No More ’1984′: Apple Moves to In-House TV Ad Creation

Apple (NASDAQ:AAPL) is producing more of its own television commercials in what appears to be an overall shift in the company’s marketing strategy. According to unnamed “people with knowledge of the matter” cited by Bloomberg, Apple has created an internal television advertising team that includes at least two people that the Cupertino-based company poached from Media Arts Lab, a unit of the TBWA\Chiat\Day ad agency that has created some of the iPhone maker’s most memorable commercials.

As noted by Apple spokesperson Amy Bessette, the recent “Your Verse” iPad Air commercial that featured Robin Williams reading poetry was made by the company’s own television advertising team, rather than an outside agency. Bessette indicated that the latest Apple television spot, “Strength,” was also created by Apple’s in-house team. As seen in the video above, Apple’s most recent television commercial emphasizes the health-monitoring and fitness-tracking capabilities of the iPhone 5S. The advertisement’s emphasis on fitness follows the recent unveiling of the HealthKit health data repository and Health app at the company’s ongoing Worldwide Developers Conference.

The creation of an internal ad team and the hiring of two former Media Arts Lab employees reveal an overall shift in Apple’s marketing strategy, as well as a growing rift between Apple and its longtime ad agency. Omnicom Group’s (NYSE:OMC) TBWA\Chiat\Day has been creating advertisements for Apple for over thirty years and had a well-established relationship with legendary company co-founder Steve Jobs. TBWA\Chiat\Day was the ad agency behind Apple’s iconic Ridley Scott-directed “1984” commercial. The agency also created the well-known “Think Different” advertising campaign for Apple soon after co-founder Steve Jobs returned to the company in 1997.

However, internal Apple communications entered into evidence in the company’s recent patent-infringement trial against Samsung (SSNLF.PK) revealed that some company executives were beginning to question the effectiveness of Media Arts Lab’s marketing efforts. Apple “may need to start a search for a new agency,” wrote senior vice president of worldwide marketing Phil Schiller in an email to Tim Cook obtained by The Wall Street Journal. “[W]e are not getting what we need from them and haven’t been for a while.”

Schiller also forwarded an article from The Wall Street Journal to Media Arts Lab executive James Vincent that highlighted the success of Samsung’s “The Next Big Thing” advertising campaign. Samsung’s ads portrayed Apple users as older and out-of-touch with the latest smartphone technologies, while Samsung users were portrayed as young and hip. “We have a lot of work to do to turn this around,” wrote Schiller. However, Vincent’s response that Apple’s brand needed to be revamped much like it did in 1997 did little to quell Schiller’s concerns. According to The Wall Street Journal, Schiller was “shocked” by Vincent’s response and took issue with his view that Apple’s brand value had declined.

“This is not 1997,” wrote Schiller to Vincent, according to Bloomberg. “Nothing like it in any way.” Although Vincent later apologized to Schiller in another email, it now appears that the exchange may have been the straw that broke the camel’s back for Media Arts Lab’s relationship with Apple.

“If we need to do this, we should get going,” CEO Tim Cook wrote to Schiller, according to court documents seen by Bloomberg. Besides the creation of an in-house television advertising team, Apple has also been making other moves that suggest it is moving away from its reliance on Media Arts Lab. According to AdAge, Apple has recently partnered with four more digital ad agencies, including WPP’s (NASDAQ:WPPGY) AKQA, Interpublic Group’s (NYSE:IPG) Huge, Area 17, and Kettle. Apple also hired former Wolff Olins Global CEO Karl Heiselman, reports AdAge. However, Apple has not completely cut its ties with Media Arts Lab. According to Bloomberg’s sources, Apple’s internal ad team must still compete with Media Arts Lab for each advertising project.

Recent data from Ace Metrix — a consulting firm that uses consumer surveys to analyze the effectiveness of TV commercials — suggests that Apple’s shift to in-house advertisement creation may already be paying off. According to Ace Metrix data cited by Bloomberg, Apple’s most recent advertising score has risen to 564, up from the 548 score it achieved in 2013.

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