Dive Brief:

• Seventy-eight percent of marketers are working with some type of in-house agency this year, according to results of a new survey by the Association of National Advertisers (ANA) shared with Marketing Dive. That number jumps from 58% who reported the same in 2013 and 42% in 2008 — the last two times the survey was conducted. Among respondents, 44% have set up an in-house shop in the past five years.
• "The Continued Rise of the In-House Agency" survey, which drew from 412 ANA client-side members, additionally found that 90% of marketers working with in-house agencies have increased their shops' workload in the past year. For 65% of respondents, those workloads have increased "a lot." Beyond receiving a greater workload, in-house agencies are also handling more significant marketing duties for their brands pertaining to strategy, creative across digital and traditional channels, and media planning and buying duties, including for programmatic advertising.
• Seventy percent of ANA marketers have, in the last three years, shifted work from third-party agencies to in-house teams, encompassing content marketing, social media and influencer marketing. Heftier responsibilities for internal shops come as 79% of marketers reported high levels of satisfaction with their in-house work, and 37% reported complete satisfaction. Marketers cited cost efficiencies as the top benefit of moving work in-house, along with better knowledge of the brand and institutions, and agility. Pain points for in-house agencies, according to the survey, include their managing of more projects and managing of resources more efficiently.    

Dive Insight:

A sharp uptick in the number of marketers using in-house agencies isn't big news, but the ANA report drills down further into how these internal teams, beyond substantially proliferating, are also taking on more meaningful marketing work — especially the type that has traditionally fallen in the lap of external agencies. In-house agencies tackling a greater volume of projects related to creative, brand strategy and content marketing hits Madison Avenue shops in the areas where they've historically specialized, and that shift is unlikely to cool soon.

Fifty-eight percent of marketers' total workload is now managed internally, according to the ANA survey. ANA CEO and President Bob Liodice in a statement noted how agencies are no longer doing "low-hanging fruit" tasks such as promotional materials and internal videos. He said that the trade body expects accelerated client movement in-house going forward.

These findings come despite some recent blunders largely attributed to in-house creative teams, including a notorious Pepsi ad starring Kendall Jenner from last year. The spot, made by the soft drink maker's Creators League Studio, was quickly pulled from air amid outcry that it appropriated from social justice movements like Black Lives Matter. Criticisms suggested that internal creative teams can lack the outsider's perspective that would've stopped the campaign in its tracks. ANA members in the survey appeared more focused on efficiency and cost when it came to obstacles facing in-house shops, and actually cited better knowledge of the brand as a benefit.

On top of adjusting to in-housing headwinds, agencies are also focusing more on data and technology to stay competitive with digital marketing services offered by consultancies. But the ANA survey found that more of this work is also migrating in-house, with 59% of respondents handling data and marketing analytics internally this year compared to 42% who reported the same in 2013.

It's important to emphasize that traditional agencies are not going anywhere, as 90% of marketers surveyed by the ANA still work with external shops. However, the survey portrays an uphill battle ahead for advertising's old guard. That trend has been reinforced by mostly flat growth among the major agency conglomerates, and also the accelerated consolidation of services inside some of these companies.