More staff, more ambition – in-house agencies on the rise
A new report suggests that in-house creative agencies are on the march as headcount and ambitions grow.
The In-House Agency Leaders Club (IHALC) just published the second edition of its In-House Agency Benchmarking Survey.
With input from in-house leaders at 80 organisations across the UK and EMEA, it’s not a massive sample size. But the findings reflect a general sense in the design world that in-house teams are taking on more responsibilities.
Here are some of the main takeaways from the report:
Headcount is growing
In-house agencies are growing, with 52% of teams having increased headcount in the past 12 months. 40% expect headcount to grow again in the next year, while 51% think numbers will stay the same.
There is a feeling among the respondents that hiring has become easier as the attention on, understanding of, and respect for in-house creative teams has increased. One leader spoke of the “new-found credibility thanks to larger IHAs such as Specsavers, Sips & Bites and The Kitchen winning awards and showcasing what good looks like.
“The ripple effect from these bigger IHAs successfully competing against traditional agencies has been immense.”
That said, there are frustrations with a lack of “agility” around hiring, caused by “lengthy HR/onboarding processes and finance systems “not designed for creative work.”
Nearly half of teams find it hard to bring in freelancers, although the direction of travel compared to the last survey in 2023 shows some progress. Two years ago, 43% of teams had some difficulty bringing in freelancers and 14% had great difficulty – this year those numbers are 35% and 8%.
Graphic design core in-house skill
Graphic design is the most common in-house role, with 95% of teams having this capability. This challenges the narrative around the World Economic Forum’s Future of Jobs Report, which found employers see graphic design as one of the roles most at risk from the rise of AI.
After graphic design, the most common roles are creative direction (87%), video/photo editing (83%) and digital design (82%).
While the vast majority of teams have a creative director (82%), only 32% have a creative operations director, and just 11% have a strategy director. About one in four has an executive creative director, or chief creative officer.
About 37% in-house of teams have a clients services function, but the report notes this is “a point of debate,” with some leaders concerned this role, “ creates too many barriers between stakeholders and creatives in-house.”
In-house teams have “lead agency” designs
IHALC has a four-tier model to rate the kind of work an in-house team does, from production studio up to lead agency.
44% of in-house teams say their future ambition is to operate as a lead agency. While this is less than half, it is double the percentage who stated that ambition in 2023.
And 65% of leaders say they expect the team to do more “Tier 1” creative work in the next 12 months. This is defined as “work that requires creative origination from brief” – the sorts of projects that would form part of that “lead agency” role.
“For me, the age of the in-house agency as ticket-solving pixel pusher is a thing of the past – this is the era of in-house agency as creative powerhouse,” says Hugo Timm, creative director of Frontify, which supported this year’s survey.
“Technology is closing the gap between what small in-house teams can do versus large external agencies. In 2025 there are fewer limits than ever on how far we can push the creative and conceptual conversation.”
And increasingly, he believes, in-house teams who are immersed in a company’s culture and aligned with its objectives, “are best placed to collaborate effectively with stakeholders.”
This is ushering in a new era, Timm says, of in-house teams becoming, “do-it-all creative agencies…equipped to elevate creative excellence from within.”
Changing relationship with external teams
This changing ambition is having a knock-on effect on in-house teams’ relationship with external agencies.
When asked whether they expect to expand their remit or outsource more work to external partners over the next few years, 66% said they expected to take more work in-house.
The most-common external partners are media agencies (75%) and creative ad agencies (70%). Just under half (45%) said they work with brand or design consultancies.
The main reason an in-house team seeks out an external agency is to get expertise in a specific sector (60%). This is followed by access to skills/talent (60%) and to get “a fresh perspective” (50%).
It’s worth noting both of these numbers have dropped noticeably from the 2023 survey, when 77% said they looked for external skills/talent from agencies, and 65% needed a fresh perspective.
The report concludes that the future will be built around “a hybrid partnership with partners – not a binary choice between in-house and external.”
But it also notes some tensions around an “us vs them” mentality, frustrations with external agencies presenting impractical ideas, and even battle for respect within their own businesses.
The report notes that in-house agencies, “continue to face the challenge of being seen as the poor alternative to external agencies, requiring constant PR to win over internal stakeholders who may still believe external is best.”
AI not yet everything
For most in-house teams, understanding AI remains a work-in-progress. Only 27% of in-house teams have an AI strategy in place, and the vast majority (82%) rank themselves in the middle of the Gartner AI maturity model.
The main challenges holding back AI adoption were listed as IP and copyright risks, finding the right tools, and navigating internal approval processes.
Barriers and challenges
More than a third (37%) of in-house teams don’t track the time spent on – or the costs associated with – internal projects. Interestingly this is up from 28% in 2023.
One in four (25%) say they don’t agree time/costs before starting the work. This might reflect the ad hoc culture of the relationship between in-house teams and their counterparts – 19% said “lack of time and forward-planning” was their biggest barrier to making better creative work.
But there is also a clear sense that in-house teams cannot operate in the same way as an external agency would.
“‘Lifting and shifting an external agency model into a business rarely works,” the report expplains. “In-house teams have to respond to the culture and environment of their organisation and shape themselves accordingly.
“For some, even the term ‘agency’ carries unhelpful connotations, while others find it a useful shorthand to reset expectations and perceptions.”
The number one thing in-house teams say prevents them from making better work will be very familiar to external agencies too – 25% say it’s the quality of the brief.