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UK advertisers increasingly favouring in-house agencies, says ISBA report

By John McCarthy | Media editor

ISBA - the voice of British Advertisers

|

in-house article

March 22, 2017 | 4 min read

Advertisers often have to buffer their capabilities with external ad agencies, keeping a handful on retainer to properly service their ad strategies – but this dynamic is weakening according to a report from ISBA, marketing group Oliver and market research consultancy Future Thinking.

62% of advertisers are instead looking to pin down stronger relationships with fewer suppliers as the move towards on-site and in-house solutions – this could favour agencies capable of delivering a wider range of services.

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Furthermore, just under half of brands now have, or are considering establishing, an on-site (45%) or in-house (44%) capability.

ISBA said this is being driven by the need for closer collaboration, data confidentiality and as a means of easier comms – with over two thirds ((68%) frustrated with how long it takes for agencies to deliver briefs or make decisions.

Advertisers keen on an on-site agency were cited the following factors; desire for speed and agility (86%), improved cost efficiencies (68%), collaboration (64%), and operational control (54%), institutional knowledge (21%) and strategic capabilities (21%).

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Meanwhile, for in-house, respondents cited improved brand expertise (61%), collaboration (52%), operational control (55%), and creative expertise (33%).

Debbie Morrison, director of consultancy and best practice at ISBA said that agility was becoming an increasingly important trait in the agency/advertiser relationship. “Adapting to the new demands that marketers have should be a key priority for agencies as they encounter an increasingly competitive market.”

Sharon Whale, chief executive of Oliver UK, added: “Amid increasing demand for closer collaboration, faster turnaround and more effective integration of the agency into a company’s processes, it’s clear now that the traditional external agency model cannot meet all of these needs. Having a unique model of working on-site, which enables you to get to know the ins and outs of the company, is becoming ever more valuable as marketers expectations continue to grow.”

The trend has been set by with brands like Specsavers, Coca-Cola, BBC or 4 Creative all holding their own against work from external agencies.

The study canvassed 85 senior ISBA members over a two-month period between December 2016 and February 2017.

The numbers directly support Olivers' business model - which is to help brands set up in house agencies. It recently broadened the services it can offer to clients with the introduction of a new media division which will focus on ensuring that campaign media planning is based on real-time data insight.

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