In-House Agencies No Longer A Trend—They’re Here To Stay: ANA Report

New Study Shows 82 Percent of Marketers Now Have In-House Shops, Compared to 78 Percent in 2018

NEW YORK (May 2, 2023) — In-house ad agencies are no longer just a trend—they’re here to stay with 82 percent of ANA members reporting that they now have an in-house agency compared to 78 percent in 2018, according to a new ANA study.

The study, “The Continued Rise of the In-House Agency: 2023 Edition,” is conducted every five years. In 2013, the study revealed 58 percent of respondents indicated they had in-house advertising capabilities, while in 2008 the figure was 42 percent.

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 percent 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 percent of respondents indicating their in-house shops’ workload increased in the past year, including 67 percent who said the workload had increased “a lot.” In the 2018 survey, 90 percent of respondents reported increased workload.

Respondents also said the single primary benefit of an in-house agency was cost efficiencies, which was the top-ranked benefit by a wide margin. Additional benefits included better knowledge of brands, institutional knowledge, and dedicated staff. Those benefits were consistent and in the same order as in 2018.

A vast majority (92 percent) of respondents said they also work with an external agency(ies). For those respondents, an average of 61 percent of all the work for their company is done in-house. In 2018, 90 percent worked with an external agency(ies) and an average of 58 percent of all the work was done in-house. They said 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.

ADDITIONAL FINDINGS

Over the past three years, 65 percent of respondents have moved some established business that used to be handled by their external agency(ies) 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 top KPI used to assess the effectiveness of in-house agencies is cost savings, but it decreased in importance from 2018 to 2023 (69 to 62 percent). The KPI of business performance increased significantly in importance from 2018 to 2023 (45 to 59 percent).

The biggest challenges for in-house agencies are related to managing growth. Specifically, the top challenges are managing workflow (increased projects), scaling efficiently/managing resources, and project prioritization. Those were also the biggest challenges in 2018.

CONCLUSIONS

Data — specifically the desire to own, control, and protect first-party data — is a driver of bringing work in-house. Third-party cookie deprecation increases the importance of marketers having a data strategy to collect first-party data directly from their customers.

Media is the final frontier for in-house agencies. The report 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.”

External agencies still have important roles but have been disintermediated to some degree. Sixty-five percent of respondents have moved some established business that used to be handled by their external agency to their in-house agency.

Talent is key. 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 Continued Rise of the In-House Agency: 2023 Edition,” builds on the work of the ANA’s CMO Growth Council, which was established by the ANA and Cannes Lions to focus on driving enterprise growth. Marketing organization and agency management are key areas of focus for the ANA Growth Agenda, under the Talent and Marketing Organization growth priority.

The full report can be accessed here.

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ABOUT THE ANA
The ANA’s (Association of National Advertisers) mission is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.

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