StubHub says it will cut its agency fees by as much as 40% in 2020 by taking its advertising in-house

Getty Images

StubHub offices in Chicago.

• EBay-owned ticket exchange StubHub just launched an internal ad agency with the help of in-housing firm Undnyable and said it expected to reduce its agency fees by 30% to 40% in 2020 this way.
• StubHub said its cost per acquisition is down 10% since it created the internal team three weeks ago.
• StubHub said it wanted to be closer to the customer and save money.
• Still, StubHub isn't entirely self-sufficient. It continues to use an agency, Starcom, to place its ads.
• Click here for more BI Prime stories.

EBay's online ticket seller StubHub has jumped on the in-housing trend, creating an internal ad agency with the help of in-housing firm Undnyable.

Meg Ciarallo, StubHub's senior director of global brand marketing, told Business Insider that StubHub's six to seven agencies didn't justify their costs and that their campaigns' mixed messages were confusing to consumers.

She assembled StubHub's division over a five-month period with the help of Undnyable, whose founder and former agency creative director Justin Hooper also facilitated the process at her previous employer, SoFi.

StubHub still uses Publicis agency Starcom to place its ads.

Ciarallo cited a recent meeting between her creative and search engine marketing teams that she said wouldn't have happened in a more traditional setup to show that the benefit of having an internal agency is in the ability to dig into the performance data.

"On top of it all, it's much cheaper," she said.

StubHub says cost per acquisition expenses have dropped 10% since it took creative work in-house

Ciarallo said that StubHub planned to put 30-40% of its agency expenses into buying ads in 2020. She said the CPA (cost per acquisition) had decreased by about 10% in the first three weeks since her new internal team was formed.

Holding companies like WPP and Dentsu are trying to defend against in-housing by promoting an "embedded" model where traditional agency teams work alongside clients' employees. Ciarallo argued against that model, saying people who have worked for the company long-term simply understand it better.

She described creatives as a unique breed of human whose full potential only comes out when properly managed.

"When I started, there was a small in-house team that was de-motivated because they were doing the cast-off work," she said. "That's not the way to treat the people who know the brand the best."