More brands are bringing their marketing efforts in-house compared to a decade ago, according to a joint study by Forrester and the In-House Agency Forum. Creative control, efficiency and knowledge of the brand were among reasons cited for this change, although a majority of respondents insisted that external agencies are not under threat.
As reported by The Wall Street Journal, the In-House Agency Forum surveyed 325 companies that included marketers both with and without internal agencies. Among respondents, 64 percent said that they had an internal agency, compared to 30 percent that did not.
A decade ago, internal agencies were employed by 42 percent of brands. This uptick in bringing services in-house may be attributed to the economic recession 10 years ago, the study asserted. Back then, cost efficiency was a priority in lean times. Now, brands are more concerned with efficiency and intimate knowledge of the brand.
That’s not to say that brands aren’t in it to save money. Earlier this year, Procter and Gamble announced that it would save $400 million by slashing its agency roster. In fact, several respondents in this survey named “cost-effectiveness” as a top advantage of bringing marketing efforts in-house.
Such internal agencies charge a lower rate—between $50 to $74 per hour, according to the survey, compared to external firms must typically cover overhead. These in-house efforts aren’t out to make a profit in many cases, according to Jarrett King, who runs the in-house agency at The Coca-Cola Company.
“We’re not trying to make money in the operation,” said King in the survey findings, adding that external agencies are profit centers. “We’re here just to cover our costs. We’re studying rates; it’s all about getting to net zero versus showing shareholders or constituents a profit.”
The Forrester/In-House Agency Forum study confirms an ongoing trend of brands taking a stance of “if you want something done right, do it yourself.” A May report by the IAB Data Center of Excellence found that two-thirds of brands were bringing programmatic in-house.
These findings are also in keeping with research by the ANA, which found that 35 percent of brands reduced the role of external agencies for their programmatic needs in 2017, compared to just 14 percent in 2016.