In-Housing Won't Fix What You Couldn't See

I've sat on both sides of this. I've been the client paying the agency and wondering what half the invoice was actually buying. I've been on the agency side, watching a brand pull the work in-house and call it a fix. So when I see the in-housing wave being sold as the cure for a broken agency relationship, I know what's coming. It doesn't fix the thing that was actually broken. It just moves the blind spot closer to home.

Here's my position, and you can disagree with it. The problem was never where the work happened or who held the pen. The problem was that the business couldn't tell what any of the work was worth. Bringing it inside doesn't change that. If anything it makes it harder, because now the team doing the work is the team grading it.

This isn't a few outliers. The numbers are stark. In the US, 82% of marketers now run an in-house agency, up from 58% in 2013 and 42% in 2008, and the prediction is it peaks somewhere around 85 to 90% (ANA). The same research found 88% of companies increased their in-house workload. The most-cited reason people give for doing it is cost efficiency (Marketing Dive).

Australia is mid-churn. CommBank ended a 14-year creative relationship. Australia Post moved its media off Wavemaker after seven years. Asahi appointed a new media agency. Relationships that took a decade to build are getting torn up in a quarter.

The marquee moves keep landing. 7-Eleven Australia just launched its own in-house agency, "The Corner Shop", led by Hugh Miller, who built Movember's in-house studio. It handles "Tier 2, 3 and 4" work while Clemenger BBDO keeps the big brand platforms (Mi-3). First campaign out the door is a coffee platform, "Expect Nothing. Get Everything." (B&T). At the other end of the scale, Coca-Cola has put its global media account, thought to be worth around AU$7.5 billion, into review, WPP versus Publicis, run by a consultant (B&T).

So you've got the whole market in motion. Some pulling it in. Some shopping it around. All of them telling the same story: the old way wasn't working, this is the fix.

Let me be clear about something. I'm not anti-agency and I'm not anti-in-house. I've done good work on both sides and I've watched both sides waste money. I'm against doing either one blind.

When a client churns an agency, the reason given is almost always some version of "we weren't getting value." Fair enough. But ask the next question. How did you know? In most cases the honest answer is they didn't. They had a feeling. The relationship went cold, the reports stopped landing, the agency kept saying things were going well and the business had no independent way to check.

That's the real problem. Not the agency. The agency might have been bleeding half the budget out the back, or it might have been the only thing keeping the lights on, and the business genuinely could not tell which. You were paying someone to bring a friend, and you never worked out whether the friend was any good.

When you can't see what's working, every decision becomes a vibe. You churn the agency because the vibe went sour. You bring it in-house because the new vibe feels more in control. Neither move touches the actual gap, which is that you never owned your numbers in the first place.

Here's where in-housing makes it worse, not better.

When the work was external, you at least had a natural line between the people doing it and the people paying for it. That line is friction, and friction is useful. It forces a question. Is this working? Show me.

Pull it all inside and that line vanishes. Now the team running the campaigns is the same team reporting on the campaigns. They're grading their own homework. Of course the marks come back glowing, because the attractors will always say they're doing a good job. They're incentivised to. That's not a character flaw, it's just human. You don't hand someone the red pen on their own exam and expect a fail.

This is the part the cost-efficiency story skips. Yes, you save the agency margin. But you've quietly removed the one bit of distance that made the work checkable. You haven't bought clarity. You've bought a closed loop that feeds itself.

The data backs the worry. That same ANA research found only 59% of companies handle their data and marketing analytics in-house (ANA). So the majority are pulling the doing inside while the measuring stays somewhere else, or nowhere at all. You've internalised the team that makes the work and left the team that proves its worth on the outside. That's exactly backwards.

This isn't theory. We've scored the marketing function of Australian businesses across the whole spread, big and small, and the pattern shows up again and again. The weakest dimension is almost never the creative or the channels. It's data and tracking. The plumbing that tells you what's earning value.

Businesses are confident about what they make and how they make it. Ask them what each marketing dollar returns and the room goes quiet. They notice things going wrong when it hits the revenue line, not before. That's flying blind, and it doesn't matter one bit whether the person flying blind sits in your office or in an agency's.

So when a business in-houses to "get control", I want to know one thing. Did you fix the tracking, or did you just move the cockpit? Because if the dials still don't work, you've changed the seat, not the visibility.

If you're staring down this decision, don't start with the org chart. Start with the scoreboard.

First, own your numbers before you move a single person. Do you know what you make? Do you know what you spend? Can you tell, channel by channel, what's pulling weight and what's just there? If you can't answer that today, in-housing won't hand it to you. It'll bury it deeper.

Second, build the line back in. If you do bring work inside, keep the measuring honest by keeping it separate from the doing. The people grading the work cannot be the people who made it. That can be a dashboard you trust, a finance partner who asks hard questions or an outside check. It just can't be the same hands that hold the pen.

Third, run the binary test on everything. Turn a thing off. If revenue drops, you've learned it was earning value. If nothing moves, ask why you were paying for it. That test works whether the thing is an agency retainer or your shiny new in-house team. It doesn't care who owns the work. It only cares whether the work earns its place.

In-house or agency was never the real question. The real question is whether you can tell who's earning value and who isn't, wherever the work sits. Get that right and either model can win. Get it wrong and you'll churn your way around the same blind spot for years, paying a little less each time and seeing exactly as little.

The brands that come out of this wave ahead won't be the ones who pulled the work in fastest. They'll be the ones who could finally read the board.