NEW YORK: Brand owners are increasingly turning to in-house agencies and away from external partners for creative strategies and other capabilities, a new survey has said.

The Association of National Advertisers carried out an in-house agency survey for the first time in five years, and gained responses from 203 client-side marketers. The results indicated that the penetration of in-house agencies now stands at 58%, compared to 42% in 2008.

Bob Liodice, president-CEO of the ANA, expressed surprise at the change. "It took such an incredible leap. Sixteen is lot of percentage points," he told Advertising Age.

In addition, just 32% of respondents said their companies did not have an in-house agency, compared to 50% five years ago, while 4% did not have one but were planning to add that capability.

The survey also found that more than half were moving business in-house that had previously been handled by an external agency, with 40% specifically citing creative strategy.

Liodice said marketers were questioning the value of working with outside partners. "What marketers are now finding is they can reach out directly to Facebook, Google or NBC, and get insights," he said. "And we're seeing sometimes they are going directly to them for ideas and innovation and creativity."

Worryingly for Madison Avenue, not only is more business staying in-house but the size of those internal agencies is growing, as are their capabilities.

The ANA survey showed that 57% of such agencies had between 11 and 100 employees, compared to 46% five years ago. Further, 43% said their in-house agencies had a global reach.

And Bill Duggan, ANA group exec VP, noted that the range of work being undertaken had increased, with more strategy work and media planning and buying, as well as digital, social and mobile.

The main reasons for this move are, the ANA suggested, the cutting of advertising budgets and CMOs having to operate across more channels. Procurement departments are another factor. And Duggan remarked on the need for quicker turnaround – in-house agencies were "closer to their internal brand groups and internal decision groups and have those conversations in the hallway rather than setting it up via phone and email".

Liodice did not expect external agencies to be completely discarded but described the trend as a warning. "Are marketers getting more comfortable with having conversations directly with the media companies or even doing media-planning and buying themselves? I think the answer is yes," he concluded.

Data sourced from Advertising Age; additional content by Warc staff