Nearly Half of US Advertisers Now Use InHouse Ad Agencies

18 September 2008

NEW YORK: Inhouse advertising departments are a ho-hum species at any time for ad agencies - and worse yet amid the current economic sclerosis. So there's scant celebration across Madison Avenue at the Association of National Advertisers' revelation that 42% of its members have established internal advertising units

Clients' rationale for this trend is cost efficiency and savings, which they cite as the "most important success" for going down the inhouse route.

Roles for inhouse agencies varied widely, but often include creative development, repurposing work developed by an external agency, and production.

The ANA survey reveals that such units typically handle the following functions:

  • Collateral like point-of-sale displays or brochures (97%)
  • Internal/company communications (82%)
  • Internal/company videos (69%)
  • Developing brand identity (66%)
  • Direct mail (65%)
  • Site creation and maintenance (65%)
  • Online banners and other "static" online creative (62%)
  • Other services: TV advertising, packaging, search engine optimization and search engine marketing
  • On top of all that, 35% of marketers tasked their in-house agencies with media planning. Another 24% added media buying to the load
  • In 58% of companies, in-house agencies report to a marketing or communications department
  • 17% of in-house agencies have profit and loss responsibilities
  • 98% of US facilities remain stateside, with a few companies maintaining offshore facilities.
Marketers' main critique of in-house agencies is that most lack "a depth of strategic thinking" (61%), said the ANA. And about half of marketers said it was hard to come up with fresh ideas with internal teams.

Says ANA president/ceo Bob Liodice: "Through the survey, we can now provide marketers with timely, fresh thinking and the insights they need to make strategic decisions and to create an optimal in-house agency, if desired."

Data sourced from Association of National Advertisers (USA); additional content by WARC staff