Subscription television company Foxtel doesn’t do things by halves. Ranked in the top 10 Australian advertisers by spend, the marketing team is one of the country’s most sophisticated, having developed a hybrid in-house approach to complex areas of marketing including data management and programmatic advertising. Over the past three years, the company has also established Felix — an in-house agency to rival Australia’s best.
The in-house creative agency was originally conceived as a way to reduce the number of hands that touched the Foxtel brand and more effectively market its fully-owned channels and their many TV shows, according to Felix’s founding General Manager Narelle Vine.
Felix has also realised a secondary aim of generating better efficiencies from Foxtel’s creative and production budget.
“Efficiency was not the main driver for setting up Felix,” says Vine, who built her career in creative agencies, and joined Foxtel to establish its in-house agency just under 3 years ago.
“But there are significant returns that can come to a business like this if you know what you’re doing and you’re getting a high-quality output.”
Creative agency model under pressure
Vine joined Foxtel from her position as General Manager of Sydney agency The Works. Previously she had held roles in advertising operations, production and project management at some of Australia’s best-known creative agencies including GPY&R, M&C Saatchi, Whybin TBWA, Saatchi & Saatchi and The Campaign Palace.
“Initially my interest was in creativity, but I happened to find I was good at the business and management side,” says Vine. “I started out in advertising production and then moved into project management. It’s about being uber-organised and better controlling money, time and resources.”
Over the past decade or so, Vine saw the agency business, with its layered structure, come under increasing pressure.
“I could see the writing on the wall for advertising,” Vine says. “There was lots of downward pressure on margins and staffing issues were a consequence of that. Clients were pitching their accounts all the time. The people who would survive and prosper were coming up with new models.
“I could see clients were in-housing,” she says. “I wanted to dip my toe into the water client-side.”
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The name Felix, partially inspired by the ‘F’ and the ‘X’ in Foxtel, means ‘fortunate’ or ‘successful’.
Former Foxtel head of marketing Ed Smith brought Vine in to set up Felix as an in-house creative agency that could work with internal Foxtel channels to promote them and their programs using a range of different production models.
Smith says there were three main objectives at the time:
- Speed up and lower cost of fast-turnaround social campaigns
- Leverage Foxtel’s existing expertise in using TV content from making TV and film promos
- Reduce production costs for Foxtel’s main campaigns.
“Foxtel ran an almost always on acquisition marketing program, most weeks investing more than $1 million in media, with major campaign creative being switched out every 6 to 8 weeks,” Smith says.
“Our agency partners were greatly valued for their creative ideas, but we found that the total cost of production over a year wasn’t efficient. There were many areas where we would turn around work more quickly and cost effectively ourselves, particularly with video work based on clips and re-sizing creative.”
Smith says the efficiencies that could be reinvested were significant.
“For an advertiser with scale of Foxtel, and the skills our teams had as a media and TV company, we expected production efficiencies in the order of 20% to 30% once set-up costs were covered,” he says.
Bringing creative in-house also opened up social channels and shortened response times, allowing the team to respond quickly if an execution performed well.
“Setting up Felix allowed us to cut up promos for shows to be broadcast 0 to 3 days out in a morning, run them on social media from lunch time and be optimising them — all in the same day,” Smith says.
“Social promotion of content became a major new adverting channel for us during that time, and solving how we created fast, low-cost content for social platforms was a critical step,” he says.
Another reason for building an in-house agency was to protect brand consistency and find faster and better ways to market the large number of channel and program brands involved in the subscription TV business, Vine says.
“Foxtel had a lot of agency relationships,” she says. “And there is an enormous depth and breadth of content. It’s a really big business with a lot of touchpoints to get your head around as an external person.
“It’s a big ask to expect third-party suppliers to have that level of detail. We weren’t always getting the best representation of our content because there was so much going on. And it can be expensive and time-consuming to manage all that.”
A hybrid project management model
Felix handles thousands of discrete jobs a year. The level of professionalism and creativity is high, and the range of skills required is broad.
“A lot of people think it’s not hard to set up an in-house agency,” Vine says. “But there can be a big gap between the idea and the execution.
“Foxtel did have an understanding of what they were about to embark on,” she adds. “It’s enough to fully occupy a medium-sized agency in Sydney with one client.
“Foxtel knows the value of premium production, world-class creativity, strong strategic thinking, bolstering the brand and making the phone ring. You need high-calibre resources, and sometimes you have to bring them in from outside.”
Felix runs a hybrid model, selecting the best process for different areas of the business including the Customer and Retail Group, encompassing Brand and Content, Acquisition, Business and Customer teams, and even internal and offshore call centres.
Some jobs are managed through Felix from start to finish. Its 40 or so staff span the range of roles required for print, design, broadcast and digital production, as well as other disciplines and skill sets.
“Foxtel needs collateral, scripts, marketing material, advertising campaigns, digital work, people and culture work, corporate social responsibility support — it’s a massive organisation,” Vine says.
“We manage the things that we can do ourselves,” she says. “Many projects, we handle end-to-end. When we work with an agency partner, they do the high-level concept and strategy and we will manage the production.
“We may bring in external directors, depending on what the concept calls for – for example someone who’s best-in-class when it comes to humour — but we have really deep production skills in-house.
“We do most of the execution, except in some specialised areas, such as high-end sound design.”
At present, Felix doesn’t create ads for Foxtel’s own external advertisers to run on their channels — but it’s an option for the future.
“We are really just focused on delivering for Foxtel and connecting with our customers, present and potential. That in itself is a huge undertaking for now,” Vine says.
Establishing the in-house agency team
When it came to establishing Felix, Vine says it was set up like a traditional creative agency but without the many layers and associated costs in time and money.
“Two of the first roles I hired were Head of Production and Head of Account Service,” Vine says. “And Head of Design. We already had a Creative Director.
“We then started to map out our processes, and how we would work: infrastructure, hardware, software, project management, and how we would work together as teams.
“At the same time we were plotting out the number of people we would need. We started with broadcast people. We needed to import advertising and design people. We had to have designers, finished artists, motion, brand, retail, print, producers, digital people.”
A marketing process for managing the vast workload of the in-house agency was established.
“We’ve got some fundamental structure points,” Vine says. “Work comes into the Creative Communications Management team, which handles project management. It goes to traffic, which allocates resources and timing. Staff keep track of how their time is allocated as they would in a conventional agency.
“But we don’t follow a lot of the conventions of advertising agencies, such as multi-layered structures,” Vine says. “The mid- to senior level is where we have our people and we don’t indulge in all those layers and titles.”
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Ensuring quality of output
Among the recent work Felix has produced is the latest instalment of the Chris Hemsworth campaign featuring Foxtel’s iQ3, the Foxtel app and Foxtel’s Kids App; sports campaigns featuring singer Jessica Mauboy and promoting AFL coverage; and campaigns for marquee programs including Game of Thrones and Top of the Lake.
Felix was also involved in Foxtel’s recent rebrand.
“It’s much more accessible and inclusive now,” Vine says. We’re constantly pushing for work that is simple, single-minded and accessible. We’re allowing the content to be the hero and the Foxtel brand is in support of that.”
Vine says while there is still a stigma about the quality of work produced by in-house agencies in general, there are ways to beat it, such as establishing the agency as an internal partner rather than a supplier, upskilling staff and bringing in external expertise when possible.
“There’s a total stigma about in-house agencies and I wanted to knock a lot of that stuff out,” she says.
“You need to be on an equal footing with your colleagues. The agency needs to be seen as a partner rather than a service provider. The value of shared goals and culture is enormous in terms of team engagement, efficiencies and effectiveness.
“There is a real appetite in creative as well as account service for people to move from agencies to client-side but it can be hard to break in,” Vine says. “Here you’re not just getting a brief — you’re able to contribute to the business.
“One of the challenges can be working on just one brand, but at Felix we’re taking you into the world of broadcast and television and when you scratch the surface you could be working on almost anything.
“Foxtel has a lot of great things in place, such as career development, health and wellbeing programs, free Foxtel, tickets to events and a much more controllable work-life balance,” she adds.
“Also, it’s important to bring creativity in from the environments whose standards we want to match. We bring new people in on a contract basis for 3 or 6 months to complement our existing team and keep ideas fresh. The calibre of creativity’s really important. You don’t have to forego creativity and the culture that comes with that to work here.”
Skills for the future
Increasingly, Vine is hiring multi-skilled staff, or training up existing creatives in new skills. For example, ‘preditors’ at Felix write, film, direct and edit. A finished artist and retoucher on staff is learning grading, and digital designers code and develop as well.
“There’s a lot of multi-skilling and merging,” Vine says. “Those people are really valuable.
“We are constantly being asked to provide new and different resources. The business gives me funding and access to bring in new skills on an ad-hoc basis. We’re able to shape-shift in that way.”
The Felix dividend
Among the benefits of Felix to Foxtel are a better representation of the content that is being promoted.
“Working here, there’s a passion for plots and storylines, and you are best placed to tell those stories to Australia,” Vine says. “We are essentially brand leverage experts.
“There is also a real efficiency to being able to just walk around the corner and talk to the client.”
Felix also charges its staff to the business on a cost basis. While there are costs associated with hiring and housing those staff, it remains a big advantage compared with using external agencies, which typically mark up their services by between 200% and 300%.
“The savings since Felix was established have been significant,” Vine says. “The efficiencies we can deliver means the business can do more in other areas. It makes our life easier, our communications better and also delivers more to the business and to our customers.”
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