Creative in-housing hits 57 per cent among multinationals, WFA report
Large global companies are rapidly expanding the scale of their in-house creative agencies, particularly for digital content, according to new research undertaken by the WFA and The Observatory International.
Three out of four in-house units have been set up in the last five years and in-house teams are attracting more work, with 82 per cent saying workloads are increasing in the last year. Anecdotal reports also suggest that coronavirus has not led to cut-backs in these agencies, but in some cases quite the reverse.
Respondents report that moving creative work in-house is delivering cost efficiencies, better integration and increased brand and business knowledge. Fifty-five percent also reported that in-house teams had quicker and more agile processes.
Global Trends in Creative In-Housing is based on responses from 53 advertisers with an approximate annual global spend of $ 83 billion.
The report found that out of the multinational companies that have an in-house agency, almost all, 94%, have in-house creative capabilities for digital content. This compares with around half who have in-house media planning and buying capabilities.
The majority of creative resources are based around a centralised studio at HQ with 50 per cent adopting this structure. Twenty-three percent reported a decentralised structure and 15 per cent had regional teams.
Almost all respondents continue to work with external agencies however, and among this group approximately 37 per cent of creative output now comes from the in-house team.
Despite the widespread assumption that advertisers could struggle to attract high quality talent, respondents reported an average staff turnover of just 9 per cent. Most of these teams have been set up in the last five years, so it may be that their relative youth contributes to this solid performance.
Stephan Loerke, CEO, WFA. “What this survey highlights is the need for clearly defined roles and responsibilities as well as a clarity over scope of work for each agency, in-house and external. Having an imbalance in working processes creates problems and challenges that could mean that neither resource is used to maximum capability.”
A number of respondents did report managing the relationship between their external and in-house creative teams was a challenge. Some looked to external agencies for big, strategic ideas development, with regular production work done in-house but others had the reverse approach.
Almost 40 per cent said that they allowed both in-house and external agencies to pitch against each other for projects to drive the best possible responses. One problem was that 43 per cent said they briefed in-house agencies differently to the external ones, and 52 per cent admitted that their in-house agencies were assessed by different KPIs.
Rob Foster, Senior Consultant, The Observatory International: “In-housing creative resource is proving to be a success for brands who have undertaken the necessary operational reviews and have built a resource that is designed to complement their external agency model and meet objectives specific to their business. That isn’t to say that it is suitable for every company, and there are a wide range of factors to be considered before embarking in an in-housing journey. Ultimately, it is not just as simple as hiring some people directly, but instead is a major operational change that impacts company culture, ways of working, technology, agency relationships and cost models.”