The trade body for UK commercials production companies, The APA, has joined with similar organisations worldwide to send an open letter to clients warning them about the rise of ad agency in-house production.
In recent years, advertising agencies have increasingly persuaded clients to use the agency’s own in-house production departments rather than specialist commercials producers in order to sweep up more of the advertising budget. Commercials producers complain this is often against the client’s best interests and that the process can be opaque for clients.
The open letter has been signed by commercials production company trade bodies worldwide in the major ad producing markets including the US, Canada, Brazil, Mexico, South Africa and across Europe.
The APA’s message to clients says the Independent World Producers Alliance letter “is important because we believe agencies directing you toward their own in house production offering are in many instances obscuring your access to the best directing and production talent and to value.”
“Please read the letter in full but in summary it explains that the best directing and production expertise is in the independent sector and the open market is the best guarantee of value for advertisers – as against the choice of a monopoly supplier in the form of an agency in-house production entity.”
“We ask advertisers to ask two simple questions if their agency proposes producing films itself:
1) Why is that better for my brand than working with independent producers who
compete openly to deliver the best quality film at the best price?
2) Is the agency acting primarily in my best interest or their
own?
The letter in full from the Independent World Producers Alliance
Dear Advertisers,
Independent production and post production companies are a vital pillar of your brands’ success.
Our ability to execute individual creative, technological challenges at all levels is well known. What may be less known is that at the core of our businesses, we discover and nurture, in addition to representing, the world’s leading directors, editors, AI specialists, digital artists and pro-duction talent. This allows us to carefully source the best talent locally and globally for each individual brief. As businesses, we finance, develop and stand behind them to deliver distinctive and bold campaigns and strategies for your brands.
We are your most competitive, experienced, innovative, executive and servicing partners in the world. The extensive and diverse supply of the best talent via independent production companies creates a perfect market for brands accessing their services.
Our model is simple and proven: open competition. Independent producers fight for every project on creativity, expertise and price. Through transparent bidding, we apply all our ingenuity to maximize a project’s potential while delivering the best possible value, all in service of the brand message. You choose freely, knowing you are getting the best outcome: the strongest creative output at the fairest price.
The system works because we are judged solely on the final creative deliverables. We invest maximum creative and production value and ingenuity, sometimes at our own financial risk, because our reputation and your trust depend entirely on the work we deliver.
Today, this model is being undermined. As agency holding company networks consolidate and lose market share of their agency business to consultancies, independent agencies and marketers own in-house agencies, many are internalizing all elements of production as part of their own business and profitability models.
The best directing, editing, production and visual effects talent is with independent production and post companies, so what agency holding company in-house departments offer is not of the same calibre. However, their survival relies on structural profitability, no longer putting the role of long-term creative “agents” and partners for your brands as their top priority.
When agencies produce in-house, competition is distorted:
- In-house entities are mostly shielded from competition, the exact same competition which allows clients to obtain the best pricing for the highest creative value through their independent partners ;
- When the agency includes its in-house production against the independent sector in the bidding pool, the agency may have a conflict in choosing between its own interests and the needs of its client ;
- Often holding agencies seek to credit some productions as “co-productions”, to inflate their creative legitimacy although the film has truly been produced by the independent production company and its directing talent ;
- Proposed Margin-sharing models by in-house productions, could prioritize agency profit over production quality for your brands, ultimately weakening the creative output.
We understand that you are often told that in-house production is “faster” or “cheaper. “ History shows the opposite: when ambition, quality, and brand value matter, transparent competition delivers stronger results. The only way to manage costs and true value is through open dialogue, fair bidding, and transparent production circuits with you in control.
We are not asking you to protect our businesses. We are asking you to protect the strength, distinctiveness and credibility of the process that has developed over decades in the interest of your business.
When agency stock prices influence decisions being made in the work being done for you, it should give you pause. If your agency proposes to produce your work in-house, we encourage you to ask these simple questions:
Why is this better for my brand than working with independent producers who compete openly to deliver the best quality film at the best price?
Then ask yourselves: Is the agency acting primarily in my best interest or their own?
Together, we shape and produce contents that make your brands famous!
Jon Creamer
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