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In-house agencies are not a nascent trend anymore, according to a new study from the Association of National Advertisers (ANA), in which 82% of ANA member respondents said their company has an in-house agency.
The ANA conducts the study, called, “The Continued Rise of the In-House Agency: 2023 Edition,” every five years. Its results show there’s been a significant increase in in-housing during the last decade, with 58% of survey respondents in 2013—a 20-point rise from 2018—indicating they had in-house advertising capabilities.
In-housing became increasingly more common over a long time period. In 2008, when the ANA conducted this research for the first time, only 42% of respondents said they had an in-house agency.
“One of the very simple top-level findings is that in-housing is not a trend,” Bill Duggan, the ANA’s group executive vice president, told Adweek. The survey results indicate to Duggan that in-housing is now so pervasive, at least among ANA members, that it’s become inaccurate to frame in-housing as an exception.
Other research mostly supports the ANA’s findings. In 2021, a study fielded by the In-house Agencies Forum (IHAF) and Forrester Research similarly found that 77% of survey respondents had an in-house agency. That research also indicated that the Covid-19 pandemic did not slow in-housing, despite the pandemic slowing ad spend. It also implied that the pandemic contributed to burgeoning in-house teams, as many agencies laid off swaths of employees and those employees accepted in-house work.
With in-house agencies’ scale and larger headcount, marketers must turn their attention to ironing out operational kinks that prevent many in-house agencies from expanding service offerings. Brands will continue to debate some questions. Namely, will in-housing truly generate cost savings at a time when employers are constrained and industry-wide layoffs abound? The research is also an indication that external agencies must either support now common in-house practices, or accept that one of their competitors will.
Is in-housing contributing to fewer AOR relationships?
Regardless of how many marketers boast in-house agencies, the ANA report indicated 92% of them still use external agencies. This means that projects are becoming more dispersed than they used to be, (unless in the cases where the marketing budget is growing). Marketers’ more dispersed budgets inevitably lead to more project-based assignments and fewer AOR partnerships.