Target, Best Buy's in-house creative shops part of wave reshaping ad industry

One of the Twin Cities' largest creative advertising agencies only has one client.

Target Creative's offices along Nicollet Mall look like any Minneapolis ad shop with breakout spaces, production studios and the obligatory multiscreen video game display. Its North Loop warehouse where it shoots a lot of its photography and video is reportedly one of the biggest sound stages in Minnesota.

But instead of working for a multitude of customers, Target Creative crafts the advertising content that makes up the Target Corp. retail empire, from the design of the boxes that its products ship in to the packaging and in-store displays of its own brands of groceries, baby essentials and children's home goods.

Many companies, like Minneapolis-based Target and Richfield-based Best Buy, have opted to grow their in-house creative advertising shops instead of relying solely on outside advertising firms for their needs, a shift that has reshaped marketing and the business models of independent agencies.

Design is a large part of what makes Target Target, according to Todd Waterbury, chief creative officer at the megaretailer, who speaks almost reverently on the "joyful experience" of shopping at the store and the brand's focus on its guests.

Waterbury leads Target Creative, an army of art directors, designers, developers, writers and producers whose purpose is to help sculpt the Target brand and all the ways consumers might experience it in stores, online, on television, or even as its trucks roll by on the highway.

"It is incredibly important for us to have the closest connection to creativity," he said, and at Target that means "to have creative people, to have marketing experts who day in and day out are focused on how we continue to invest the brand with meaning that reflects our values."

Target Creative, which was officially formed when Waterbury joined the company in 2013, has grown to become a 450-person content engine with about 300 local team members at its offices on two floors of Target Plaza III and its SuperTarget-sized North Loop production studios.

The proximity to the rest of Target's corporate offices allows Target Creative to be more responsive to changes and more connected to other aspects of the company's strategies outside of marketing, such as merchandising and supply chain operations, Waterbury said.

Target Creative designed the branding, which included the logos and packaging, for its Cloud Island baby wipes, diapers and other essentials that launched last month as well as its Smartly budget-friendly line of cleaners, personal care products and other necessities, which came out in the fall. It also has recently redesigned Target shipping boxes to incorporate images of its mascot Bullseye.

Target still works with international external agencies like Mother as well as local firms like Knock and Colle McVoy, but Target internal creatives are always embedded as part of the team.

Similarly, electronics retailer Best Buy also boasts an extensive, internal creative team that conceives, develops and produces its advertising from commercials to social media content and the marketing for the holiday and back-to-school shopping seasons.

Last year, the team led the design and implementation of Best Buy's brand refresh which included an updated logo (that hadn't been changed in nearly 30 years) and marketing campaign with commercials that focused on its blue-shirted employees providing tech advice.

Customers expect brands to be authentic about their culture and their values, said senior vice president Frank Crowson, who oversees all of Best Buy's marketing in the United States.

"The best creative work to me is the expression of who a brand really is, what the customer experience really is and the best that it has to offer," Crowson said. "And so, I think in a lot of cases, a team that is a part of that brand … can do a fantastic job of bringing that culture and that expression to life."

Last fall, the Association of National Advertisers (ANA) reported that 78 percent of its members had some form of an in-house agency in 2018, up from the 58 percent five years before. Most of those who participated in the survey said the workload of their in-house agency increased in the past year. Next month, the ANA will host its first-ever In-House Agency Conference.

It's a stark difference from decades ago when companies relied more heavily on independent agencies to come up with memorable catchphrases and other creative advertising to appeal to consumers.

In recent years, more companies have abandoned the "agency-of-record" business model in which they hire a firm to handle most or all of their marketing needs in favor of using an assortment of agencies to handle different aspects of their marketing on a short-term, project-by-project basis.

In-house agencies, if allowed to be truly creative, can be a good complement to independent agency partners, said Michael Fanuele, the former chief creative officer of General Mills.

In 2015, Fanuele helped form the Bell Shop, what General Mills used to call its internal creative house, to not only allow the consumer foods behemoth to be more efficient with its advertising dollars but also to make creativity the core of the company's marketing ethos, he said.

"I think too many corporations think creativity is something that they can buy. … I think something magical happens when a company gets creative," Fanuele said.

One of the Bell Shop's memorable marketing campaigns was a five-track mixtape it helped orchestrate for General Mills brand Hamburger Helper which generated considerable digital buzz for the company. Since Fanuele left the company in 2017, General Mills has restructured its marketing department and no longer uses the name Bell Shop, though a company spokesperson told the Star Tribune, "We have a variety of internal capabilities that we utilize in addition to external partners."

While some companies have a culture that supports creativity, like Apple Inc. and Target, it can be difficult to maintain that creative fire in most corporate settings and to attract talent to continue to foster creativity, Fanuele said.

"Most companies are still perceived as difficult places for creativity to flourish. It's why so many agencies have slightly adversarial relationships with their clients. … In that tension, great things are born," he said.

Some agencies have also re-imagined their relationships with clients.

Last year, global digital agency Wunderman launched Wunderman Inside, an agency operating model to provide digital services onsite to its clients. The concept was modeled in part after Wunderman Minneapolis' satellite firm of about 100 staffers at Best Buy's Richfield campus.

"It's a partnership," said Pat Petschel, managing director of Wunderman Minneapolis on his group's work with Best Buy. "We are in a lot of the same meetings together. … Their goals are our goals."

Not all internal agencies have grown. Technology company Intel Corp. began to lay off internal creative group late last year as the company decided to focus more on marketing to other businesses as opposed to consumers.

Fanuele, who has a book coming out in June titled "Stop Making Sense: The Art of Inspiring Anybody," said creativity should be nourished no matter what the source.

"I don't know if there's a right model or a wrong model, but I'm certain that leadership that doesn't demand its marketers to be as bold and brave as possible … is abdicating their responsibility to do great marketing."

Nicole Norfleet • 612-673-4495 Twitter: @nicolenorfleet