2018 Ad Industry Story of the Year: Bringing Agencies In-House

December 18, 2018

By Bill Duggan

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The 2018 ad industry story of the year, in my opinion, has been the explosion of in-house agencies.

Back in January, I penned my first blog of the year, which was titled, "Expect In-House Agency Trend to Continue." And it sure has. According to ANA research released this year titled "The Continued Rise of the In-House Agency," penetration of in-house agencies is now at 78 percent among ANA members — up from 42 percent in 2008 and 58 percent in 2013. Every week there seems to be more news in the trade press about going in-house. Companies who have taken work in-house this year include (but are by no means limited to) Bayer, GlaxoSmithKline, JPMorgan Chase, Netflix, P&G, and Revlon.

Critics of going in-house point to the "reversals" this year of Vodafone and Intel. For Intel, their business model simply changed – away from a B2C focus and toward B2B. The in-house agency was built around B2C capabilities. Further, in the past year Intel lost both their CEO and CMO. Prior leadership were undoubtedly strong supporters of the Intel in-house agency. The lesson here: just as external agencies will come and go, so will in-house agencies.

According to this year's ANA research, among those marketers with an in-house agency, 90 percent also work with an external agency. Frankly, I am surprised that number isn't even higher. For most, this is an "and" rather than an "or" relationship. As a result, agencies need to accept the reality of going in-house and not fight or disparage it. One progressive agency wrote to me after our report was released, saying, "we're excited about the ANA report on going in-house because we see this as the direction the market is moving. We believe we can help companies make this transition and are eager to build out our product offering for companies that are planning to bring services in-house or have already done so." Kudos to them!

The ANA has also built out our product offerings around in house. Our In-House Agency Committee has chapters based in New York and the West Coast, and will expand to Chicago in 2019. Each of these chapters meet quarterly to share case studies, challenges, and best practices. Of the more than 20 committees at ANA, the In-House Committee regularly draws the biggest turnout. Further, our first-ever In-House Agency Conference will be March 13–15, 2019 in Orlando. Amazingly, that conference has now sold out, three months in advance.

This is my last blog of the year and it's fitting that I end with the same topic I started with in January. I am not alone in my belief that going in-house is the ad industry story of the year. Avi Dan, a well-respected industry pundit, wrote in one of his recent columns for Forbes that "the trend toward in-house agencies was the most significant event in advertising this year," and named 'the in-house agency' as his Agency of the Year. Congratulations to the 78 percent of ANA member companies with an in-house agency, as this recognition is the result of what you do!

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