What you need to know:

• In-housing survey of 24 brands finds they rate key aspects higher than outsourced equivalents on all key metrics bar access to tools and tech.
• 75 per cent expanded in-house scope over last 12 months, 75 per cent plan to do so over next 12 months. None paring back.
• Talent shortage key blocker to expansion, particularly in data-analytics and programmatic trading.
• Access and ownership of data, agility and speed trump cost efficiency in benefits cited.
• Two thirds of brands think traditional media best left to standalone agencies. Circa half think MMM/ROI should be provided externally.
• In-House Agency Council launching talent portal in bid to solve recruitment challenge.

Brands spending circa $600m in media – including AFL, Asahi, Betfair, Employment Hero, Keypath Education, MYOB, Optus, Seek, Specsavers, Sportsbet, Treasury Wine Estates, TTI and Youi are scaling up in-house agency operations and expanding their remits.

All of them rate their in-house teams – predominantly hybrid structures – better than their outsourced equivalents on almost every metric, bar access to specialist tech and tools, per a first of a kind study by the In-House Agency Council.

The findings go some way to answer criticism that brands are failing to benchmark in-house units versus traditional agency arrangements, though critics may question whether brands are likely to give their own set-ups a poor score card.

Across 24 firms surveyed, media budgets range from $1m to over $100m per annum, averaging $35m. The median size of in-house teams is nine full time staff equivalents, though that is skewed by a low number of large teams of up to 50 people. Almost half of respondents are operating small teams of three to four staff.

Benefits finder

Cost efficiency was cited as a benefit, but was secondary to access and control of data, speed, efficiency and agility gains versus outsourced models. Some 58 per cent of 24 brands surveyed said that integration between media and creative was better via their in-house model than it had been under an outsourced approach.

Three quarters (75 per cent) said they had expanded their in-house team over the past 12 months, with the same proportion planning to expand over the year ahead. None plan to downsize or reduce scope.

However, like traditional media agencies, attracting talent is the primary challenge. Skilled operators across programmatic media trading, market mix modelling/ROI and data & analytics are currently scarcest resources to recruit.

Of firms polled, 83 per cent operate hybrid units with 17 per cent handling everything internally. The average in-house agency has been running for five years, though that is skewed by some running units in-house for 10 years plus: circa half of those surveyed have been operating in-house models for under three years. Some 61 per cent of respondents had previously worked for a traditional media agency for an average of seven years.

Buying remits

Digital channels are the most likely to be managed in-house. Some 96 per cent manage social in-house with video, search and digital display being managed by circa 80 per cent.

A significant minority of respondents are also managing traditional channels in-house: TV 21 per cent; OOH 38 per cent; radio 42 per cent and print 25 per cent.

However, almost two thirds (63 per cent) of brands polled think traditional media trading is best handled by standalone agencies. Roughly half of respondents said ROI/market mix modelling is best outsourced.

“I think a key takeout is that cost saving is factor, but not the main aspect for brands in-housing. I was expecting cost to be cited as the key benefit. But brands say it’s about speed, agility and responsiveness to business needs – and crucially ownership of data,” said Chris Maxwell, IHAC chair and founder of in-housing consultancy Lution. “That comes through loud and clear.”

Another surprise was the number of brands handling traditional media in-house, said Maxwell, though he thinks the near-two thirds of respondents that think that should be left to external agencies are linked to findings that access to tools and tech is where in-housing underperforms versus standalone agencies.

Maxwell thinks that presents an opportunity to tech and insight providers.

“Tools and tech is a complex area. A lot of the big media holding companies have built bespoke platforms for holistic media and planning. In-house agencies are stitching kit together. I think there could be an opportunity across tech, data and reporting for providers to package more suitable products.”

Equally, Maxwell thinks the survey underlines that in-house agencies still require services from their specialist counterparts.

“Almost all of the people who responded said there is still a role for agencies to play – and that there are some things best left external. It is not binary,” said Maxwell. “Those services may be a different mix to what has traditionally been required, but they want to work with third parties – the opportunity is there.”

Maxwell said brands’ plans to expand in-house agency remits and teams will exacerbate an already tight talent market. IHAC will next week launch a careers program and talent portal.

“The number one challenge is talent. On the flip side, we are increasingly being approached by people seeking in-house roles. So we are aggregating all of the open roles available across in-house agencies on our website and then on the talent portal, interested individuals can upload their profile – anonymously or overtly – and we will circulate those profiles across the IHAC’s membership.”

Key findings:

The top five capabilities businesses are in-housing:

• Media analytics and reporting (90 per cent of respondents are doing this in-house)
• Digital media trading (86 per cent)
• Communications and media strategy (71 per cent)
• Programmatic media trading (71 per cent)
• Media implementation planning (67 per cent)

Top benefits (where at least 50 per cent of sample agreed):

• Ownership of data (90 per cent of respondents agreed)
• Improved agility and speed (80 per cent)
• Improved efficiency (75 per cent)
• Better access to reporting (70 per cent)
• Increased effectiveness (65 per cent)
• Improved Integration (65 per cent)
• Ability to optimise (65 per cent)
• Greater trust (60 per cent)
• Savings/reduced Cost (50 per cent)

Biggest challenges (where at least 50 per cent of sample agreed):

• Staying abreast of trends and innovation (65 per cent of respondents agreed)
• Cost of tech and tools (65 per cent)
• Recruiting and retaining talent (60 per cent)
• Scaling resources when required (55 per cent)
• Technical skills/capabilities (55 per cent)
• Access to the best rates (50 per cent)

See the full report here.