Digital Marketing Matures In House
IHAF recently released its annual benchmarking report, Debunking the In-House Myth. Fielded in partnership with Forrester Research, the study focuses on the degree to which in-house agencies are involved with digital marketing—assessing the digital marketing maturity of in-house teams today.
The findings show that 89% of internal agencies develop and/or execute digital marketing assets on behalf of their respective corporations. And, while there continues to be a mix of internal and external agencies involved, in-house resources are responsible for the bulk of the work—with an approximate 75/25 split between the insourcing/outsourcing of social media, digital strategy and planning, digital creative development and digital content production.
The exception is media. A large percentage continues to be handled by external agencies, with 46% of digital media planning and buying insourced and 47% outsourced, and 33% of programmatic media insourced and 43 percent outsourced.
“The sheer scale of insourced digital marketing functions compared to outsourced functions illustrates how in-house agencies have grown in both popularity and digital marketing maturity over the past decade,” says principal analyst at Forrester Research, Jay Pattisall. “Equally significant is the high-level integration of digital and offline teams. In-house agencies can fully deliver on CMOs’ end-to-end digital campaign needs.”
Our study reveals that 73% of in-house agencies are comprised of diversified talent, with combined teams producing both print and digital output—up 16% from IHAF’s 2014 digital marketing study. “It’s been six years since we fielded a survey focused on digital marketing,” notes IHAF director Emily Foster. “Based on the advancements we’ve seen, including capabilities and creative quality, it was time to take a look at how digital marketing within the in-house community has evolved.”
Foster goes on to explain that in the six years since IHAF’s last digital marketing report, the number of digital projects produced by internal teams has more than doubled. In 2014, fewer than half of in-house agencies produced 100 or more digital projects annually. Today, over three-quarters (77%) produce 100+ digital projects per year with nearly half (48%) producing 500 or more.
When it comes to measurement, 83% of corporate marketers and in-house agencies responding to the IHAF survey indicate that their companies measure the in-market performance of their digital efforts. Leading metrics include website traffic (70%), conversion rates (68%) and ad engagement (61%). KPIs are also used to guide digital marketing in house. In fact, as much as 89% of in-house agencies use KPIs to inform digital functions like marketing strategy, creative development, execution and production, optimization, and measurement and reporting.
While the data indicate that in-house agencies have risen to meet the demands of digital marketing, our study also found growth opportunities specific to talent, tools and technology. Less than one-third of companies routinely use customer journey maps to guide digital strategy, and only 39% report regular collaboration with external providers to enhance digital marketing competencies internally.
To enable them to better support their companies’ digital marketing needs, roughly half of in-house agencies are improving their project workflow processes, increasing the use of tools and technology, training current team members, and increasing the use of data and insights. When asked if in-house agencies have access to the latest digital marketing tools and technology, just 19% of survey respondents fully agree that they do.
“Effective digital marketing extends beyond display ads, social posts, site traffic and SEO rankings. It relies on an underpinning of marketing technology to create, monitor, manage and optimize compelling customer experiences,” says in-house expert and organizational consultant Marta Stiglin. “If the next frontier for in-house agencies includes martech and adtech, we need to ensure that the technologists required to get there are on the team. It’s not enough for Corporate IT to come and go. In-house agencies need a technology plan and dedicated talent to support front-end and back-end marketing systems.”
There are ample growth opportunities in house when it comes to digital marketing. That’s not to diminish the degree to which internal agencies have proven their worth as digital creators and communicators. However, in order to climb further on the digital-maturity scale, in-house agencies must be deliberate about where and how they continue to evolve, particularly given the speed at which digital marketing evolves and the resources it requires.
Our study reveals that 75% of corporations have an in-house agency—a 4% increase since our 2019 study. Of those, 47% support corporations with $1 billion or more in annual revenue, with 41% focused on business-to-business marketing, 18% focused on business-to-consumer marketing, and 39% doing both.
In total, 288 companies participated in IHAF’s year-end study, spanning 30 different industries including education, financial services, food and beverage, healthcare, insurance, IT solutions, manufacturing, nonprofit, software and more. Respondents included in-house agency leaders, client-side marketers and external agencies/vendor partners.
The full IHAF Digital Marketing Maturity Report, Debunking the In-House Myth, is available for members to download. Join IHAF Director Emily Foster, global agency analyst Jay Pattisall and in-house agency strategist Marta Stiglin to discuss the study’s findings and implications in our March 25 webinar.
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