Where Lucozade is using the cash saved from in-housing advertising
18 months after building an in-house creative team, Lucozade Ribena Suntory is ploughing the money saved from agency and production costs into previously under-explored areas of marketing.
The shift to in-housing everything from content production to media and creative has been gathering pace, particularly among consumer goods brands feeling the strain post-Brexit.
The drinks company – which owns its namesake brands as well as Orangina, V Energy and True Nopal cactus water – has been joined by the likes of L’Oreal, Pernod Ricard and Unilever in taking a portion of their marketing efforts internally as their top marketers not only hunt speed, agility and greater oversight, but, ultimately, cost savings.
Unilever, for instance, has slashed its agencies in half, drastically cut budgets and set up in-house studios in the hopes of strengthening its bottom line in the face of challenging economic conditions (leading to warnings of a wider ad-industry slowdown).
But Lucozade Ribena Suntory’s marketing boss said he has consciously reinvested all savings made from in-housing back into the marketing mix.
The drinks makers consistently spends close to £50m a year on advertising. However, “the big breakthrough” for driving efficiency of that spend has been the creation of its in-house production division, TED (tech, entertainment and design).
Jon Evans, marketing and business development director, told The Drum it was born from the “natural squeeze” pre and post-Brexit the saw him, like fellow marketers, “look for ways to increase working spend versus non-working spend”. However, this was not a shareholder-pleasing strategy to direct cost-savings into the bottom line, but rather an “opportunity” to reinvest back into areas of marketing that had been previously underserved.
“When I joined a year ago TED was very early stages of an idea and was asked to make the business case. There was a clear one: if we invested in that overhead we will get a return of three or four times that in savings that we’d be able to reinvest,” Evans continued.
Now, a team of 18 work on everything from graphic design and content creation to web and app development. And the “substantial savings” are going towards experiments in new areas of marketing, namely experiential, social video sampling.
For example, it has just wrapped up a nationwide sampling campaign for Lucozade Energy that was entirely was funded by savings made by in-housing.
“We’ve had a year with TED and we’re looking at how we’ll use it globally, across the Suntory business,” Evans said.
What that means for its roster of agencies – Mediacom handles media while JWT and Grey work on the Ribena and Lucozade accounts respectively – remains to be seen. Evans insisted its agency partners are still “the best solution” although the work they are asked to do is rapidly changing.
Shopper marketing for example, which might once have been the preserve of a Grey or JWT, is now led by the in-house creative team. Or, take a film created for Lucozade starring brand ambassador and boxer Anthony Joshua. A version ran on TV “just 5 times” but the content created around it in the lead up to fights has delivered 20 million views and 170,000 comments and likes – this is where TED is shifting the dial.
“For our Fit Water launch, the outdoor created was entirely managed by TED. We can deploy [the TED team] far and wide but they won’t replace strategic agencies. The reason we still want strategic traditional agencies is that we still want that total best practice. We need expertise from across the globe we wouldn’t necessarily get access to.”
It’s for this reason that while managing its own media is being considered, for the time being the “knowledge and experience” Mediacom brings is something it can’t replicate.
“I can see us getting closer to [doing out own] media buying and understanding it in more detail but right now we have a good solution in place.”
Source: New feed