In-house agencies (IHAs) are evolving, with an ambition to achieve lead agency status for their businesses. But they are being held back by poor internal processes, a lack of strategy as a discipline, and the challenges of transitioning from being seen as a service provider to being recognised as a strategic partner.

For the first time, leaders of in-house agencies in the UK and EMEA have shared their challenges, priorities and ambitions for the future in a unique survey conducted by the In-House Agency Leaders Club. Almost 50 major brands took part in the IHALC In-House Agency Benchmarking Survey, including The Body Shop, Channel 4, Citi, Three, BP, Reckitt and Specsavers.

AMBITIOUS IN-HOUSE AGENCIES ARE EVOLVING

As confidence in their capabilities grows, IHAs are evolving, with almost 60% of IHAs working on above-the-line advertising. When IHALC asked IHAs to classify themselves as one of four broad agency types – production studio, creative studio, creative agency and lead agency – 57% self-identified as creative agencies with the capability of originating and developing campaigns, while just 15% saw themselves as lead agencies today.

However, almost 50% said that their ambition was to achieve lead agency status in future, where the IHA would be devising campaign and brand strategy and originating big campaign ideas for its brands.

WHAT’S HOLDING THEM BACK?

The data shows us that IHAs want to be known for their creativity above all else, and see raising the standard of their creative work as their number one priority. However, the survey reveals significant gaps in both the capabilities and processes needed to achieve this.

The absence of strategy capability is the most glaring issue – only 35% currently have any kind of planning function and only 22% having a strategy director. Unsurprisingly, IHAs report significant challenges with briefing (54% of IHA leaders scored marketing 4/10 or less for the quality of their briefs).

While communication between IHAs and marketers is generally good, as is collaboration, poor quality feedback and marketers’ lack of understanding of the creative process are also an issue. Only 40% of IHAs have client services or account management in place.

Operational issues compound the problem. Work produced is, in the majority of IHAs, not tracked, not costed, and not effectively governed. There are high volumes of ad-hoc or reactive work. It’s no wonder then that IHAs report their biggest barrier to doing better work as ‘a lack of time/forward planning’.

EXTERNAL PARTNERS ARE STILL ESSENTIAL

While many IHAs have the ambition to be doing more tier 1 conceptual creative work, external agency partners remain a vital part of the mix with 82% of IHAs turning to them for above-the-line campaign creative. IHAs mostly look to external agencies for access to skills and talent, to provide a fresh perspective and for their knowledge and expertise.

Most (63%) see external agencies as partners rather than rivals and feel that they collaborate well with them: “We work in total partnership with our external agency, developing and producing campaigns as one team,” one IHA leader said.

So while the IHA-external agency relationship is often characterised as an ‘either/or’, with the IHA cast as a threat to the external agency world, success would appear to lie in effective collaboration. Each IHA will have its own ever-evolving recipe for the right mix of in-house and external capability.

BETTER UNDERSTANDING = BETTER WORK

While IHAs told IHALC that their main priority for the year ahead was ‘raising creative standards’, ‘improving relationships with brief owners/stakeholders’ was a very close second. Just behind that came ‘improving effectiveness’, ‘improving processes’ and ‘reputation building’. Only 29% cited ‘reducing costs’ as one of their main priorities.

These are all inter-related essentials for success and growth. Better processes will help improve the effectiveness of the type of work that the IHA currently does. Improving relationships with business unit heads and brief-owners, listening to them, understanding their challenges and identifying opportunities to solve them, can open up the chance to take on additional ‘stretch’ projects which go beyond what the business might think the IHA is currently capable of. Making a success of those builds the reputation of the agency and creates the virtuous circle that can secure the buy-in, resource and confidence to evolve the IHA and its remit.

Every IHA is different, tailored to meet the needs of its business. But the survey reveals a desire to evolve and grow what IHAs are capable of. Successful IHA leaders are great advocates for their agencies, making its case every day, winning over colleagues and unlocking the potential that IHAs undoubtedly have. In their hands, in-house agencies have an exciting future ahead.

Download the full IHALC In-House Agency Benchmarking Survey report here

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