Can in-house agencies sustain their productivity boom?

A new article on Marketing Dive reports that even as project volumes have jumped for half of in-house teams -- a result of the pandemic's premium on digital -- collaboration processes for hybrid work still need to be realized.



In-house agencies appear to be in an advantageous position heading into 2022, having largely avoided some of the problems weighing on other segments of the marketing services category. Still, the supposed benefits of internal shops -- a closer connection to the brand and the collaboration opportunities that entails -- could face challenges as employees adjust to new working models and the omicron variant of COVID-19 further pushes back return-to-office plans.

"There is something about the co-creation process that remains to be seen in a hybrid environment," said Marta Stiglin, founder of Stiglin Consulting and a partner on a new benchmarking report from the In-House Agency Forum (IHAF), a trade group where she is a founding member and has sat on the board for over a decade. Forrester Research helped field the research.

"It's not to say this is the death knell for co-creation. It's not," Stiglin added. "It just remains to be seen what the next generation of that will be for creative organizations, internal and external."

Just 7% of in-house agencies have returned to the office full-time and an additional 2% expect to do so in 2021, according to the IHAF findings that drew responses from 265 companies including HP, Nestlé and PwC. But if figuring out how to catalyze "a-ha" moments in a virtual environment is a looming consideration for leaders at these organizations, it has yet to create a speed bump to productivity.

The pandemic has fueled an increase in project volume for half of in-house agencies surveyed, the majority of it digital. Eighty percent of respondents agreed they've brought more marketing assignments in-house. The ramp-up in workflow hasn't proved overwhelming, either, as 47% reported no impact on the rate of production and 37% actually saw their throughput increase. If those figures sound rosy, a question of sustainability remains as the industry continues to navigate a period marked by uncertainty and transformation.

"We saw ... in the IHAF data a big uptick in productivity and throughput. And a lot of that was demand-driven," Stiglin said. "Will these organizations become organizations that continue to pride themselves on productivity and throughput and at what cost to creativity and ideation?"

Digital provides the fuel

The IHAF's latest research provides a bit of a counter-narrative to discussions swirling around in-housing this year. Earlier reports suggested that companies had cooled their in-housing strategy due to cost considerations and difficulties achieving scale, issues exacerbated by economic volatility caused by the pandemic. Yet, the IHAF found that penetration of in-house agencies among marketers grew to 77% this year, up 7% versus 2019.