What you need to know:

• Optus, Sportsbet, MYOB, Carsales, News Corp and Lution are among the blue chips backing the In-house Agency Council (IHAC).
• IHAC members include Carlton United Breweries, Kantar, Australia Post, The Star Entertainment Group, Eucalyptus and Hawthorn Football Club.
• The council aims to share best practice, build capability, and advocate for in-house agencies.
• 10-20 per cent of Australian brands currently have some in-house capabilities, according to estimates. 
• The market is on track with more mature markets, such as the US where 78 per cent of brands have in-house agencies. 
• In-house agencies provide savings of between 30 per cent - 40 per cent. 

Marketers from Optus, Sportsbet, MYOB, Carsales and News Corp have joined forces with in-housing consultancy Lution to launch the In-house Agency Council (IHAC) to promote advocacy, build capabilities and share best practice for the industry. 

The not-for-profit organisation comprises a board of seven, led by Lution CEO and former CUB marketing boss Chris Maxwell, as founder and chairman, alongside Carsales chief marketing officer Kellie Cordner, Sportsbet general manager marketing Tim Hernadi, MYOB head of design, agency and brand Belinda Watson, Optus consumer marketing director Angela Greenwood, Newscorp Managing Director - Commercial Content Mike Connaghan, and brand and marketing advisor Michael Sinclair.

The industry body launches with members including Carlton United Breweries, Kantar, Australia Post, The Star Entertainment Group, Eucalyptus and Hawthorn Football Club.

The aim is to promote collaboration between brands to share knowledge and skills, with an aim to provide secondments for agency staff as well as training, networking events and awards. It also aims to bolster the reputation of in-house agencies and break the stereotype that in-house agencies are “less sexy” than external agencies.

The launch comes as the in-house agency model continues to gather steam locally, with estimates that between 10-20 per cent of Australian brands use in-housing in some capacity for their advertising and marketing activity.  

While this sits well behind the US - where 78 per cent of brands had in-house agencies in 2018 - the local market is believed to be on the same growth trajectory as more mature markets like the US and UK. According to IHAC, 70 per cent of members expect to grow their own in-house offerings in the next 12 months.

Cost and efficiencies remain key drivers for in-housing with internal agencies estimated to deliver savings of between 30-40 per cent compared to external agencies, depending on the services and capabilities required.

IHAC founder and chairman and Lution CEO Chris Maxwell said the idea came from talking to marketers with in-house agencies and realising that everyone had the same questions and challenges but there was no forum to come together and share the pain and the wins. 

"I realised all these businesses were dealing with the same thing, but no one's talking to each other. There's no common place where they can come together and learn and share from each other.  The media industry has the Media Federation, and the creative industry has the Comms Council and marketers have the AANA, AMI or ADMA, but there wasn't any industry body, representing in house agencies. Our ambition is to create that space and to help raise the level of capability across the industry and deliver better outcomes for the businesses."

Saying Yes to in-housing

When Optus launched its in-house creative development agency ‘Yes’ in 2017, it initially focused on internal communications and retail store materials, however, it has now expanded to incorporate through-the-line advertising - including video production – and is staffed with 35 people.

Greenwood said Optus also brought its paid search services in-house to ensure its digital marketing strategy was fully aligned to its business strategy and ROI, however, it still operates “an agency village” model, working with a number of external agencies.

“Marketers want greater speed to market, they want greater efficiency, in their end-to-end process, they want greater control and collaboration. And they really want to be able to ensure that they can align their in-house agency resource very closely to the business goals,” said Greenwood.

Can’t beat the cost

MYOB has had an in-house agency for 10 years which is responsible for the end-to-end development of all the brand’s marketing and communications. The 30-strong agency also works with an external media agency for above-the-line media buying and specialist agencies on a contract basis for video, social media and content production.

“You just can't beat the cost,” said Watson. “In a world where businesses need more transparency on their ROI and what they're getting for their money, you just can't beat the cost efficiency of an in-house agency.  You get better brand consistency, you have more control over your brand and how its represented in market. There's shorthand knowledge that external agencies wouldn't have. Integration of systems and processes. And the transparency of resources and knowing the people that are in your agency are 100% committed to your brand. You don't get that transparency or control from an external agency.”

Betting on the in-house model

Sportsbet operates an extensive in-house agency, which incorporates media and marketing content divisions and includes brand advertising, creative, content, partnerships, PR, video production, design and has a fully operational in-house studio. The in-house agency has 40 people in the marketing content team and 25 in the media team. Sportsbet continues to work with an external media agency PMG and production companies for larger-scale productions.   

“The model that we've got in place is a reasonably mature one, that is geared to drive strong business performance for our fast-paced retail environment,” said Hernadi. “[The model ensures] our ability to respond quickly to what's happening, whether that’s in a social sphere or a competitor who's launched a new offer.”

“One of the real big advantages of this group is that each of the advertisers has a different model and it enables you to identify who has the capability that you can go and talk to, and learn from, rather than completely start from scratch.”

Getting the lay of the land

In a bid to provide a full picture of the current in-house agency market in Australia, IHAC has partnered with Kantar to undertake a survey of marketing professionals. The survey aims to highlight the size and structures of in-house agencies, the services being managed in-house and the benefits and challenges of in-housing.  You can access the survey here.