Dive Brief:

• More than 72 % of corporations now have an in-house agency and that number continues to grow, according to a new report from In-House Agency Forum (IHAF), an association for internal agencies, shared with Marketing Dive. However, many of these internal creative teams lack the autonomy needed for businesses to fully benefit from their skills and institutional knowledge
• Internal agencies are challenged by the fact that they don't operate autonomously with regard to marketing communications and creative strategy, IHAF found. Only 33% of those surveyed said they have an ample amount of autonomy in marketing communications and creative strategy. By comparison, 55% report having a high degree of autonomy with creative execution. Client diligence is also an issue, with 54% of marketers using less planning around project initiation with their internal agencies as compared to external agencies. 
• Just over half of respondents said their in-house agency isn't adequately funded, and 79% said that hiring more specialty talent related to video, digital, social media and analytics is necessary. IHAF's report, conducted with Forrester Research, is based on responses from 368 companies. 

Dive Insight:

While in-house agencies continue to grow, IHAF's research suggests there is a disconnect between their emergence and these departments fully realizing their potential. 

The research found that 72% of corporations have an in-house agency, up 12.5% year-over-year. However, these agencies often lack the support that an external agency would get. In part, this comes from corporate marketing teams leaning heavily on work that is produced internally but without the same amount of preparation going into creative collaborations with in-house teams compared to external agencies.​

Internal alignment is another issue plaguing internal agencies, as 65% of these teams have been reorganized in the last two years. Though 78% said they have a clear mission, there is often a disconnect with the broader marketing team. Forty-two percent of corporate marketers admitted they were unaware of their in-house agency's mission.

"While in-house agencies may be enabled by institutional knowledge, proximity and creative prowess, they are simultaneously stymied by operating practices and decision-making hierarchies that limit their ability to contribute more fully," said Marta Stiglin, an in-house organizational consultant, in a statement.

The IHAF findings seem to support separate research published last year by the Association of National Advertisers (ANA), with the help of Boston Consulting Group and Reed Smith, the ANA's outside legal counsel. The report, "Managing In-House Agency Creative," found that 63% of in-house agencies found challenges in keeping internal talent energized. It also revealed that 44% of in-house agencies struggle with attracting top-tier talent, and another 37% said they experience difficulties applying key marketing processes. 

As brands invest in these departments, a growing body of research suggests they will be better served spending time trying to create a vision and cohesion between their internal agency and marketing divisions. If in-house agencies have the reputation for not being taken as seriously as external agencies, and if they lack vision and creative autonomy, then they will continue to face obstacles to success.