INSIGHT: Production set to challenge the creatives

Production houses, as the name suggests, typically focus on the secondary stages of advertising development. And while the final rendering of a TV commercial or a website may be highly creative, the production house has rarely been the first port of call for a client looking for idea generation.

But that could be changing. The recent economic downturn, the ongoing ‘digital revolution’, and the realisation that no single discipline holds a monopoly on creativity, are increasingly prompting clients to look outside the accepted model.

Keith Weed, Unilever’s global CMO, is just one example of a marketer who, while aware of the value of agencies, is also quite willing to employ non-agency models.

Jon Wilkins, the Sydney-based founder of Naked Communications, says that while disintermediation of ad agencies by clients has been at play for some time in the US and Europe, it is now happening with greater frequency in this region, particularly in highly developed markets such as Australia and Japan. While it is not yet the norm, he says in some cases big clients are adopting the approach as a primary mode of operation. Particularly in Tokyo, he says, production companies are actively seeking “more flexible ways of working”.

Cost is certainly a factor in the shift. “Clients are contacting us directly and asking how they can do things cheaper,” says a producer in Australia who wished to remain anonymous.

Enquiries are not usually driven by a belief in the creative superiority of the production house, although with more creative talent moving production-side that is increasingly the case. Often, improved technology facilitates in-house production by advertisers, which is subsequently refined by the post-production company. And the rise of procurement is seeing international adaptations, which would typically be handled by agencies, assigned to production houses able to complete the task to a higher standard and more cost effectively.

Paul Ward, regional operations director at BBH, which recently expanded its Singapore partnership with London-based production house The Mill, admits that things are changing and says even in India several production houses have become creative businesses in their own right. But he denies the developments are a threat. “Complete bypassing is happening in some cases but we would all be surprised if it started happening regularly,” he says. “Adaptation and repositioning is being taken away from agencies but their task is still origination and I can’t see that changing.”

Nonetheless, BBH’s Singapore venture highlights the fact that production houses are forming deeper relationships with agencies and brand owners, particularly in the field of digital, where they are often involved in the creative process from the beginning. Wilkins agrees that production houses are often better placed to handle modern digital platforms than traditional agencies are.

A grounding in technology combined with an influx of creative pedigree means the line between an ‘agency’ and a ‘production house’ is blurring. R/GA, which also recently opened in Singapore, was one of the first to make the transition from producing film to becoming a full-service interactive agency. More will undoubtedly follow.

One thing production houses lack, however, is the ability to manage difficult client relationships. They are also understandably wary of making a full transition for fear of biting the hand that feeds them. Given the respective strengths of advertising and production, closer partnerships in the style of BBH and The Mill could emerge as a more widespread compromise model for the future.

This article was originally published in the May issue of Campaign Asia-Pacific.