Six Conclusions About In-House Agencies

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Every five years since 2008, the ANA has surveyed our members on the topic of in-house agencies. Our newest report -- The Continued Rise of the In-House Agency: 2023 Edition -- is out. Here are six key conclusions from the report.

  1. In-house agencies should no longer be considered a "trend." They have become firmly entrenched as part of the holistic marketing ecosystem and are now a "mainstay." Eighty-two percent of ANA members have an in-house agency in 2023 (up from 78 percent in 2018, 58% in 2013, and 42% in 2008). There is amazing consistency between the 2023 and 2018 survey results, including in services offered, benefits, challenges and the relationship between in-house and external agencies -- further confirmation that in-house agencies have become firmly entrenched.
  1. In-house agencies are increasingly being held to some of the same standards as external agencies. When asked, "What KPIs do you use to assess the effectiveness of your in-house agency?" the importance of business performance rose dramatically (from 45 percent in 2018 to 59 percent in 2023) and is now ranked second and only slightly behind cost savings (62 percent in 2023, down from 69 percent). In house agencies are being evaluated -- just like external agencies. 70 percent of respondents conduct evaluations of their in-house agency to assess performance and identify potential issues; this includes 55 percent who do so annually.
  1. Data -- specifically the desire to own, control, and protect first-party data -- is a driver of bringing work in-house. Full ownership of marketing data/analysis was noted by 34 percent of respondents as a benefit of having an in-house agency. In our qualitative discussions, the importance of data ownership was brought up in multiple interviews and was of particular interest to members in regulated industries (e.g., financial, health care, pharma), given the critical importance of managing and protecting customer data. Advertisers need to have a data management strategy that provides control, oversight, and ownership of their data. Taking ownership of the data would also ensure that advertisers are not paying for data that should already belong to them. Third-party cookie deprecation increases the importance of marketers having a data strategy to collect first-party data directly from their customer.
  1. Media is the final frontier for in-house agencies. The point of entry for in-house agencies is often creative services for traditional media (e.g., collateral/promotional materials, internal company communications) followed by creative services for digital media (e.g., email, social media, website development/design). Media usually comes later, if at all. Fifty-four percent of in-house agencies handle some media planning/buying services. Meanwhile, over 90 percent of respondents handle some creative in-house. Only about one-third have some in-house programmatic capabilities (consistent with 2018). Those who have considered bringing media in-house but have not yet done so told us in qualitative discussions that is because media is "too complex."
  1. External agencies still have important roles but have been disintermediated to some degree. Ninety-two percent of respondents also work with one or more external agencies. Work goes to external agencies primarily for bandwidth/capacity reasons (i.e., the in-house agency is too busy) or for capabilities that an external agency has that do not exist internally. In addition, external agencies are the place marketers often turn to for "big ideas" and larger tentpole campaigns. Over the past three years 65 percent of respondents have moved some established business that used to be handled by their external agency to their in-house agency. To limit the shift of work to in-house agencies, marketers cite cost, knowledge of the business, and speed/nimbleness as areas for improvement for agencies.
  1. It’s all about talent. Historically, in-house agencies have been about being "cheaper" and "faster" but not necessarily "better" than external agencies. That perception of not being better has been driven by the quality of in-house talent. Today, the work done by in-house agencies is no longer confined to "low-hanging fruit" such as collateral/promotional materials and internal videos. In-house agencies are doing much more. Just like external agencies, the quality of talent will drive the success of in-house agencies. The biggest challenges for in-house agencies have talent implications. Those challenges are managing workflow (increased projects) and scaling efficiently/managing resources. The pandemic had a positive impact on the staffing of in-house agencies. Work and talent have gone remote, either partially or completely, providing greater access to talent without geographic boundaries. Competition for that talent has also increased.

Access the full report here and learn even more at the ANA 2023 In-House Agency Conference, June 12-14 in Orlando.

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