Should External Agencies Be Worried About In-House Agencies?

In-house agencies are having a moment. From articles to interviews to reports, there has been no shortage of debate and discussion around the rise of in-house agencies and what it means for the industry at large.

Pile and Company’s own In-House Agency Forum (IHAF) recently released its 2018 State-of-the-Industry Report, In-House Agencies Today. IHAF’s report finds that 64% of corporations have in-house agencies—an increase of 52% from a decade ago. And while cost efficiency and speed to market remain as hallmarks, the top two advantages of having an internal agency today are knowledge of the brand and knowledge of the business.

Findings like these have begged the question—Should external agencies be worried?

From our perspective, having managed agency reviews for over 30 years, there is room for everyone at the table. Savvy marketers now conduct holistic reviews of external and internal resources as part of any agency search or model assessment. And partnerships vary from multiple outside agencies to a mix of external and internal resources to full insourcing.

So rather than ask if external agencies should be worried, we’d suggest external and in-house agencies ask themselves—Are we adding value?

Clients want and, quite frankly, demand partners who support and address their specific business goals and challenges. Agencies—in or out—must know their offerings and how they meet a client’s objectives. Identify your capabilities and invest in the resources, talent and tools to stay current with or, better yet, ahead of the industry. Never rest on laurels or assume a client will hire you because your agency “type” is historically good at (insert discipline here).

Equally important is collaboration. Our work with clients along with IHAF’s recent field study reveal that internal agencies, client-side marketers, external agencies and outsource providers increasingly see in-house agencies as a complement rather than a threat to external shops. Working together, as opposed to being threatened by one another, is the future of sourcing.

Our advice to any agency is to do the work and do it well. Refuse to let the debate around external versus in-house distract you. Anyone focused on defending their position in the industry is arguably not focused on delivering value to their clients. Today, winning agencies provide the capabilities and services their clients need and embrace collaboration. Those agencies are winning inside and out.