“In-house agencies have, to some extent, disintermediated external advertising agencies,” Duggan said. He speculates a various factors behind this: Increased pressure to turn around social media content faster and the relative cost savings of developing some content, like sales enablement materials, internally.
And while the research does not include specific data on marketers’ average cost savings, respondents indicated cost savings is the top KPI they use to evaluate their in-house agency’s effectiveness. It implies that, given all the expansion, marketers must be seeing some financial benefit.
“The top reason you go to an external agency, thank goodness, should not be cost. But that’s the top reason for [deciding to] in-house. It’s safe to say there’s absolutely an economic benefit,” Duggan said.
In-house media capabilities still lag behind creative
Last May, the prospect of cost savings prompted Whirlpool to shift a majority of its creative marketing investment away from its longtime agency partner Digitas. The brand reallocated the funds to launch a new in-house agency called WoW Studios.
The studio’s capabilities are broad. They include North America’s CX operations; strategy, creative and experience design; integrated and studio production; and marketing sciences and digital delivery.
The top reason you go to an external agency, thank goodness, should not be cost. But that’s the top reason for [deciding to] in-house. It’s safe to say there’s absolutely an economic benefit.
—Bill Duggan, executive vice president, ANA
The in-house agency’s purview does not include media, which Publicis Media’s Spark Foundry continues to manage. Whirlpool is not alone, since it’s still uncommon for in-house agencies to manage media. Compared to the 92% of in-house agencies handling creative for traditional media and the 95% handling creative for digital media, just 54% of respondents handle media planning or buying services in-house.
It means that marketers still overwhelmingly rely on external agencies for media services, even as in-house agencies take on more marketing tasks.
Media’s slow in-house expansion surprised Duggan, who expected survey results would reveal more pervasive in-house media practices, especially because 34% of survey respondents indicated that owning, controlling and protecting their first-party data is one of in-housing’s benefits. The leader expects more in-house media expansion is still to come.
