Bek Agius — 17 November 2021
The trend among marketing teams to bring creative work in-house and self-produce marketing and advertising materials continues to gain momentum, fuelled by a range of post-pandemic impacts on marketing.
The need to empathise with changing customer needs and tailor the customer experience accordingly across channels has spawned new requirements to produce more empathetic, on-brand work, faster. Agility is another key requirement, as brand owners look to test, learn and change that messaging to achieve the best possible outcomes.
Cost and productivity are also key factors: it’s expensive, as well as slow, to outsource the creation and re-versioning of every digital ad, social post and brochure.
Against that background, it makes sense for brands to invest in their own creative production capabilities - particularly when it comes to high-volume disciplines such as digital, social, marketing collateral and content marketing.
But exactly who is investing in in-house creative production, and how can marketers get the return they need from in-housing in the current environment?
Once mostly the domain of retailers, in-house creative agencies have now been adopted by blue-chip brands globally across a range of consumer, digital, financial, retail, technology and entertainment brands.
Two in three brands (67%) have established some sort of in-house creative presence in Australia, recent research shows, with a further 14% considering taking the plunge; that would see the proportion of brands ‘making their own’ marketing rise to more than four in five.
In-housing has moved well past being dominated by particular sectors such as retail, with brewer Carlton & United Breweries establishing its own in-house agency, along with Commbank and pay-TV provider Foxtel. They’re in good company: an In-House Agency Council was formed in 2020 - backed by brands including Sportsbet, Carsales.com.au, News Corporation and others - to share learnings about in-housing.
The data reflects well-established trends in the US, where close to four in five brands (78%) reported having an in-house agency presence in research conducted by the Association of National Advertisers.
Cost efficiencies, better brand and institutional knowledge, dedicated staff, speed and agility were the top reasons brands gave for making the move.
Big-name US consumer brands now have sizable in-house creative production units, including PepsiCo and Frito-Lay, whose in-house creative team comprised just two people three years ago and is now making Super Bowl commercials.
In the UK, three in five advertisers (62%) reported looking to reduce their reliance on external suppliers as they moved towards on-site and in-house solutions, according to a study from the Incorporated Society for British Advertisers.
High-profile British brands are taking on the challenge, with Lloyds Banking Group recently establishing Beehive, a 30-strong, in-house creative agency, tasked with producing up to 9,000 pieces of customer communications a year. Retail chains Boots and Marks & Spencer have made similar moves.
Bank brand ANZ’s CMO Sweta Mehra described the speed, cost and brand consistency changes facing her brand as she also contemplates a hybrid model that involves bringing some creative work in-house while continuing to work with agencies on a smaller range of strategic projects:
Yet some have questioned whether marketers are achieving the desired outcomes from their in-house creative teams, with costs, production efficiency, managing volume growth and the ability to manage resources to scale among the chief concerns.
In-house agencies can be a victim of their own success, with two in three (65%) reporting significantly increasing workloads, according to the ANA, while managing workflow due to increased projects, and scaling efficiently/managing resources are the top two challenges.
Increased productivity is a key objective for almost one in two brands that bring creative work in-house, according to research by the Data and Marketing Association, but just 32% believe this objective has been achieved.
In-House Agency Council chief and founder of in-housing consultancy Lution, Chris Maxwell, says most brands with an in-house creative capability prefer to work with both in-house and external agencies; but 70% of the work, on average, is done in-house.
“For client-side marketers, this is the model of the future, and this is what people are going to be doing more and more. Most people who have an in-house agency believe the right way forward is a mix of in-house and external agencies. There is a hybrid model and we are big believers of getting the right people to do the right jobs," Maxwell says.
The research also suggests the appetite for in-housing will only continue to grow, with 73% predicting their in-house agency's workload will increase in the next 12 months.
Cost efficiencies, greater speed and agility and a better understanding of the brand were listed as the benefits of in-housing by marketers already working with an in-house agency while those that did not considered set-up costs as the biggest hurdle.
One thing many brands overlook as they bring creative production resources in-house is that to achieve efficiency of production and brand consistency at scale, in-house agencies should be set up slightly differently from external agencies that expect to create bespoke work every time.
We know this model works; brands including Red Hat, Durham University and mortgage broker Aussie have all achieved improved brand consistency and output cost-effectively by self-producing their on-brand marketing work with Outfit.