Lexus is doing ad deals directly with publishers

“This isn’t about us replacing agencies, but we do need to be in a position where we have the people internally who can hold a conversation with those partners as well as media owners,” said Spiros Fotinos, global head of brand management and marketing at Lexus.

Branded content, rather than media deals, will be the ones Lexus mainly leads on given they don’t always require the buying power of an agency to get over the line.

Lexus’ feature-length “Takumi” documentary on Amazon Prime is another example of how the business is brokering different types of media deals as a result of the internal expertise it now has. The film follows four Japanese artisans who have dedicated their lives to cooking, paper cutting, automotive and carpentry and links their dedication to the skilled people who work on every Lexus vehicle. The&Partnership worked with Lexus’ marketers on creating the film and brokering the distribution deal with Amazon.

“Amazon isn’t just a platform to host my branded content anymore; they’re a content creator, which means we can start to collaborate with them more closely,” said Fotinos. “Media owners are more open to collaborating differently to how they have worked with us previously.”

Moving forward, Lexus plans to recruit more data specialists. The advertiser wants to take more ownership of how data is used to measure, not target, its ads. Declining confidence in internal talent at advertisers is a big concern this year as recruitment becomes a priority. Less than 2 in 10 (14%) advertisers have high or very high confidence in their own teams compared to 22% in 2016, according to an ID Comms study of 129 advertisers across the U.S. and Europe.

“We need to make sure we have data specialists internally because agencies will make an informed decision on where best to spend our budget based on data whereas we can take the data and see if it fits with the wider business issues we may have to contend with, said Fotinos. “We can’t afford for our marketing department to get left behind.”

Lexus is two years into this plan in Europe where it has 30 agency execs from The&Partnership seated in its European headquarters. It has afforded Lexus marketers more opportunities to influence briefs much earlier than they could previously to the point where they’re able to tweak ads for local markets faster and earlier. Even in terms of marketers being able to attend shoots more frequently as a result of working in the same office as the agency.

Part of the reason the hybrid model has worked to date stems from the control Lexus has retained over it at all levels. Beyond brokering deals with media owners, the advertiser is also responsible for staffing The&Partnership’s agency team. When it set up the internal agency in 2017, it had 100 days to recruit the whole team and then integrate those staff into the corporate culture and process. Simultaneously, Lexus had to plan the last campaigns it had arranged with its old creative and media agencies, while developing new ones with the internal agency.

It meant that brand communications manager Emma Lane, who had been seconded to the headquarters to lead the transition, was involved in everything from sorting our car park passes to working through the new contracts. More importantly, the potential culture clashes between the corporate and agency worlds coming together in one location had to be anticipated.  “We were hiring all these new people and changing our marketing model and yet the biggest question on everyone’s lips was: What are these people going to be wearing?” added Lane. “They were concerned we were going to get an office full of people in shorts and flips-flops.”