Study: Digital’s Need For Speed Sees In-House Agencies Explode

A shift to digital advertising and the need for speed and efficiencies has seen the number of brands that have brought their agency needs in-house explode over the last decade a new report has found.

The study, albeit a US one, was conducted by global research firm Forrester and the In-house Agency Forum and found that advertisers with in-house agency capabilities had increase from 42 per cent to 64 per cent over the past 10 years.

The results, published on the Wall Street Journal, were based on findings from 325 US companies, 64 per cent who had internal capabilities, 30 per cent who didn’t, and six per cent who didn’t know.

According to the study, in 2008 the chief reason for bringing work in-house was due to cost savings and speed. Fast forward to 2018 and the chief reason remains pretty much the same while the shift to digital has meant in-house provides far shorter turnarounds.

Respondents to the study (some 25 per cent) also said that bringing the work in-house meant the knowledge of the brand stayed internal.

Interestingly, less cited things such as confidentiality as a reason to abandon external agencies.

However, the news wasn’t all doom and gloom for agencies. A majority of respondents said that they still used the services of traditional external agencies.

Respondents also acknowledged that external agencies tended to be more expensive, but that was typically to do with the higher overheads than anything else.

Commenting on the findings, In-house Agency Forum’s Marta Stiglin said: “You need measurement and analytics and insights to drive new programs and strategies,” she said.

“Knowledge of the brand and integrating at all points of contact, particularly with what’s going on with digital, is of paramount importance,” Stiglin added.

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Latest comments

James Carter says:
06/02/2019 at 5:43 pm
I have run cartercartercom.au since 2009 we went in-house with our largest client for a couple of years and it just didn’t work as well. I think the agency model just works better for all parties.
Marta Stiglin says:
30/08/2018 at 1:49 am
Historically, in-house agencies have been lauded for the cost and time savings they deliver to their parent companies. In 2008, the top two benefits of the in-house model were cost efficiencies and quicker turnarounds. In IHAF’s 2018 report, cost and time are ranked third and fourth respectively, behind brand and business acumen, indicating that in-house agencies are not only expected to deliver demonstrable value and efficiency to their parent companies, they are expected to operate with a high degree of strategic firepower. The challenge comes in keeping overhead low while advancing the talent required of today’s in-house teams. ~Marta Stiglin, Stiglin Consulting
Emily Foster says:
29/08/2018 at 5:29 am
This article is based on IHAF’s 2018 State-of-the-Industry Report, In-House Agencies Today, which details the functional competencies, service offerings, project composition and operating practices of today’s internal agencies—with additional perspective from external agencies and client-side marketers. For more, go to: https://www.ihaforum.org/in-house-agencies-today.

Forrester in-house agencies In-house Agency Forum