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businessinsider - 20 days ago

The biggest direct-to-consumer spender, SmileDirectClub, explains why it keeps pouring money into its own ad agency

SmileDirectClub has an internal agency that now employs more than 100 people. Chief Creative Officer Bruce Henderson, who joined earlier this year, said doing marketing in-house saves the company money and lets it know its customers better. He said 10-20% of revenue that could be spent on research goes directly to the holding company at bigger agencies that are better suited to multinational clients. SmileDirectClub still works with production companies and media agencies. Click here for more BI Prime stories. Bruce Henderson spent more than two decades at ad agencies like Ogilvy and IPG s Jack Morton. But now he s chief creative officer of SmileDirectClub, which does nearly all its marketing in-house. Founded in 2014, the Nashville-based startup has an in-house team of more than 100 people. As many companies most, recently, StubHub make headlines for dropping their outside ad agencies, posing a threat to the traditional agency business, SmileDirectClub has always done things on its own. Henderson said this approach lets it move faster and better understand its customers, using first-party data from email, social engagement, and visits to its real-life locations. Henderson, who spent 20 years at agencies like Ogilvy, says 10-20% of their revenue goes straight to the holding company He said the sort of agencies where he made his name are better suited to working with conglomerates that need to promote their complex product portfolios around the world in multiple languages. SmileDirectClub is more narrowly focused and changes its messaging frequently, which it can do the same day but which would take days or weeks for an agency to do, he said. Henderson added that 10-20% of a traditional agency s revenue goes directly to its holding company, while his team can invest more of its money in research, innovation, and ad buys. SmileDirectClub still uses outside agencies for production and media buying According to an October report from market research firm MediaRadar, the teeth-straightening startup is the single largest DTC ad spender, with a budget greater than $150 million during the first nine months of 2019. Henderson said the company uses a media agency to buy some of its ads, and SmileDirectClub, along with fellow DTC brands like MailChimp and Bombas, uses production companies to create content. Then there are one-off projects, like a recent event at Grand Central Terminal featuring comedy group Improv Everywhere and the Gay Men s Chorus. Still, Henderson said SmileDirectClub s internal team has enabled it to largely avoid using outside agencies. We re much more deeply inside the business than with an agency, he said. The CEO sits a few feet away from us. Join the conversation about this story NOW WATCH: Behind the scenes with Shepard Smith — the Fox News star who just announced his resignation from the network


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