In-housing continues to rise in popularity, but agencies can still expect growth

Use of in-housing is set to grow, with the vast majority (92%) of chief marketing officers from around the world saying they plan to maintain or increase digital and programmatic capabilities internally, according to Dentsu Aegis Network.

Marketers' obsession with social media advertising and direct-to-platform relationships shows no sign of abating – potentially at a cost for agencies – with half (50%) of CMOs planning to increase direct spending with the likes of Facebook, Google, Tencent and WeChat over the next two to three years.

The findings are the result of Dentsu Aegis Network's CMO Survey 2019, which canvassed 1,000 CMOs and senior marketers across 10 countries.

It emphatically concluded that in-housing is set to be in vogue for some time. Even so, 40% of respondents said they plan to increase spend with agencies, while just 6% expect to do less work with them.

Of those surveyed, 58% said they are likely to in-house digital and programmatic in the next two to three years. Breaking down further, this intention was most pronounced across the energy (69%), technology (67%) and telecoms (64%) categories. Conversely, marketing bosses in the retail and finance sectors are least likely to consider in-housing.

Agencies can expect to see strong fee growth from automotive and telecoms marketers, a respective 57% and 54% of whom plan to increase work with agencies. At the other end of the scale, 28% of pharmaceutical companies and 32% of media and entertainment brands are planning on bolstering agency spend.

The report also revealed that 79% of CMOs believe they must use digital technology not just to optimise their businesses but to transform them, with 80% saying they will need to take greater responsibility for product and service innovation in the next two to three years.

Nevertheless, in spite of such seemingly long-term considerations, nearly half of CMOs reported marketing strategies that planned ahead of no longer than two years, demonstrating a short-term outlook. This apparent myopia was compounded by the finding that 64% of marketing bosses expect to experience greater pressure from their boards and shareholders to provide short-term, demonstrable ROIs in the next two to three years.

The survey also asked respondents to forecast changes to their marketing budget in the last 12 months. While more than 80% of Chinese brands will spend more, nearly 65% of marketers in Japan expect to make do with less marketing investment. Australian brands are about equally split.

The report was compiled in conjunction with Kadence International. Marketers were pooled from across 10 countries (100 from each): Australia, China, France, Germany, Italy, Japan, Russia, Spain, the UK and the US.