katie:
It wouldn’t be a podcast without talking about AI now, would it, Darren?
Darren:
You cannot have a marketing podcast without a conversation. And look, you raised it first, so-
Katie:
I did. And oh, should we, because I think that we have a freight train coming at us right now, and we don’t know what we don’t know yet. There has been a lot of conversation around AI won’t take our jobs, but those who use AI will.
I think there’s some truth in that, but I also think that’s a convenient mental narrative that we’re telling ourselves right now of 2025. I think the broader context is that we’ve got AI tech giants that are racing to win at all costs.
So, let’s not be under any false illusion, they’re focused on profit, and winning that race will potentially lead them to completely disregarding the negative consequences for humanity.
So, this is a really big topic, and we, I think, need to acknowledge that there’s going to be huge job displacement that is not coming, it’s already here. We saw ANZ laying off 3,500 employees this week.
So, I have this thought around we need to be shifting from what we know is knowledge-based work, which is based on processing information that AI can do faster than us, to uniquely human-based work instead. So, from knowledge work to human work.
I don’t know if you’ve heard, or if anyone listening has heard The Diary of a CEO Podcast with Mo Gawdat, who’s an ex-Google executive. If you haven’t listened to it, I encourage everyone to. He believes that AI will not create enough new jobs to offset the ones that it eliminates, especially in white-collar professionals.
So, I’m sounding all doom and gloom here, but I think we need to be really aware of what is coming at us. The freight train is coming at an incredible pace, but he does talk about the indispensable skills that most jobs will be replaced by from AI.
And thankfully, because we are in the business of people and understanding people, I think what we need to be focused on as an industry is that those uniquely human attributes are what AI cannot replicate. So, when I say that, I mean things like (it’s obvious) emotional intelligence and empathy. Our ability to understand and connect with other humans is a skill that AI cannot replicate.
And jobs that require deep human interaction and understanding, which is really the business of what we’re in in marketing, is at the forefront of that. And when it comes to creativity, true original creativity, not the generative AI variety, is a human trait that I genuinely think will remain valuable.
And Mo says a similar thing, that it is a tool for artists and creators and cannot be replaced. I don’t think Michelangelo would’ve ever come out of AI. So, that shift from knowledge work to uniquely human work, I think, is really interesting.
And then the other thing I’d say is someone that I worked with actually in my London days, who now works at Jellyfish, and Jellyfish is part of the Brand Tech Group, which I think are just absolutely on the forefront of all things AI automation tech.
He wrote an article in Marketing Week last week where he talked about if ad tech democratized ad media, then Gen AI is democratizing ad creative. And I love that summary of really what’s shifted for us as an industry over the last decade.
But he also goes on to talk about AI improving the quality of the creative output because discerning human audiences will not tolerate low-quality AI slop. And I think that is absolutely bang-on. There is going to be, and there already is, and we are seeing it, there is so much AI slop everywhere.
How do we make sure that we are not (as an industry) continuing to deliver the slop? In fact, it’s our job to do the absolute opposite of that. So, yes, I definitely think that AI and creativity will live in ultimate harmony once we get there. But I think we have to acknowledge the freight train coming at us, and there’s a lot that we don’t know yet.
Darren:
Yeah, I find it interesting at the moment that almost all the conversations around AI (particularly in marketing and advertising) are about getting productivity improvements and reducing cost.
But then I was talking with some global procurement team, and I said, “You do realize that even if AI allows you to scale, to produce a thousand pieces of creative work an hour, there is still not an in-house counsel who is willing to not go through every single one of those to make sure they’re compliant with the category legislation?”
We haven’t got to that point that the AI is not only going to create the work, but also approve it as well. And while approval processes are already in most large organizations holding up, what’s the point of speeding up the responsiveness of coming up with ideas and producing them when approval processes are still lagging well behind?
So, I think there’s a long way to go, but I agree with the point you made. I’m just aware we’ve been talking for quite a while, and we’ve actually run out of time. There was a few extra topics I wanted to cover with you, but I’m afraid we’re not going to be able to do it, Katie.
But thank you so much for sharing your perspective on the two sides of this marketing coin, the agency and the marketer. It’s been really insightful, and I want to thank you for being so open and generous in sharing your perspective.
Katie:
Oh, thank you for having me. It’s a wonderful industry we find ourselves in. So, whatever side of the fence you’re on, keep doing what you’re doing and push for better work, and we’ll all be better together.
Darren:
Now, look, before you go, at the end of a hard day at the office and you get home and you sit down, what is the drink that Katie Dally reaches for to relax?
