For the past 20 years, The Clorox Company has operated its internal creative agency the Electro Creative Workshop, which also works with the company’s external creative agencies of record FCB Global and McGarryBowen. Over the years, Electro has morphed and grown into a bicoastal 120-person team that manages the $6.5 billion company’s design, packaging and digital needs for its 26 brands, including Glad, Burt’s Bees and, of course, Clorox, while acting as an agency of record for the company’s smaller brands.

And now, it’s helping other brands, through the ANA, build their own agencies. “We want to further enhance that dialogue behind the evolution and momentum of in-house agencies because it’s a big focus of discussion right now,” said Clorox CMO Eric Reynolds.

We spoke with Reynolds about what is driving Electro’s growth, Clorox’s DTC strategy and relationship with Facebook.

What is the value Clorox sees from managing an internal agency?
My boss thinks it’s a lot of people, but I’ll tell you, there’s quality and value. We can get a lot of work done at a lower cost for work that has to be high-quality, but doesn’t have to be perfect. My budgets are not exploding, they’re holding. We are fortunate; we still invest very nicely in marketing, but the amount of stuff we have to produce is going up exponentially and we have to find a way to economize. One way is to leverage our in-house agency.

Electro is now a 120-person strong team, what is driving its growth?
Our agency only works if our brands demand work from them. For the most part, the agency is not on a retainer, so in order to keep the 120 people there, there has to be demand for the work, and what has been the biggest demand is the need for more content. We’re producing more content than ever before and publishing faster. We have added more people, different kind of creatives like strategists, and now have content creation studios both on the east and west coast where we do video, audio and post-production.

How does Electro work alongside Clorox’s agencies of record?
The trick is figuring out the right swimlane for each. There’s always going to be some tension and overlap — that’s inevitable as we figure this marketing landscape out, but typically, when we get all those smart creative people in a room, everyone wants to advance the brands. So far, that has worked for us, rather than threatening our external agencies with our internal one.

Would Clorox ever bring media buying in-house?
For us, the value isn’t as clear for us. Never say never, but every year, we look at the basic case for in-housing — what the requirements and benefits are– and keep a checklist of things. When we look at those factors, we are content with our current relationships with OMD and AKQA. There is a lot of expertise they bring that we value.

One goal of Clorox’s for the next year is to think more like a direct-to-consumer company. What is the strategy here?
We see the DTC space as both an opportunity and threat, and we’re leaning into the opportunity side. Quite frankly, we see DTC brands as being much more consumer-centric than we have in the past if we’re honest. As a fundamental strategy to create demand at scale, we’re going to continue to sell through other retailers’ stores and e-commerce platforms, and less on building large DTC businesses — it’s hard to out-platform Amazon or Target.com or Walmart.com. But I do think we can use more knowledge around data to be more real-time so we can be there at those moments. We still have several brands that transact, like Burt’s Bees, Renew Life and Rainbow Lite. We will continue to advance those and are hiring DTC talent to work on those businesses, but we’ve always won by being where consumers want to buy, and right now, they want to buy on Jet, Chewy and Amazon, so we have large teams of people obsessing over how we can be the best we can be on each one.

Is your DTC talent coming straight from DTC companies?
Yes, they understand the landscape well and think and act differently than many of my other team members.

What is one hot marketing topic from this past year that might cool off in 2019?
Brand safety and transparency. In the past year, we’ve seen tremendous amounts of engagement from our partners like Google and Facebook. Facebook is waking up to what it means to shoulder the burden of responsibility of hosting so much data. I admire its lofty vision of building communities, I just need them to be adults, and realize they have to do a lot more to maintain that vision and keep it safe.

Are there other ways to do that than by pulling spend?
Yes. We believe we’re more of a force of good engaging their thought leaders, rather than pulling spend. Facebook fundamentally wants to do the right thing. If it’s guilty of anything, it’s their naivety. If we just pull spend, we’re not engaging them. Right now, they are responding to those types of conversations, but if that doesn’t work, we can try money. People still want to be there and interact, so I think the best thing for the good of all is for Facebook and YouTube to succeed.

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