Risk Management for In-House Agencies
As advertisers continue to increase bringing agency services in-house, it is important for them to understand and consider deploying best-in-class risk management practices to avoid the exposure of damaging brand equity and minimize overall legal risk.
There are benefits and risks to consider before bringing agency work in-house. Boston Consulting Group conducted a qualitative and quantitative survey to understand the marketer’s perspective on this topic. Four areas of concern rose to the surface.
How do we attract the right talent for our in-house agency?
The issue of talent acquisition is especially prevalent at companies in smaller cities. Creative talent tends to collect in major metro areas, so companies outside of New York City, San Francisco, and Chicago looking to attract candidates may need to adjust compensation packages to entice potential employees to move. Remote work environments are an alternative that may be suitable for some organizations. Technology allows teams to work together, no matter where their home bases may be.
How do we keep the talent we’ve hired engaged and energized?
Talent engagement and attrition prevention is another issue that brands are concerned with regarding in-house agencies. Creatives may fear that working on the same brand repeatedly may stall their careers. Companies need to create an environment that inspires creativity. If there is an option for the in-house agency to work on multiple brands, that may be a way to keep the team energized. On-the-job training and workshops can help keep creative skills sharp. Celebrating success at social gatherings is also an important part of employee engagement.
How do we ensure we maintain a healthy degree of creative tension?
Creative tension is important to maintain between the in-house agency and its internal clients. If the tension is too slack, groupthink may occur, which puts the brand at risk for delivering lackluster advertising or worse. Hiring a team diverse in age, seniority, and personal and professional backgrounds can help ensure many perspectives are accounted for during the creative development process. Some brands may consider asking external agencies to review the in-house team’s work. Sharing work internally among legal or public relations partners can bring additional points of view into the development process.
Will we be as disciplined with our in-house agency partners as we are with our external partners?
Processes, such as briefing, defining scopes of work, and providing feedback, must be in place for in-house agencies to thrive. Without process and discipline, internal creatives may become task-takers rather than strategic partners. While informal requests or feedback via email or instant message may be quick and easy, it can start to erode important practices that should be followed throughout the lifecycle of any project.
Managing Legal Risk
When building an in-house agency, brands are often focused getting the right designers, writers, and creators in place. However, it is equally as important that operational issues are addressed, and legal compliance is a major part of that.
Solutions for Managing Legal Risk
- Establish an experienced internal team. This team may include a lawyer familiar with advertising issues who can spot common issues and provide support and guidance. A legal or business affairs person with an agency background could also be a great asset.
- Develop a formal legal clearance process.
- Work with trusted outside partners and know when to use them. If the internal team is out of their depth on a particular issue, check with a law firm, outside agency, or consultant.
- Create form agreements and playbooks. These resources increase operational efficiencies because they provide a common set of guidelines for risk tolerance and common legal issues such as buying art or negotiating with talent.
- Outsource high-risk areas. Internal agencies should be conscious of where an external agency may be better suited to handle the production and legal challenges of a particular project.
- Implement rights management tools. The ability to track assets and the rights the brand has can prevent violating those terms.
- Provide ongoing training. To prevent and protect against legal issues, brands should supply training to staff.
Legal Red Flags
Copyright. Uncommon things that can be protected by copyright include tattoos, graffiti, fonts, and commissioned work. Even if artwork appears in the background of an image, the brand must obtain legal permissions or face possible copyright infringement issues.
Stock material. There are two types of stock materials: royalty-free and rights-managed. Understanding the difference and knowing the nuances of using stock photography assets is important. There can be legal implications for modifying stock photos or portraying the model in the photo in an unflattering or controversial way without disclaimers.
Talent. While talent often prefers short-form agreements also known as “deal memos,” it behooves brands to put a long-form contract in place. The long-form contract offers more protections and clarity. Other issues related to talent are SAG-AFTRA union issues, payment processing, and social media disclosures.
Q&A with Keri Bruce, Partner at Reed Smith LLP; Petros Paranikas, Senior Partner and Managing Director at Boston Consulting Group
Q. Can you talk more about avoiding groupthink?
Petros Paranikas: Groupthink is great if you are the group leader because that means you are always right. You want to create a set of rules that help you balance the picture. That’s where external perspectives are helpful.
Q. Long-term contractors are the norm. Any ideas what’s coming for new rules and laws regarding that trend?
Keri Bruce: Last year California had a big case decision that changed the way they analyzed if someone is an independent contractor or not. That is an area of concern for a lot of clients. It applies to freelance staff and influencers they are hiring.
Q. What is the risk of using influencers?
Bruce: So many brands are contracting with influencers. It’s a matter of having your contracting process and your guidelines. You have someone monitoring it. You have a duty to monitor them to make sure they are making adequate disclosures.
Q. What is the global trend like for in-house agencies?
Paranikas: Depending on the country, the relationship between the creative team and the marketing team can be very different. It varies by geography. If you’ve brought your agency in-house in the U.S., and you try to execute the exact same template in Europe, you may be surprised by the results.
Source
"Risk Management For In-House Agencies." Keri Bruce, Partner at Reed Smith LLP; Petros Paranikas, Senior Partner and Managing Director at Boston Consulting Group; Nate Perkins, Principal at Boston Consulting Group. 2019 ANA In-House Agency Conference, 3/15/19.