In-House

The rise of the UK in-house agency

The Norm

Stateside, the IHA experiment is over. They are not only the norm nowadays, but are fast becoming the epicentre of all marketing output

The phenomenon of the in-house agency (IHA), where brands eschew any exclusive relationship with external agencies in favour of bringing creative skills in-house (and therefore closer to the brand itself), has up to now been mostly associated with forward-looking US businesses.

According to the 2020 IHAF Digital Maturity Marketing Report, in partnership with Forrester Research, 75% of US corporations reported having an in-house agency. What statistics exist for their UK counterparts show at best that a mere 20% had made the move (and note, I’m not talking about centralised ‘document services’ departments here).

But time waits for no brand, and the drivers for their success in the States are the same everywhere else, and they are fast gaining popularity on my home turf in the UK.

Where are we (at)? 

A decade ago, amid a deep recession in the US, businesses were cutting back on external services, making cost-efficiency a priority. This was one of the sparks that ignited the IHA revolution. Once started, and with the established agency institutions already rocked by trust-eroding scandals, plus the need for more responsive and dynamic campaigns, they really came into their own. With UK businesses hit by the COVID-19 economic crisis, it will be interesting to see if more brands have a similar need to scrutinise overspending with external agencies, instead opting to build cost- and brand-effective IHAs.

And indeed the demand for the same immediacy in the market is there too. It doesn’t hurt that, in the aftermath of the pandemic, there is a talented pool of marketers, creatives, digital experts and designers looking for their next move. Many are also looking perhaps for a change in pace.

So UK and US IHAs are the same, right?

Well, similar, but different! I’ve spent a lot of time in both the US and UK over the past three decades, in and around the graphics communication and marketing and agency worlds.

Here there have always been US/UK differences. For example, the decoupled print management model in the UK, which resulted in the rise of print management companies in the 80s and 90s, simply didn’t happen in the same way in the US.

When it comes to our American cousins it’s always felt to me like we follow each other – but we do not copy exactly. Things are just ‘slightly different’. As Churchill said, US and UK are “two nations divided by a common language” and it’s all in the nuance.

Remember The Office – the UK’s and America’s favourite group of office workers? The popular three-series comedy starring Ricky Gervais was a UK cultural phenomenon and was adapted in the US, with similar characters over nine seasons. It became a US cultural phenomenon too, but for different reasons.

If you’ve ever been into (Walmart-owned) Asda and then visited an actual Walmart in the US, you can experience a similar ‘cognitive dissonance’ in the aisles too!

So what does all this have to do with the IHA? Well, it does make me wonder how UK IHAs will differ, compared to those already established in the US of A.

So what are the differences and why?

This is where things get anecdotal, as the full research just isn’t there yet as it’s early days. While the UK has some spectacular examples of IHA success (let’s just name Specsavers, British Red Cross and PwC for starters) those new to the game are showing slight differences, not all negative. Among them are:

• Maintaining ongoing relationships with traditional agencies. M&S for example and BBC Creative both work closely with creative agencies, but they drive the whole process on behalf of marketing, from concept to execution. Their IHA appears to be small teams of world-class creatives who orchestrate external talent as needed;
• On the other hand there is some evidence of reluctance to recognise the design racehorses already within the creative department, assuming that they’re just layout ponies. There is still so much untapped potential already within these companies if only they will be heard.

Times are changing

Stateside, the IHA experiment is over. They are not only the norm nowadays, but are fast becoming the epicentre of all marketing output, and it will be interesting to see how they develop here. The cost issue looms large now, as UK Marketing Directors and CMOs are under pressure to prove the ROI on their efforts, something that complex and less-than-transparent agency fees make it difficult to achieve.

But I’ve not doubt, things will be done differently!

About the author: 

Robert Berkeley is the CEO of Express KCS.

You can find more information about Express KCS here