Dive Brief:

• Intel is disassembling its internal creative group Agency Inside, following a shift in strategy and an executive shakeup, Ad Age reported, citing a person familiar with the matter. The agency, which employed about 90 people, has started laying off staff, but will keep about 30 people, according to sources cited in the report.
• The move follows Intel's decision to devote fewer resources into consumer-facing marketing and focus more on business-to-business. The shift could benefit Intel's external agencies, such as McGarryBowen, the company's creative global agency of record for consumer marketing, and TBWA, which handles B2B.
• Agency Inside was created in 2014 under then-CMO Steve Fund, and was charged with revamping Intel's 50-year-old brand image to be more innovative. The efforts included high-profile Super Bowl spots and helped Intel improve rankings on lists like Interbrand's best global brands. Fund was replaced as CMO earlier this year, with Michelle Johnston Holthaus, SVP and general manager for sales and marketing, serving as interim CMO. Teresa Herd, Intel's global creative director, handled Agency Inside's daily management.

Dive Insight:

The move by Intel to cut back on its in-house shop is counter to the industry-wide trend of more companies creating internal agencies or bringing certain marketing functions in-house. Intel says it is refocusing its marketing strategy to be "more B2B and ecosystem-focused," which is more in line with the company's recent expansion into more products and industries, according to Ad Age. B2B marketing often involves a longer path to purchase, which could dampen the efficiency of an in-house agency and negate one of the main benefits of an in-house agency -- the ability to quickly react to market trends and deploy new campaigns.

For brands focused on consumer-facing marketing, in-housing remains popular for its ability to cut costs and help brands be more nimble. The number of advertisers with in-house agencies has increased to 64% from 42% a decade ago, according to a report by Forrester and In-house Agency Forum. According to the Association of National Advertisers, 78% of marketers are working with some type of in-house agency this year, up from 58% in 2013.

The dismantling of Agency Inside, which met with a successes, doesn't necessarily reflect that in-house agencies are ineffective. Since launching Agency Inside, Intel has worked to create a more cohesive brand image and messaging by examining its B2B and B2C functions. The company had embraced celebrity ambassadorships and incorporated tech products into live events in effort to target millennials. Agency Inside was responsible for the drone show at the 2018 Winter Olympics, which earned Intel the highest Facebook and Twitter engagement during the games.

By retaining around 30 Agency Inside employees, Intel may be looking to support its automated marketing efforts. In In July, Intel said it was piloting a new video and content measurement platform from SimpleReach that allows brands to track owned, publisher partner and influencer video performance in one place. The platform aims to let marketers and influencer partners authenticate social media accounts and offer insights to help personalize content and distribution channels.

Along with the CMO change, Intel's CEO Brian Krzanich resigned in June after he admitted violating company policy by having a relationship with an employee. The company is also searching for a permanent CEO, while former CFO Robert Swan is serving in the interim.