In-housing surge continues despite widespread failings

Businesses may be keen to take more of their marketing work in-house but the majority of senior marketers admit the reality does not match the expectation and that they need more operational preparation to make in-housing succeed.

That is according to a new study by global marketing and commercial advisory firm Alchemists, in collaboration with ISBA and CvE, which quizzed senior marketers from a range of large and medium sized businesses in the UK which have either already in-housed or are planning to do so soon.

The State of In-housing 2023 Report found a huge disparity between the expectations for speed and nimbleness and the reality; 93% expected it to be greater as a result of in-housing but only 40% experienced it.

In addition, while 93% expected improved cost effectiveness as a result of in-housing, it was only experienced by less than two-thirds (60%) of those surveyed. In addition, 47% expected more confidentiality by having in-house capabilities, but only 20% cited it as a reality.

The survey and resulting report look in depth at in-housing structures in brand marketing functions and included responses from a range of companies including E.On and Arla Foods. Nearly two thirds (60%) of respondents said that they plan to in-house more of their marketing activity this year, which shows that the topic is at the forefront of the minds of senior decision-makers.

Despite the trend upwards towards further in-housing in the future, over two-thirds don’t see their in-housing plans as a threat to agencies.

There was also a gap in knowledge on how to effectively in-house, with a specific disparity arising between content production and data and analytics.

The report found that while three quarters (73%) of respondents have existing in-house provisions in place for content production, data and analytics are currently the least in-housed functions, with less than a third (27%) currently in charge of their own functions in these areas.

Almost 75% responded that they didn’t understand how to bring these functions in-house. This indicates a gap in knowledge which may be caused by constantly changing data protection legislation and customer privacy laws – resulting in companies being unable to keep pace and adapt with the ever-shifting demands in this area.

Despite the lack of knowledge on how to do it, the study found a willingness to change their current ways of working, with over half (58%) stating that their long-term aim is to manage tech operations in-house, via either their marketing, procurement or operations department.

Just 11% stated that they would manage them externally long term, via an agency or partner. “Taking control” was cited as the biggest motivator for bringing these functions in-house, which is in line with retaining ownership over private data.

Vlad Komanicky, CEO and co-founder of Alchemists said: “With the shift towards in-housing strategies now firmly entrenched into the marketing landscape, the role that advertisers and agencies play in this space is fundamentally changing. What is clear is that in-housing is never a binary decision, and businesses are looking for greater control, a factor which is the greatest driver of in-housing.

“The gap between brands’ expectations and reality shows that they require consultation and expertise on how to minimise this mismatch before actioning company-wide plans. To ensure money, talent and opportunity are not wasted, brands are going to need a deep understanding of why such a gap exists, and fix problems to deliver a return on their investment.”

ISBA director of agency services Nick Louisson added: “In-housing has become an increasingly important consideration for ISBA members. The report reveals that bringing services in-house can be more challenging than expected.

“As marketing models evolve it’s essential that marketers have access to the right insights and support to successfully transition to new ways of working. This report is a must read for anyone considering in-housing marketing services in their organisation.”