The latest Association of National Advertisers (ANA) report on in-house agencies finds that 82% percent of members report having one, up from 78% in 2018.
The study, “The Continued Rise of the In-House Agency: 2023 Edition,” is conducted every five years. In 2013, the study revealed 58% of respondents indicated they had in-house advertising capabilities, while in 2008 the figure was 42%.
An “in-house agency” was defined in the report as “a department, group, or person that has responsibilities that typically are performed by an external advertising or other MarCom agency” and did not include internal public relations resources. The survey was fielded in February and March of 2023, with 162 respondents participating.
“This report definitively shows that in-house agencies have become a firmly entrenched part of the holistic marketing ecosystem and are now a mainstay among a majority of marketers,” said ANA CEO Bob Liodice. “Agencies still play an important role for marketers, witnessed by the fact that 92% of respondents still use them. But the growth of in-house capabilities has clearly changed the client/agency relationship over the past 15 years.”
The study showed that workloads for in-house agencies continue to increase with 88%of respondents indicating their in-house shops’ workload increased in the past year, including 67% who said the workload had increased “a lot.” In the 2018 survey, 90% of respondents reported increased workload.
Respondents also said the single primary benefit of an in-house agency was cost efficiency.
Additional benefits include better knowledge of brands, institutional knowledge, and dedicated staff. Those benefits were consistent and in the same order as in 2018.
Over the past three years, 65 percent of respondents have moved some established business that used to be handled by an external agency to their in-house agency. The types of services most moved were identified as:
Creative services for digital media: social media, search, and email.
Creative services for traditional media: print collateral, direct mail, internal communications, out-of-home, and radio.
Media services: social media and search, media strategy.
The report concluded that Data — specifically the desire to own, control, and protect first-party data — is a driver of bringing work in-house.
The report also revealed that 54% percent of in-house agencies handle some media planning/buying service. Those who have considered bringing media in-house but have not yet done so said in qualitative discussions that is because media is “too complex.”
Of course many advertisers prefer to have some of their promotional functions done in-house or in conjunction with specialisspoutside suppliers.
What needs to be clarified is what functions are done in-house and to what extent. When you boil it down---and there will always be a few exceptions---most in-house "advertising" activities are for sales promotion purposes which may include some "media planning" as well as buying---epsecially for search, direct mail, direct to consumer marketing, etc. However, when it comes to developing the basic positioning platform for most brands that are national media spenders, creating their commercials and buying TV time, it's usually not in-house at all---it's like it has always been---full service agencies or a combination of "creative" and "media" agencies handle the duties as these are far too complex for an advertiser to deal with.
Also, by having "the agencies" do it they can be blamed when things go wrong --not the CMOs and brand managers.