In-house agencies are increasingly popular as marketers seek greater control, speed, efficiency and flexibility. The trend for in-house agencies has been driven by digital strategies which demand real-time reactions, as well as faster content production and distribution. While in-house agencies can be highly responsive and have greater brand knowledge, external agency relationships still have strategic importance. Traditional agencies need to evolve to meet the time and data demands of modern marketers. But the value of their expertise should not be underestimated.
In-house agencies are internal resources established by advertisers to manage and deliver advertising content and campaigns, work which has traditionally been outsourced to external advertising agencies.
1. Brand knowledge and cost efficiencies are main benefits of in-house agencies
According to research from the Association of National Advertisers, 83% of US client-side marketers with in-house agencies listed better brand knowledge and cost efficiencies as key benefits. The next most widespread benefits were the presence of dedicated staff and institutional knowledge, indicating marketers value the contextual and personalised knowledge that in-house agencies can offer. The benefits that were least reported were lower talent turnover (24%) and reduced conflict of interest (21%). These benefits can partly explain the growth of in-house agencies over the past ten years, increasing by 36 percentage points since 2008. However, external agencies continue to play a pivotal role, particularly when smaller in-house teams are unable to replicate their expertise. In-house marketing technology is generating particular interest in North America, with 15% of budgets allocated to in-house martech this year.