The penetration of in-house agencies has increased by 52% in the past decade, according to a study conducted by the In-House Agency Forum and Forrester.
Over 300 companies participated in the study, with industries ranging from financial services to insurance, healthcare to hospitality and manufacturing to retail. Respondents included in-house agency leaders, client-side marketers, external agencies and vendor partners.
The size of in-house agency teams is growing, per the study, which notes 55% of companies with an internal agency added headcount over the past two years, with half employing corporate creative teams of 25 employees or more.
A decade ago, a similar study found that the top two benefits of the in-house model were cost efficiencies and quicker turnarounds. The current study found that brand and business acumen now ranked as the top benefits followed by cost efficiencies and time savings, an indication that strategic effectiveness is a growing priority for in-house shops.
But as with agencies overall, talent recruitment is seen as a key challenge for in-house shops as well as digital know-how. Also, despite overall headcount growth about two-thirds of in-house agencies indicated that they are not adequately staffed to meet growing business demands.
The study indicates that most in-house agencies are addressing those shortfalls at least in part by outsourcing some work.
Jay Pattisall, lead analyst at Forrester Research, stated the report “clearly defines the opportunity for CMOs to invest in in-house talent and resources. The fact that 41% of marketers perceive internal agency teams as lacking in digital know-how is a rallying cry for the in-house imperative.”
The full report, In-House Agencies Today, is available for IHAF members to download.