When Michael Perdigao decided to quit ad agency life to go to an in-house agency 11 years ago, the most common reaction he got from agency friends was that he was selling out.
“Most of my friends told me I was crazy, a sellout,” said Perdigao, today the president at The Wonderful Company and head of Wonderful Agency, the in-house marketing and advertising agency for the company behind Fiji Water, Teleflora and Wonderful Pistachios. “The common thing was that if you couldn’t make it in the real ad world, you’d go in-house.”
Fast forward to now, and that talk seems largely outdated. Bringing advertising and marketing capabilities in-house has become common in a market where marketers are constantly looking to cut costs and gain back control. At a time when traditional agency models feel irrelevant, what The Wonderful Co. has done seems downright prescient.
Previously known as Fire Station, Wonderful Agency was born out a complicated arrangement where the agency and the brands shared an owner, Roll Global. Roll Global was renamed in 2015 to The Wonderful Co. The company is backed by billionaire couple Stewart and Lynda Rae Resnick, who also worked with director Morgan Spurlock for “Pom Wonderful Presents: The Greatest Movie Ever Sold,” the 2011 documentary about product placement and endorsements.
To bring Perdigao on board, the Resnicks had a simple pitch: “We’ll create and acquire new brands steadily, so those working in-house will have a constant stream of new business.”
For Perdigao, that was a good proposition — it meant focusing on actual product and no longer finding and pitching for new business. “As you move higher as an ad executive, you spend more time working on new business than you do working on advertising,” said Perdigao.
Today, Wonderful Agency has 150 people and is growing steadily, adding 20 people in the last 12 months alone, which has been its biggest growth year to date, said Perdigao.
This week, the agency launched a new campaign for Fiji, including two television commercials, social buys and print, to promote a new product called Fiji Water Sports Cap. Creative is done in-house, led by chief creative officer Darren Moran, and the agency also handles all media and planning. This follows a $1.1 million campaign (the agency’s largest digital campaign to date) two weeks ago for Pom Wonderful, according to the agency.
Marketers bringing agency capabilities in-house is a common trend these days. From giant companies like Chase and Verizon to smaller ones like The Wonderful Co., there has been a movement from marketers that question the economies of scale that agencies purportedly bring. That, plus an overall shift in priorities due to digital media and how money is being spent, means in-house programmatic can be cheaper.
There are challenges, for sure. For Perdigao, who also sits on the Association of National Advertisers’ in-house agency board, the biggest question is how the in-house marketing team can get permission to do some of the work it wants to do from higher-ups at the company. Another question is how to allocate costs — in-house agencies often struggle, he said, with managing internal budgets.
Another issue is keeping creative talent happy, which means separating them from the corporate part of the company. Wonderful Agency is building a new 22,000-square-foot office in Los Angeles near The Wonderful Co.’s corporate office that will have, in Perdigao’s view, more of a creative feel than the rest of the company.
As for the oft-repeated excuse that agencies can negotiate better media discounts than in-house teams, Perdigao isn’t buying it. “We hired real media buyers from places who know rates,” he said. “Plus, that’s more beneficial for us from a pricing standpoint because they don’t have to worry we’ll share with other clients. It’s all for us.”
For Moran, who joined Wonderful Agency in April 2017 from Grey New York, an in-house agency that does both media and creative solves what he thinks is one of the biggest issues in advertising: unbundling media and creative. “The reason I came here was so I can walk two doors down, and talk to the head of media and make something happen.”