Dive Brief:

• Among marketers, 82% now use an in-house agency, according to new research from the Association of National Advertisers (ANA) shared with Marketing Dive. That is an increase of 4 percentage points from 2018 and a significant increase from 58% in 2013.
• Additionally, 88% of companies reported having increased the workload for their in-house shop and 67% said the workload had increased “a lot.”
• Respondents cited cost efficiency as the primary benefit of an in-house agency, though other benefits include better knowledge of brands, better institutional knowledge and having a dedicated staff.

Dive Insight:

The increased use of in-house agencies reported by the ANA is a reflection of the new realities of marketing, which has become reliant on actionable data and executional speed. In-house agencies can access a company’s first-party data more quickly and more securely than external agencies, for instance. The survey, which is conducted every five years, had 162 respondents for its latest iteration. 

Several ongoing shifts in marketing are evident in the study’s findings, including how the remit of agencies is changing. Nearly two-thirds of the survey participants said they had moved some business that had previously been handled by external agencies to their internal departments. The most moved pieces of business were creative services for digital and traditional media.

As the in-housing trend continues to grow, ANA’s findings suggest that the ways marketers evaluate their in-house staff is evolving. Though cost efficiency remains the top KPI, it has decreased in importance from 69% in 2018 to 62% in 2023. The KPI of business performance jumped significantly in importance from 45% to 59% during the same period.

While some respondents reported moving media services for social, search and strategy in-house, media itself still represents “the final frontier for in-house agencies,” according to the ANA. More than half (54%) of in-house agencies handle some media planning or buying. Those who haven’t brought this functionality in-house cited complexity as a significant reason for their reluctance. 

The news is not all bad for external agencies, however. A vast majority (92%) of the survey respondents reported working with an external agency, which is actually an increase from 2018 when 90% reported working with external agencies. The reasons cited for working with external agencies included the need for extra bandwidth and capacity when the internal agency is too busy as well as handling areas for which the in-house shop lacks capabilities. 

Moving forward, the biggest challenge for internal agencies will be the same as that of external agencies: attracting and keeping talent, particularly as in-house agencies manage increased workflow while maximizing their efficiencies and resources, according to the report.

“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, in a release. “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.”