Expect In-House Agency Trend to Continue

By Bill Duggan, Group EVP, ANA

Expect the trend of marketers expanding and/or launching in-house agencies to continue in 2018. If the Ad Age 2017 Marketer of the Year does its creative in-house, that’s certainly a model that should be considered for many others. Tito’s Handmade Vodka was recently given that recognition. The brand now owns a 7 percent share of the vodka market, up from just 1 percent in 2011.

The ANA has observed a dramatic increase of in-house activity. Lower costs, faster turnaround, concerns about transparency, and a desire to control one’s own data have all driven activity in-house. Costs and turnaround have been the long-term reasons to consider in-house; transparency and data are emerging reasons.

Digital and social media work particularly lend themselves to in-house, considering the real-time responsiveness often required and internal “social media command centers” some marketers now have. Tito’s, interestingly, built its business as a word of mouth brand and that includes an active presence on Facebook (96 thousand followers) and Twitter (55 thousand followers).

Marketers are increasingly turning in-house for their programmatic media needs, given the desire for greater transparency. That most often consists of online display, mobile display, online video, mobile video, social display, and social video. According to new ANA research, 35 percent of marketers have expanded their in-house capabilities for programmatic buying while reducing the role of external agencies. (Source: The State of Programmatic Media Buying)

Data ownership is another benefit of in-house. In traditional advertiser/agency relationships, contracts should specify that ownership/control of campaign data lies with the advertiser and should ensure transparency of, control of, access to, and portability of that data. Further, contracts should be clear whether the agency and third parties can aggregate the advertiser’s data with other data it owns. We are seeing an increase at ANA member companies in titles like “Director, Analytics & Data Science” and “Lead, Data-Driven Marketing Analytics.”

There is a robust appetite for learning about in-house agencies in our ANA committees system. We have an In-House Agency Committee based in New York that meets quarterly and is now our highest-attended committee — we had more than 100 attendees at a recent meeting! In 2018, we are launching the In-House Agency Committee, West Coast chapter.

The ANA In-House Agency Fact Book highlights the structure, capabilities, and operations of in-house agencies at ANA corporate member companies. The ANA gratefully acknowledges participation from American Express, Bank of America, Becton Dickinson, Humana, JPMorgan Chase, MGM Resorts, PwC, Vision Service Plan, and The Wonderful Company. The fact book serves as a reference for other in-house agencies and those looking to start their own in-house agency.

Marketers will always want work done faster and cheaper — benefits that in-house agencies can provide. In-house agencies are now providing the benefits of transparency and data ownership.

I’m excited to see what lies ahead in 2018 for the in-house agency community.