Will the in-housing trend pivot?

A new Ipsos trend report shows how the agency and client relationship is in constant flux.
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It’s a common refrain in the agency world: clients are increasingly in-housing their marketing activities, consultancies helping them do so are on the rise, and the pace of change across the industry is, at times, overwhelming.

New research from Ipsos shows that many marketers are indeed taking plenty of matters in-house, but, according to Ipsos Canada COO Steve Levy, the trend could be poised to change.

Ipsos issued its annual digital trends report at last week’s CMAideas executive event. Trend results were driven by responses from 4,000 professionals from both agencies and brands’ marketing departments. All respondents are members of the CMA.

Results showed that the reliance on agencies is not steadily decreasing, and that the relationship has always had its ups and downs. Between 2010 and 2017, there was a wavering number of marketing respondents who said their reliance on agencies had increased, dropping as low as 38% in 2013 and then sitting as high as 53% in 2016. In 2018, the number of respondents who said their reliance had increased was 41%. The number of marketers who said their reliance had decreased has always stayed relatively low, only going as high as 16% in 2017. Most respondents say they’ve stayed the same.

Ipsos’ results showed that marketers often bring certain (more consumer-facing) activities in-house, while increasingly tasking their agencies with emerging digital platforms.

For example, brands are overwhelmingly in-housing matters such as email marketing (80%), consumer-facing websites (72%), social media marketing (70%) and blogging/vlogging (67%). These activities make sense, said Levy, because they are more “mature” components, and considered “core and sensitive.” He pointed out that many of the activities that fall under the “core and sensitive” umbrella are most commonly in-housed by banks, insurance companies and telcos.

Results were slightly more even for branded content (55% in-house), SEO (53%), online video marketing (47%), mobile marketing (46%), digital signage (45%) and display advertising (43%).

Agencies were more dominant in digital buying activities including pay-per-click advertising (61% of brands say they leave this up to their agencies), working in the wearable tech space (66%), video syndication (67%), programmatic marketing (68%) and augmented reality (74%).

But Levy said that, after conducting these digital trend surveys for 12 years, he’s confident there will be more change on the horizon.

“Can the pendulum swing back?” Levy asked. “Yes, of course, it has before. It’s likely to again.”

In fact, Levy said, there may already be a sign of things pivoting back. From 2013 to 2017, an increasing number of marketing respondents agreed with the statement: “My senior management is actively involved in digital marketing plans” (43% agreed in 2013, and that number eventually rose to 55% in 2017). This year, the total has gone down to 46%, the lowest it had been since 2014. Additionally, 15% disagreed with the statement this year (higher than any previous total). An additional 39% were neutral.

Levy said he believes this boils down to the fact that CMO jobs are increasingly difficult, and thus they will continue to lean on agencies for their expertise – which may shift over the years, he emphasized – in areas that are evolving too rapidly.

For the past nine years, Ipsos has been asking marketers if they believe measuring ROI in the digital space is easy to do. While responses have fluctuated over the years, the most anyone has ever agreed with that statement is 30% (2017). This year, only 24% of respondents agreed with that statement. An equal amount disagreed, and 52% were neutral.

Vizeum CEO Adrian Capobianco spoke to MiC after the event and said that, as the marketer’s role becomes more complex, so does the agency’s.

“This is going to lead to flux,” he said. “We have these conversations every day, on how the pendulum swings. For me, clients taking capabilities that are part of the business in-house makes sense. These have become daily operational aspects of the client’s business. A website should be looked at as a company’s single-biggest store.”

He said the challenge with shaping agencies for the future is to ensure that the right talent is being attracted and maintained, in order to position themselves as experts – because clients are looking at media agencies less as bodies to handle operations and more as “a source of expertise.”

“From our perspective, we’re responsible for clients looking for the best way to invest their money,” he said. “It’s all about keeping up to speed on that.”

Read part one of Levy and Capobianco’s presentation here.