The challenges of in-house agencies: can they be overcome?

The concept of the in-house agency is on the rise. Instead of outsourcing marketing, design, and advertising functions to an external agency, more and more brands are looking to create self-sufficient departments that can do everything themselves. These departments may also do work for suppliers or clients of the business, in theory helping to create greater cohesion across the board.

For many brands, this sounds like a dream scenario. They don’t have to worry about finding external agencies, which may involve trial and error, not to mention increased costs. However, it can be tricky to get right. Lots of in-house agencies tend to run into many of the same common problems, including poor staff recruitment, retention, and morale, and finding an operating model that actually works.

So, what’s the solution? Is there any hope for in-house agencies to work in the long term, or are they just another fad? I believe that, when done right, they can work well, but it’s a fine balance. This post explores some of the common problems encountered by in-house agencies, and what can potentially be done to combat them

Establishing a solid operating model

A survey from digital agency Collective highlighted that 43% of chief marketing officers who responded thought that in-housing was an ‘operational headache’. This appears to stem from the fact that the in-house model can easily become inflexible and unimaginative. It’s no surprise that this can become an operational headache, as the nature of creative work doesn’t mesh very well with a cookie cutter approach.

I tend to find that a common problem with in-house agencies is that they don’t have clearly defined lines of responsibility. Internal teams tend to merge with each other and become muddled as a result. This can be frustrating for everyone involved, and waste time and resources trying to get things straight.

This problem can often be solved by using a bespoke operating model instead of something generic. The RACI model is often helpful here. In its simplest form, this involves assigning the people who are Responsible, Accountable, Consulted, and Informed at every stage of a project. It creates clear guidelines for different responsibilities and makes creative operations far more straightforward. A model like this is useful for in-house agencies where responsibilities are often confusing because they are generic, and nobody quite knows where they stand.

When working with in-house agencies, I use my process mapping workshop to establish the right ways of working for that particular team. This workshop also identifies the best practices and responsibilities that are needed to govern the ways of working in an in-house capacity, which can be very useful for in-house teams who have lost their way.

Finding and retaining talent

It’s no secret within the creative industry that finding and keeping good talent is hard. So, it makes sense that this would apply to in-house agencies as well. For example, in the 2022 In-House Creative Industry Report from Cella, 39% of respondents said their in-house team was not adequately staffed to meet client demand. And, 27% of respondents to the Collective survey stated that staff retention, cost-effectiveness, and the difficulty of attracting new hires were significant challenges for their in-house operations.

However, it also makes sense that it depends on the brand here. It’s doubtful that big, modern, and exciting brands like Nike or Apple are struggling to recruit for creative roles. For many creatives, a role in an in-house agency at these sorts of brands would be a dream come true because they get to essentially work with the best client 100% of the time. However, for brands that aren’t quite as exciting in demand, recruitment and retention can be a real problem.

Lots of creative people are drawn to working in a traditional agency because they like the chance of working on different projects and clients all of the time. This keeps things interesting and allows them to develop their creative skills on various projects. It makes sense then, that at an in-house agency, creative people can become bored more quickly, because they’re working for the same client all of the time, and often on similar, repetitive projects.

There are a few ways to combat the problem of recruitment and retention in in-house agencies. For example:

Ensure you’re creating an environment that the best talent actually wants to work in. This means providing ample opportunities for progression, training, and projects that stretch their creativity.

Create a good culture. Culture is important for the vast majority of traditional agencies, so why not in-house? A culture of open communication is also a crucial way of ensuring that the team feels comfortable enough to speak up when they have issues, so they can be solved instead of the team feeling like they have no option but to leave.

Take a look at who you’re hiring. Don’t treat an in-house agency in exactly the same way you would a traditional agency. Often, in-house agencies can offer perks that smaller, traditional agencies can’t, such as more flexible working, new career opportunities, and other perks that can come with working for larger businesses. These can be attractive prospects for the right kind of talent, if you know how to pitch it.

Are there any alternative solutions?

The truth is that in-house agencies won’t necessarily work for everyone. But, there are some solutions that offer a hybrid between traditional agencies and in-house. For example, some agencies such as Oliver and Hogarth have business models that involve implanting their teams directly into the client’s business. This means also taking on the responsibility of hiring and retaining people, as well as establishing the operating model.

Mainstream agency M&C Saatchi also recently established their own in-house offer called Micro Agency, the aim of which is to design and build bespoke in-house operations for their clients.

So, it’s clear that the in-house agency model is gaining in popularity. If done right, it can have many benefits for businesses who need the services of a creative agency but want to retain the perks of having them in-house.

To discuss how your in-house agency can become more effective, please don’t hesitate to get in touch today.

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