How to Make In-Housing Work for Your Company

We are past the point that in-housing can be considered a trend. Today, in-house agencies are the norm, with most brands having brought core advertising functions within their walls as they look to increase agility, improve cost efficiency and gain greater control over their data. In a recent report by the Incorporated Society of British Advertisers (ISBA), 79% of brand respondents stated they are already in-housing to some extent, with a further 10% planning to do so soon. The story is the same in the U.S., where 82% of ANA members reported having an in-house agency in 2023, up from 78% in 2018 and 58% in 2013. But dig beneath the surface and a more complex picture emerges. There are still ample cost savings and efficiencies to be found at in-house agencies, but they require a flexible approach and a helping hand from the latest centralization, consolidation and automation technologies. All-in on in-house An internal agency under direct control of the brand should, in theory, be easier to communicate with and quicker to iterate on feedback, react to customer behavior and respond to trends. Brands might also be able to better control costs on projects run by salaried staff without any of the issues around transparency that are often a point of tension between brands and agencies. An advertising team embedded within a brand can also gain intimate knowledge of the product or service it sells and the customers it caters to, while its integration with the wider business provides opportunities for creative ideas to cross-pollinate between departments. Then there is the matter of data. The fast-approaching deprecation of third-party cookies has made brands keenly aware of the value of collecting and activating first-party customer data, while privacy regulations such as the General Data Protection Regulation (GDPR) have imposed severe penalties for their mishandling. Harsh realities Despite these benefits, there are some real gaps between expectations and reality for brands’ in-housing efforts. More than 90% of brands in the ISBA report predicted in-housing would improve advertising costs, speed and control, yet actual satisfaction rates range from 60% for costs all the way down to just 40% for speed. This leaves plenty of room for agencies to continue to sell their services, with 42% of ISBA respondents believing they will remain crucial. The role of agencies is changing rather than diminishing, moving from the once-typical agency of record model toward more ad hoc, project-based relationships with brands. Moreover, even if brands wanted to take full control of advertising, there simply isn’t enough people power for an entirely in-house model to become standard. Around half of respondents in a worldwide survey by the World Federation of Advertisers (WFA) felt that the advertising industry “is in the midst of its worst-ever talent crisis,” with 74% of advertisers and 85% of agencies experiencing a talent shortage in media roles. Joining the dots To address these complexities, brands must embrace a holistic approach to data and assets to simplify their advertising processes. First, brands need interoperability between all advertising technologies, processes and participants. By centralizing their systems for managing and sharing advertising resources across internal and external teams, brands gain a unified view that promotes transparency and accountability between internal teams and external agencies. Maintaining consistent branding across various campaigns and channels is another challenge. Having all parties on the same page with access to a unified and centralized library ensures that everyone involved is working from a consistent and growing pool of assets and insights. This also prevents siloed and fragmented data, even if key staff members move on or agency partners change. Finally, brands should explore how AI automation can help to monitor and fine-tune workflows and processes to reduce costs and maximize results, so advertising professionals can be singularly focused on connecting with consumers. To make the most of hybrid operating models, brands must invest in technology that reins in its complexities while retaining improvements in governance, transparency and efficiency. Much like the hybrid model of work increased operational complexity in the short term but returned rich rewards, so too can hybrid operating models unlock exciting new possibilities for the brands and agencies willing to embrace change.