The In-House Agency Council (IHAC) has partnered with Kantar to publish its ‘2023 In-House Agency Landscape Report’, APAC’s only research report focussed on the state of the in-house agency model.
The new research follows on from the IHAC’s first study released in August 2021 and aims to provide a current take on the country’s in-housing landscape and the future of the marketing model, along with the impact of generative AI on the overall creative ecosystem. To provide a holistic view, Kantar surveyed client-side marketers, in-house agency personnel, and marketers who also employ external agencies.
“Immediately, we found growth of the in-housing model has accelerated in Australia with 78 per cent of marketers now working with an in-house agency. On top of that, 17 per cent of IHA’s have launched in the past two years, demonstrating that the shift is gaining momentum with adoption of the model growing at nearly double the rate seen in 2021,” said IHAC executive chairman Chris Maxwell (lead image).
The report reveals Australia is just behind the US in terms of IHA penetration and leads its European counterparts. Furthermore, the average Australian IHA has between five to 25 people and covers seven different capabilities, most commonly creative, social media, content marketing, strategy, and video production. Plus 74 per cent of IHA’s are predicting increased workload over the coming year, with 93 per cent of marketers surveyed believing their IHA has had a positive impact on their ability to adapt to recent economic pressures.
“With broader remits and continued economic pressures, IHA’s foresee their workloads increasing while reducing the amount of work they procure through external agencies. However, for marketers with an IHA, the list of benefits is long, and goes well beyond just cost efficiency and into better knowledge of brand, speed and agility, along with having dedicated staff,” said Maxwell.
Data also shows a tendency towards mid-sized, nimble and hybrid as the style of choice and that 78 per cent of those polled have a hybrid model (both in-house and external agency talent).
Compared to 2021 data, challenges like managing workflows, recruiting top talent, delivering great creative and expanding capabilities are on the decline, and further evidence from industry recruiters suggests there is now more top-tier talent looking for roles in-house than ever before.
“Interestingly when we ask marketers who do not have an IHA what they think the challenges may be, the number one perceived challenge is set-up costs. Whereas for those with an IHA, setup costs don’t even make the top 10. This suggests that the costs of setting up are immaterial once you’re up and running and experiencing the benefits”.
Research on the utilisation of generative AI among in-house creatives and marketers has unveiled that four out of five marketers are currently exploring the incorporation of AI into their marketing creation processes. Australian marketers believe that AI can simplify content creation, with 51 per cent expressing this sentiment. Yet, only a quarter think it will directly lead to more cost-effective campaigns.
Kantar is proud to partner with IHAC for the second edition of the In-House Agency Landscape Report.
“It’s an important piece of work to be involved in given the evolving landscape of how organisations and marketers activate their go-to-market strategy and offer. Critically, it acknowledges the important interplay and role that internal and external agencies play and how best to leverage the strengths of each – be that around the work produced, the way media is planned and bought, and the tools used to inform business outcomes,” said Kantar Australia manager director Jacqui Brandt.
“The spotlight on AI is particularly fascinating and we’ve learned that 80 per cent of marketers are considering or already using AI for content creation. While cost effectiveness is yet to be understood, AI is here to stay and embracing AI and seeing it as complementary to the agency toolkit is essential”.
