Reports & Guides

New report reveals continued growth of IHAs against tighter marketing budgets

External Input

“It is perhaps not surprising that 95% of companies with in-house marketing activity also still work with at least one external agency” – David Pritchard, Managing Director of We Are Amnet

Global creative production studio We Are Amnet has published the 2022 “The State of the Industry: Producing Creative Content Now and in The Future” report, based on a number of recent surveys including Gartner, ANA, WFA/Observatory International, Forbes and Statista. The findings highlight the recent rise in both the number of brands and corporates bringing marketing activity in-house, as well as the type of work being entrusted to those in-house agencies, which shows no sign of slowing down. 

The report also shows that in-house talent is now trusted to produce everything from content marketing, social media campaigns and creative strategy to analytics and even media strategy.

Among the reasons given by brands for considering the switch include the belief that it will lower costs, provide better brand knowledge and greater dedication on the part of the creative staff, faster response times and greater agility than outsourced agencies. The reality of course depends on the agency, and none of that means that there is now no place for external agencies whatsoever – 95% of companies with in-house marketing activity, according to an ANA survey, also still work with external agencies. 

Key Findings

The key areas the report looks at are: 

• What role external agencies still play?
• The challenges of producing work in-house
• How do IHAs demonstrate their value against the backdrop of lower marketing budgets?
• Why are brands increasingly shifting the production of content marketing in-house?

The report highlights that no longer do organisations entrust only the repetitive, high-volume, quick turnover, ‘easy’ projects to in-house agencies. In fact, the We Are Amnet 2022 report highlights an ANA survey, that said when asked which services their in-house facilities provide, 76% of respondents of those surveyed, reported that they were using in-house agencies for original creative work, while 52% used inhouse talent to handle their brand or corporate platform. Only 12% reported no strategic work was undertaken in-house, a downward trend that continues as companies trust in-house expertise more and more. 

In addition, the ANA survey also shows that there has been an explosion in specialist services handled in-house. In the five years between 2013 and 2018, the amount of content marketing so-entrusted more than doubled to 75%, while in-house data and analytics are also on the rise, to 59% in 2018. 

By 2020, We Are Amnet’s findings reveal that according to the WFA/Observatory International trends report, 94% of those surveyed report in-house creative capabilities for digital media, while 50% report having a creative studio at the centre of operations, a sign of the key role the in-house agency now plays. This means that no longer is the creative department simply an off-shoot of many brands’ corporate bodies, bolted on as an after-thought in an effort to save money. 

There are clear indications that creative strategy now goes hand-in-hand with overall business strategy. Indeed, when asked in 2021 what type of activities are being moved in-house, the top responses from a recent Gartner report, which surveyed CMOs was:
1. Brand strategy
2. Innovation & technology
3. Marketing strategy development

The We Are Amnet report again points to an ANA survey which highlights the percentage of agencies that have moved work from outside to in-house had hit 70% as long ago as 2018, with 42% saying that included creative work, and 46% saying it included creative services for digital media. 

However, in Gartner’s own view of the role of in-housing was still rather nuanced, however; CMOs must balance their need for cost-efficient internal resources with the scale and experience that strategic partners such as agencies provide. Gartner’s equivocal view is partly backed up by the fact that external agencies are clearly still viewed as having a role to play, albeit with parameters that have been redefined somewhat since their heyday.

From just 42% in 2008, according to the ANA survey, the number of organisations with in-house capabilities rose to 78% ten years later, with head counts rising even during the pandemic of 2020–21, at least in mid-sized and larger teams.

Falling marketing budgets

Moreover, the task of all creative agencies, in-house or external, has become tougher during and after the pandemic. The Gartner report states that marketing budgets have fallen to 6.4% of overall spend in 2021, the lowest in history and a drop from 11% last year.

The recent rise in both the number of brands and corporates bringing marketing activity in-house, and the type of work being entrusted to those in-house agencies, shows no signs of slowing down. In-house talent is now trusted to produce everything from content marketing, social media campaigns and creative strategy to analytics and even media strategy.

We Are Amnet’s report summarises that, amongst the reasons given by brands for considering the switch, includes the belief that it will lower costs, provide better brand knowledge and greater dedication on the part of the creative staff, faster response times and greater agility than outsourced agencies. The reality of course depends on the agency, and none of that means that there is now no place for external agencies whatsoever – 95% of companies with in-house marketing activity also still work with an external agency.

It continues to explain that, although many report that the biggest challenges they face in producing work in-house are not related to quality, but instead to managing growth. Despite those challenges, most brands report satisfaction with the outcome of the decision, indicating that overall, the trend toward in-housing is here to stay. And their target audiences, increasingly immune to the hard sell, demand personalised content if they’re to remain engaged.

Content marketing trends for 2022

Furthermore, the We Are Amnet 2022 report highlights that according to Statista, content marketing revenue has now surpassed $42 billion (£30.7 billion).

The most common functions that brands are planning to bring in-house in future relate to the increasing digitisation of the sector as a whole, and reflect the post-COVID ‘new normal’. Indeed, the 2022 report highlights a recent Forbes article, which said of the pandemic that, “Organisations with a solid digital first strategy have survived and thrived, while those who haven’t suffered and were ultimately wiped out”. 

At the same time, Bannerflow’s state of in-housing report points to increased decoupling of what have hitherto been highly specialised skills: 40% plan to bring AI functions in house, 38% augmented reality, while it’s 33% for the critical role of content creation. 

From analysing that same aforementioned Forbes report, it becomes clear that brands recognise the need to keep up with the increasing pace of technological development. Perhaps linked to the numbers of specialist digital services above, 34% also reported that they’re using digital transformation agencies on a regular, monthly basis. The use of specialist consultancy firms, taking their clients hand-in-hand through major operational, organisational and even cultural changes, is increasingly the norm. 

The recent enforced trend of remote working has demonstrated the benefits of the model to both employers and employees, and that trend is here to stay. New-found confidence in remote work has seen a rise in offshoring which will continue into 2022 and likely beyond. 

On a broader level, content marketing trends for 2022 and beyond suggest: 

• An increased focus on customer retention in content marketing messages. 
• A rise in visual storytelling through Augmented Reality, with over 90 million users of AR in 2021 already. 
• Increased use of AI in data analysis and customer behaviour prediction, with a concomitant increase in data advised content. 
• Huge growth in podcasts, with over 48 million episodes already being produced in 2021. 
• SEO-friendly content marketing. 
• Documented content marketing strategies, with defined plans outlining tactics. 
• Specialised content directed at the particular needs of customers, placing brands as industry experts and thought leaders. 
• Voice searching and purchases will continue to increase in popularity, with marketers incorporating it into their campaigns.

Who is We Are Amnet?

We Are Amnet is a privately owned business founded in 2000 with over 1,200 employees, delivering unmatched creative production services across the globe. The company has pioneered what they call the Smartshoring model, as companies are coming under increasing pressure to deliver greater brand awareness and market performance with consistent content and effective campaign management, for a reduced budget.

David Pritchard, Managing Director of We Are Amnet comments, “It is perhaps not surprising that 95% of companies with in-house marketing activity also still work with at least one external agency. There is a need for external input from specialised agencies who can provide expertise not already in-house and offshore providers who can support the peaks and troughs, provide value and increase rates of productivity.” 

“It’s clear from the statistics that while cost and speed to market are important, they are no longer the most important factor for in-housing. Quality is now number one – consumers are becoming more sophisticated and expect a higher level of personalization of their content and judge a brand on the quality of the advertising they put out there.” 

“The pandemic has accelerated the rise of digital marketing, with purely digital channels accounting for 72.2% of marketing budget in 2020. This isn’t a trend we expect to disappear, with the pandemic still looming large and consumers now used to a digital first approach to shopping, entertainment and communication.”

“Home working has now become the norm for many in-house agencies and this, along with an increase in decoupling services has increased the confidence in offshoring. With in-house agencies not solely relying on their in-house team but bringing in agencies and offshore production facilities into the mix as well.”