In-housing grew during pandemic: IHAF report

The pandemic accelerated marketers’ adoption of in-house agencies and employees according to a new report from the In-House Agency Forum, a Boston-based association that provides tools and insights catering to internal agencies.

Fielded in partnership with Forrester Research, Productivity and the Pandemic is the latest in a series of internal benchmarking reports from the IHAF. It is based on interviews with 265 companies including Caterpillar, Experian, HP Inc., Nestlé and PwC (the IHAF said it did not ask for geography data from respondents, but that many “represent global companies.”)

The penetration of in-house agencies increased to 77% during the pandemic, a 7% increase from 2019. The number of employees also increased, with 47% of in-house agencies indicating that they added staff, and 38% saying they maintained the same headcount as before.

Fully 80% of respondents said they have brought more marketing assignments in-house since the onset of the pandemic, with 50% saying the increase was directly triggered by the events of the past two years. Three-quarters of respondents reported that their in-house agencies had expanded their capabilities, most significantly around traditional and programmatic media—which grew 48% and 100% respectively since 2019.

Jay Pattisall, principal analyst at Forrester, said that the surge of in-house media demonstrates executives’ opportunity to use media strategy, execution, adtech and data capabilities to achieve more transparency and control of media budgets. “Ultimately, marketers want a better understanding of how media budgets are spent,” he said. “In-house media expertise provides that visibility.”

The IHAF findings align with research presented by the World Federation of Advertisers last year, which predicted that the pandemic would accelerate the in-housing trend. That report said the trend was being driven by a need for quicker access to digital content in greater volumes.

While in-housing shows no signs of abating, some recent articles have suggested it is too complicated, costly and politically fraught for companies to do at any real scale. Other reports have said in-house agencies can struggle to reach their full potential because they often lack the support provided to external agencies, and struggles around attracting top-tier staff and keeping staff energized. Some experts have also said that in-housing is also not necessarily the right solution for every client.

Aside from saying that in-housing is growing, the report also noted that the composition of work by in-house agencies also changed over the past year, with 71% indicating a shift in focus by their in-house agency from traditional print to digital.

IHAF’s 2020 digital marketing maturity study in early 2020, found that 89% of internal agencies were already producing digital assets on behalf of their respective companies. “In-house teams were prepared to handle the near-total shift to digital that happened over the course of the pandemic,” said director Emily Foster, “and they did it without missing a beat.”

In-house agencies were also productive, with 37% reporting an increase in throughput and 47% maintaining pre-pandemic productivity.

Earlier this year, the U.S. Association of National Advertisers introduced an awards program for in-house agencies, with CEO Bob Liodice saying that the era of in-house creatives being tapped only for quick and inexpensive work are “long gone.” He said that in-house teams are increasingly leading creative and media strategy, producing broadcast-quality commercials and driving business results.

Chris Powell