Dive Brief:

• In a survey of marketers, 63% report challenges around keeping in-house agency talent energized, according to a new report from the Association of National Advertisers (ANA) done with the Boston Consulting Group and Reed Smith, the ANA's outside legal counsel. The findings are based on a March survey of 111 ANA members and interviews with members and industry experts during Q1 2019.
• The report, "Managing In-House Agency Creative," also indicates that 44% of in-house agencies struggle with attracting top-tier talent, and another 37% say they're challenged applying key marketing processes. Another 19% revealed issues with creative tension.
• Some in-house agencies reported that they build virtual teams to help attract talent in less competitive markets, as well as employ creative talent over multiple brand categories to avoid concerns about only working on one brand. The report also pointed to some successful tactics for attracting talent, including playing up the total compensation package during recruitment and pushing benefits such as maternity/paternity leave and the ability to work remotely.

Dive Insight:

The ANA has chronicled the rapid growth around in-house agencies over the past few years in previous reports and is now turning its sights on some of the challenges these brand-side shops face in an effort to benchmark some best practices for a burgeoning area of the marketing industry.

There's little doubt that in-house agencies are on the upswing, a trend that's been driven by several factors including transparency issues with third-party agencies and a desire to cut costs. Last year, an ANA report revealed that 78% of marketers have some type of in-house agency, an increase from 58% in 2013 and 42% in 2008. That report also noted 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."

Anheuser-Busch, PepsiCo, P&G and Verizon are among the brands that have taken a stab at building out their own agencies as a way to scale back partnerships with Madison Avenue and to directly manage a portion of their marketing efforts. AB InBev has quietly been building Draftline, its in-house agency that uses "data-driven insights to produce creative that is more local and personalized — with greater agility," per press materials the company shared with Marketing Dive in May. PepsiCo is reportedly building a team that will focus on combining data with media planning.

The latest ANA report pinpoints some of the biggest pain points in operating an in-house team, which might sound like a good idea to marketers, but, as the report highlights, is not easy. In fact, brands are beginning to face some of the same challenges that traditional agencies face, such as attracting and keeping creative talent.

Despite the growth in working in-house, traditional agencies remain viable, as 90% of marketers surveyed by the ANA last fall revealed that they still work with external shops.