New US president of the company that built Unilever's ad agency explains why in-housing is a greater threat to ad agencies than consultancies

• You & Mr. Jones' Oliver, a company that builds in-house ad agencies for clients like Unilever and Adidas, hired Kristi VandenBosch as US president to help expand in North America.
• VandenBosch, who worked at agencies like TBWA\Chiat\Day in addition to launching Revlon's internal agency, said the in-housing trend is not slowing.
• She said ad agencies should fear companies like hers more than consulting firms such as Accenture and Deloitte.
• At the same time, she said in-house teams can never competely replace outside agencies.
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Kristi VandenBosch is the new US president of Oliver, a company owned by You & Mr. Jones that builds and manages in-house ad agencies for clients such as Unilever, Adidas, and Microsoft.

The executive, who worked at traditional agencies like FCB and TBWA\Chiat\Day before building Revlon's in-house division, told Business Insider that the advertising in-housing trend is speeding up - and that it's a bigger threat to traditional agency business.and says that holding companies should be far more fearful of in-housing specialists than consulting firms like Deloitte or Accenture.

Of course, as the president of an in-housing company, she has a vested interest in this prediction playing out, and skeptics in the agency world have pushed back.

But VandenBosch points to the fact that Oliver has grown much faster than more traditional agencies.

Some executives think in-housing is overhyped, but VandenBosch says it has led to big agencies pitching for low-level work

London-based Oliver, part of "brandtech" firm You & Mr. Jones, hired VandenBosch as part of an effort to expand its presence in North America. Since launching in 2004, Oliver has grown to more than 3,000 employees in 25 countries.

VandenBosch said that the company has grown year-over-year by 100% to 150% for each of the past four years in the US - far beyond the 10% that would be healthy for a traditional agency.

Meanwhile, she said, agencies are now competing for business they wouldn't have bothered touching in the past.

"I see very large agencies fighting now to resize banner ads," VandenBosch said.

She also downplayed the idea that big consulting firms would cannibalize ad agencies, saying few can offer real savings to advertisers.

"If they can't go in and do a consulting gig for less than $750 and hour, then I guarantee you they're not going to be able to build an in-house agency for $75 an hour," she said.

One thing CMOs should never do is compare their in-house teams with outside agencies

Oliver's agencies, which VandenBosch calls "implementations," participate in standard RFPs. For example, Unilever's U-Studio has restructured itself three times to account for changes in the packaged-goods giant's marketing strategy.

But a key lesson VandenBosch drew from her time at Revlon is that companies' in-house advertising teams are not the same as outside agencies - and most in-house agencies can't completely replace outside agencies because they were not built to pitch for new business.

"Don't pitch your in-house agency against [WPP's] Johannes Leonardo. They will become demoralized," she said.

For this reason, VandenBosch insists there will always be a place for agencies like Wieden and Kennedy and Droga5 to make award-worthy campaigns while companies like Oliver and RedHouse handle more of the everyday work like banner ads and ecommerce product shots and the occasional big-budget TV campaign.

VandenBosch says more agencies will buy themselves back from holding companies as in-housing continues to grow

In-housing has not been universally successful.

Intel's acclaimed agency Intel Inside closed in late 2018; several agency executives told Business Insider that a Super Bowl LIV pregame ad for Procter & Gamble's Secret, which was created by its own agency, was mediocre at best; and few can forget Pepsi's 2017 effort starring Kendall Jenner that critics accused of co-opting the Black Lives Matter movement.

But VandenBosch argued that Intel's agency closed because the company hired a new CMO who adopted a dramatically different and that even the best agencies make bad Super Bowl ads. She added that anyone skeptical of in-housing should look to Apple's poaching of top agency talent and the work produced by its agency, Omnicom's Media Arts Lab.

She said the trend will continue to grow as clients, particularly established companies in industries like packaged goods and beauty, feel pressured to produce more content with the same amount of money.

Meanwhile, as ad holding companies continue to chase vanishing growth, VandenBousch predicted that more agencies will buy themselves back and that big players like Omnicom and MDC Partners will spin off holding companies of several agencies that operate as a team.

There will be winners and losers - but for now, Oliver appears to sit firmly in the former group.