More advertisers are running in-house "agency" units in 2013 than did five years ago, according to a new survey from the Association of National Advertisers. The change is driven in part by the weak global economy, but also could be chalked up to digital acceleration – including data/analytics and social imperatives.
The survey of 203 client-side marketers was conducted in spring 2013. Within that sample, 118 said they have an in-house agency, representing 58% penetration. That's up 16 percentage points from 2008, the last time the trade group conducted a similar survey.
Of those 188, a striking 42% said they handle "data/marketing and analytics" through an in-house unit, as opposed to working with an external agency partner.
This year is the first time the ANA posed a question about data, so no growth comparison is possible. The study also didn't inquire about the reasons for bringing data and analytics in-house – for instance whether speed, agility or first-party data security is a larger motivator. Therefore it's unclear what threat client-side "insourcing" of data poses to agencies that have built out their own analytics practices.
In 2008, "in-house data management just wasn't on our radar screen or probably anybody else's," said ANA Group EVP Bill Duggan. "My guess is that five years ago that number was very small. Forty-two percent feels like a pretty solid number and I only think that's growing."
Even without context, the finding may give datacentric agencies pause, suggesting as it does that upwards of a third of ANA members see good reasons to squirrel their first-party data away. And for agency executives who are smart about data, the prevalence of in-house data management could mean future job opportunities on the client side.
For the purposes of the survey, an in-house agency is defined as “a department, group or person that has responsibilities typically performed by an external advertising or other marcomm agency.”
Some additional findings:
- Half of all in-house agencies handle some level of media planning and/or buying.
- Display, search, social and other "newer media" rank high on the list of capabilities run by in-house resources.
- Thirty-four percent of respondents listed "content marketing" as an area they run in-house.
- For those with in-house agencies, 56% said these units absorbed marketing functions that used to be handled by an external agency partner.
- Under the media-planning/-buying category, the top functions handled in-house are magazine ads (32%), display ads (28%) and social media (28%). Mobile and search also both ranked in the top seven.
Among the in-house agencies mentioned in the report are creative services groups run by Blue Shield of California and Marriott. Marriott Creative Agency employs more than 20 full-time social media experts, writers and designers, according to the ANA.
And sometimes the current is reversed, such as when in-house agencies are spun off into standalone business. This was the case with Seoul-based Cheil Worldwide, begun as the in-house agency at Samsung and later divested to pitch other business, though its No. 1 client still retains minority ownership.