The rise of in-house creative operations: Navigating the new agency landscape

Vicky Hope

October 31, 2023

In-housing

Creative Operations

Design Operations

Creative

The advertising industry is undergoing a transformative shift as brands increasingly invest in their own marketing capabilities and establish internal creative and production studios. This trend, known as in-housing, has become a prominent feature of the marketing landscape, driven by the need for real-time reactions, faster content production, and the integration of data and technology.

The IPA's report "Shift Happens: What the Evolution of In-Housing Means for Agencies" provides substantial insights which we'll be aligning with our observations in the ecosystem of marketing creativity.

For marketing professionals dealing with in-house creative operations and traditional agency models, this post will shed light on how the agency landscape is being refocused, what it means for brand professionals, and how to adapt and thrive in this new paradigm.

The pivot to in-housing in modern marketing

In-housing has evolved from a newcomer to an established part of the marketing mainstream. Today, 90% of marketers are using or considering in-housing in some form.

Brands of all sizes and categories have embraced this trend, expanding their in-house capabilities beyond content production to encompass various marketing disciplines such as creative strategy, media planning, and digital marketing. The focus has shifted towards connecting data and media with creative content and leveraging technology for optimisation.

In-house teams are well-positioned to adapt to changes in brand organisations and optimise campaign activities in real time.

Beyond cost saving - The inherent values of in-housing

In-housing offers several benefits beyond cost efficiency, and in many cases, there are other factors besides the cost in weighing up a business's decision to build up its in-house capabilities.

More often than not, effectiveness is top of the agenda. By integrating data, channels, and content, brands can optimise their marketing strategies, improve real-time reporting and analytics, and deliver better integration and brand knowledge.

In-house teams provide brand guardianship, ensuring the quality of work and meeting Key Performance Indicators (KPIs) related to output quality.

Moreover, in-housing allows brands to consolidate and own their data, driving data-driven insights at the core of marketing. As in-housing continues evolving, brands seek fully integrated, real-time, in-house marketing ecosystems that enable business transformation.

The evolving role of traditional agencies

As brands increasingly adopt in-housing, the role of agencies in marketing ecosystems is shifting from being dominant service providers to becoming integrated partners.

While 95% of global brands still intend to work with external agencies, the agencies' value lies in their selective application of scale, experience, and independent perspectives. Long-term brand building versus short-term sales is a key balance for agencies to navigate, as many marketers realise the need to shift away from short-term thinking.

Brands that balance brand building and short-term sales will likely continue utilising external agency relationships alongside in-house solutions. Trust, respect, shared working practices, and open collaboration are crucial in fostering successful agency relationships.

Debunking the in-house creative myth

It's worth facing into a point I've heard a million times regarding in-house teams...

"They simply aren't as creative".

In truth, this usually comes from the agencies themselves. Fearful their work will dry up if one of their clients appoints an in-house team.

The reality is it's the perfect symbiotic relationship. Agency specialisms have become less common over the last couple of decades, with more and more full-service agencies who can "do it all" appearing. More often than not, they're driven by the bottom line and being able to extract as much value from their client relationships as possible. But this isn't always the best solution for the client.

If you want to rebrand, you go to a specialist branding agency. If you want a website building, you speak to a specialist web agency. When it comes to high-volume campaigns with optimised messaging and 'creative at pace' in a heavily regulated environment, you want a team of technical marketing experts working together as an extension of the client team - specialists with a deeper understanding of you, your business, your brand and your audience.

Addressing new challenges and opportunities for agencies

While in-housing might seem like a threat to traditional agencies, it opens a realm of opportunities. By reverting to specialisation and providing targeted services on an as-needed basis, agencies can carve out a distinct niche within the marketing value chain. It's also an entirely different environment and takes more profound and dedicated skills than a typical external agency offers.

Nonetheless, agencies must tackle challenges such as competing with MarTech companies, adapting to consumer content trends, securing talent, and distinguishing the unique skills they possess—skills that in-house agencies often cannot mirror.

The persuasive advantage of in-house teams for clients

In-house teams are becoming the ideal solution for clients looking for intimate brand alignment and efficiency. They serve as in-depth extensions, offering the expertise of specialist agencies meshed with an insider's brand perspective. This closeness to the brand's daily operations affords clarity and insights that are seldom achieved through routine agency engagements.

Agencies and in-house teams can collaborate effectively to serve the best interests of clients—synergy is the operative word here, defined by the joint drive to achieve excellence in the highly competitive and constantly evolving world of advertising.

After spending the last 26 years working client-side, agency-side and most recently, within in-house environments - the shift is most definitely needed.

From working in agencies that say 'yes' and then try to figure out how to do it, to working with some incredible agencies that specialise in one or two specific things and deliver fantastic solutions for clients.

In-house teams can offer the ultimate solution for clients because they provide the value and expertise of a specialist agency but sit alongside the client, living and breathing their brand, processes, customers and data.

This isn’t likely to be achieved in an arms-length relationship with an agency. The knowledge you gain from being part of the client's daily working environment helps provide clarity and insight that simply isn’t possible on the weekly status call.

In-housing is becoming more established and clearly defined, leading to its rapid growth and popularity. It's a clear differentiator to an external agency partner. It is not a variation of the same thing. As such, there's a huge opportunity for agencies and in-house teams to work together in harmony for the greater good of our clients.

Summary of key points

· The advertising market is proliferating, driven by digital platforms and increasing marketing consumption.

· Brands are investing in their own marketing capabilities and establishing internal creative and production studios.

· In-housing has transitioned from being a newcomer to an established part of the marketing mainstream, with 90% of marketers using or considering it.

· In-house capabilities have expanded to cover various marketing disciplines, driven by the need for real-time reactions and faster content production.

· In-housing offers benefits such as cost efficiency, effectiveness, brand guardianship, and data ownership.

· The agencies' role is shifting from dominant service providers to integrated partners within marketing ecosystems.

· Companies want to balance their long-term brand-building and short-term sales and find the right investment balance.

· Challenges for agencies include pressure on volume and margins, erosion of opportunities through consumer content creation, talent retention challenges, and the expertise and specialist skills in-housing agencies retain that aren't readily available as part of an agency talent pool.

In-house operations are becoming a distinguished force in marketing, with the potential for a harmonious future where agencies and in-house units operate collectively for mutual success.

Interested in discussing this more in-depth with our experienced founders to explore how this could work within your organisation? Then drop Ed or Vicky a line at ed@loopagencies.com or vicky@loopagencies.com – they’d love the chance to share their insights.

If you want to work with us, get in touch