MAD Media Post's Agency Daily
by Steve McClellan, Yesterday, 11:55 AM
For years, agencies have felt pressure from clients to cut fees and add value. Today that pressure increased sharply with the issuance of a new report from The Association of National Advertisers. The ANA used the D-word—disintermediation—to describe a fast growing trend developing within the advertiser-agency relationship.
But the ANA said that marketers aren’t going to other third parties so much as relying on their own internal resources to accomplish what they need to do in the ad marketing space.
The new survey, conducted in the spring, found that 58% of marketers now utilize in-house agencies, a 16 percentage point increase from 2008.
Just over half (52%) are assigning new marketing functions—digital, social and mobile—to their in-house agency. And 56% have moved established business from an external agency to an in-house one.
According to the survey, the shift is driven by internal expertise, greater cost efficiencies and quicker turnaround time. And it reflects an economic environment that “challenges corporations to do more with less,” the report concludes.
“We are seeing a seismic, eminently important industry shift between marketers and agencies,” said ANA CEO Bob Liodice. “The growth trajectory of advertising agencies is in question as marketers move existing and emerging functions in-house. The emergence of the in-house agency is a potential warning sign for agencies. We urge our agency peers to adapt to this new reality and offer greater value to avoid gradual disintermediation with clients.”
The ANA survey also cited “institutional knowledge” and in-house brand expertise as reasons for the shift. Also, the report found, the quality of in-house agencies appears to be getting substantially better. Five years ago 61% of marketers said a lack of deep strategic thinking was a weakness of their in-house shops. In this year’s survey only 30% cited that disadvantage.
In a blog post on the ANA website ANA Group Executive Vice President Bill Duggan elaborated that the most commonly handled service by in-house agencies surveyed is creative for collateral/promotional materials. Email, tradeshow/event materials, and direct mail are also widely serviced by in-house agencies.
Half of all in-house agencies handle some level of media planning and/or buying.
“Newer media, specifically social media, online display advertising, and search engine marketing, rank high on the list of media services handled in-house,” Duggan wrote. “In fact, when asked an open-ended question about the biggest changes in their in-house agencies in the past year, a significant number of responses centered around newer media.”
The new survey, conducted in the spring, found that 58% of marketers now utilize in-house agencies, a 16 percentage point increase from 2008.
Just over half (52%) are assigning new marketing functions—digital, social and mobile—to their in-house agency. And 56% have moved established business from an external agency to an in-house one.
According to the survey, the shift is driven by internal expertise, greater cost efficiencies and quicker turnaround time. And it reflects an economic environment that “challenges corporations to do more with less,” the report concludes.
“We are seeing a seismic, eminently important industry shift between marketers and agencies,” said ANA CEO Bob Liodice. “The growth trajectory of advertising agencies is in question as marketers move existing and emerging functions in-house. The emergence of the in-house agency is a potential warning sign for agencies. We urge our agency peers to adapt to this new reality and offer greater value to avoid gradual disintermediation with clients.”
The ANA survey also cited “institutional knowledge” and in-house brand expertise as reasons for the shift. Also, the report found, the quality of in-house agencies appears to be getting substantially better. Five years ago 61% of marketers said a lack of deep strategic thinking was a weakness of their in-house shops. In this year’s survey only 30% cited that disadvantage.
In a blog post on the ANA website ANA Group Executive Vice President Bill Duggan elaborated that the most commonly handled service by in-house agencies surveyed is creative for collateral/promotional materials. Email, tradeshow/event materials, and direct mail are also widely serviced by in-house agencies.
Half of all in-house agencies handle some level of media planning and/or buying.
“Newer media, specifically social media, online display advertising, and search engine marketing, rank high on the list of media services handled in-house,” Duggan wrote. “In fact, when asked an open-ended question about the biggest changes in their in-house agencies in the past year, a significant number of responses centered around newer media.”
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