4 September 2020
Over half of brands surveyed by the WFA now have in-house agencies /
WFA brand survey shows the number of in-house agencies has risen sharply over the past five years
The number of in-house agencies has risen sharply over the past five years, according to a study in which 57% of brands surveyed had their own advertising shops.
The Global Trends In Creative In-Housing research was carried out by the World Federation of Advertisers and Observatory International, which canvassed 53 large brands with a combined annual ad spend of $83bn.
According to the survey, 74% of the in-house agencies had been established within the past five years, primarily to accommodate demands for more digital advertising content.
Among the brands with in-house agencies, 94% said they used them to produce digital content, compared with the 50% that used in-house teams to handle media planning or buying.
Only 4% of the in-house agencies were established in the past year, indicating the trend may have slowed, but that may not be the case if the 17% of survey respondents who said they are ‘considering’ establishing an internal ad shop follow through on their plans.
And for 82% of the brands with already established in-house agencies, creative workloads had risen (either ‘considerably’ or ‘somewhat’) over the past year
But even taking into account that rise in workloads, brands still only handled 37% of creative work in house, and 95% of them said they still used external agencies. And 38% of agencies said they let internal and external agencies pitch against each other for briefs.
Asked about the main benefits of an in-house agency, brands most often cited cost efficiencies (91%), followed by better integration (64%). while creative expertise was way down the list at 9%.
In terms of cost cutting, 69% of respondents said they’d saved more than 6% by setting up an in-house agency, while 48% claimed savings of over 20%.
The (small) sample survey also suggests brands that create an in-house agency rarely regret it, with only 4% saying they had shut down previously established internal agencies. But that’s not to say that bringing advertising in house doesn’t come with challenges: managing workflow was the chief concern, cited by 62% of respondents.
On whether the pandemic will hasten or slow clients appetite for moving advertising projects in house, the WFA and Observatory International hedged their bets, writing: ‘While Covid-19 is forcing many businesses to review their operations, some of those with existing in-house teams are reporting an increase in demand for their services, and expect their in-house agencies to grow in the coming years as a result. At the same time, some commentators predict that COVID-19 will make in-housing a less attractive model due to declines in business and the many fixed costs involved.’
Related articles /
1 September 2020
Castrol turns garages into brand ambassadors with app ads competition /
4 August 2020
LifeStyles creates STI Index to sell discount condoms to DIY investors /
Contagious thinking delivered to your inbox /
Subscribe to the Contagious weekly newsletter and stay up to date with creative news, marketing trends and cutting-edge research.