New research investigates rising penetration, role and benefits of in-house agency model

New IHAC and Kantar research released to explore Australia's use of internal agencies and whether they satisfy marketing demand

The growing number of Australian brands with in-house agencies see brand knowledge, cost efficiencies and speed and agility as the biggest benefits to the approach, a new report claims.

The first In-House Agency Council (IHAC) report, Australian In-House Agency Landscape, produced in partnership with Kantar, sought to understand the penetration of in-house agency models in the Australian market, as well as perceptions of their performances and challenges. The survey was undertaken in June and canvassed more than 100 brand-side marketers, internal agency staff as well as external agency personnel.

According to the report, penetration of the in-house agency model in Australia sits at 67 per cent, with eight in 10 Australians ‘aware’ of the concept. Of those who don’t have an internal agency, 14 per cent are considering it.

For those who have embraced such an approach, 86 per cent reported being satisfied with the results, with only 7 per cent dissatisfied. The top five KPIs used to gauge success are business performance (60 per cent), cost savings (40 per cent), brand perception (40 per cent), employee performance reviews (37 per cent) and accuracy of work (37 per cent).

Of those with an internal agency set-up, the report found 77 per cent also use an external agency. The largest proportion of in-house agencies have between 5 and 25 staff (37 per cent), and 14 per cent have at least 50 staff. Just over one in five had five employers or fewer (21 per cent). The report also looked at the vintage of these internal divisions and found 39 per cent are under five years old.

The biggest task for the internal agency is creative for digital media (84 per cent), followed by social media (74 per cent) and creative for ‘traditional’ media (70 per cent). Less common roles include SEO (33 per cent), media planning or buying (44 per cent) and PR (47 per cent). On average, in-house agencies are handling 7.7 services.

Read more: Why more CMOs are investing in an in-house agency model

Perhaps not surprisingly, brand-side respondents are more positive overall about the internal agency model than external agencies. For instance, 86 per cent of marketers reported being satisfied with the performance of the internal agency, against 64 per of external agency respondents. In addition, the majority of brand-side respondents found in-house agencies to be increasingly a complement to external agencies, however only 41 per cent of external agency respondents felt the same.

Less consistent were perceptions of the benefits and challenges of establishing an in-house agency model. For example, IHAC’s report showed those who had invested cite twice as many benefits as those who haven’t. Those who haven’t adopted this approach cited set-up cost as their top challenge, yet those with in-house agencies rated this as their least significant concern. IHAC attributed this to a feeling that the benefits outweigh the costs once such teams are in play.

Top benefits to having an in-house agency are better brand knowledge (84 per cent), cost efficiencies (84 per cent) and speed and agility (84 per cent). The biggest challenge is managing workflow (44 per cent), product prioritisation (37 per cent), expanding capabilities (35 per cent) and recruiting top talent (35 per cent).

IHAC founder and chairman, Chris Maxwell, noted a 2018 similar study undertaken by the US Association of National Advertisers (ANA) suggested penetration of the model locally is further along than expected, and only five years behind the US market.

“There are clear benefits including better knowledge of brands, cost efficiencies, speed and agility, but also consistency of output, overall ease of working with and greater control over your own data,” Maxwell continued. “The model is not without its challenges, with managing workflow, project prioritisation and expanding capabilities some of the primary challenges.”

IHAC was established as a council earlier this year to support the rise of the internal agency model as well as provide best practices and research into the growing marketing approach.

Don’t miss out on the wealth of insight and content provided by CMO A/NZ and sign up to our weekly CMO Digest newsletters and information services here.  

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Anyone can become a victim of the sophisticated schemes set up by these scam websites. It's not about being smart; I don't consider mysel...

Mathieu Lecompte

ACCC takes Meta to court over scam cryptocurrency advertising

Read more

Nice blog!Blog is really informative , valuable.keep updating us with such amazing blogs.influencer agency in Melbourne

Rajat Kumar

Why flipping Status Quo Bias is the key to B2B marketing success

Read more

good this information are very helpful for millions of peoples customer loyalty Consultant is an important part of every business.

Tom Devid

Report: 4 ways to generate customer loyalty

Read more

Great post, thanks for sharing such a informative content.

CodeWare Limited

APAC software company brings on first VP of growth

Read more

This article highlights Gartner’s latest digital experience platforms report and how they are influencing content operations ecosystems. ...

vikram Roy

Gartner 2022 Digital Experience Platforms reveals leading vendor players

Read more

Blog Posts

​Why we need to look at the whole brand puzzle, not just play with the pieces

Creating meaningful brands should be a holistic and considered process. However, all too frequently it’s one that is disparate and reactive, where one objective is prioritized at the expense of all others. So, what are the key pieces to the ‘good’ brand puzzle?

Marketing overseas? 4 ways to make your message stick

Companies encounter a variety of challenges when it comes to marketing overseas. Marketing departments often don’t know much about the business and cultural context of the international audiences they are trying to reach. Sometimes they are also unsure about what kind of marketing they should be doing.

Cynthia Dearin

Author, business strategist, advisor

From unconscious to reflective: What level of data user are you?

Using data is a hot topic right now. Leaders are realising data can no longer just be the responsibility of dedicated analysts or staff with ‘data’ in their title or role description.

Dr Selena Fisk

Data expert, author

Sign in