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Winning the In-House Battle

In-house marketing team vs outsourced new business development

The second reality check in our series, based on our latest report data, focuses on in-housing and the belief that it’s on the rise with little that can be done about it.

Read the first post here: When “The Market” Becomes a Crutch.

Reality Check #2: In-Housing Isn’t Dead But It Is Smaller

We see a major opportunity for marketing and other professional services firms—particularly agencies—to reclaim work that clients have brought in-house.

In the agency world, major marketers in 2025 made the move to remove or reduce in-housing, like Keurig Dr. Pepper, PepsiCo, Suntory Global Spirits, and Expedia.

 

Structural Pressures Are Reversing the In-House Trend

While the headlines we see these days talk mostly about bigger marketing organizations making these changes, we expect this to trickle down to mid-tier and smaller marketers for a few reasons:

  • AI Resource Gap: Many in-house teams have struggled to keep pace with AI-powered content production. In some recent studies, approximately 61% of external agencies utilized generative AI in 2025, compared to only 17% of in-house agencies, making outsourcing more cost-effective for high-scale, Ai-driven campaigns.
  • Financial Strain: Economic uncertainty has placed mounting pressure on internal shops, leading CMOs to prioritize variable costs through external agencies over fixed internal overhead.
  • Need for Specialization: Brands are increasingly turning to agencies for complex, niche functions such as creator marketing, social media intelligence, and high-end performance media that are difficult to maintain at scale internally.

In our most recent survey, 65% of client firms said that at least 26% of their marketing work is managed by an in-house team.

While this seems like a large amount of work handled in-house, this represents a significant drop relative to 2024 (92%).

 

Interestingly, the dramatic decrease in the amount of work managed by in-house teams, as reported by clients, did not translate over to marketing and other professional service firms when reporting on the number of their clients taking work in-house.

Marketing and other professional services firms report that 60% of their clients now have some form of in-house capability—up sharply from 40% last year.

While this increase appears dramatic, it’s less concerning because the figure reflects the percentage of clients, not the share of work brought in-house.

More client firms might be bringing work in-house, but the absolute amount of work seems to be on the decline.

(Check out more helpful marketer and agency insights in our 2026 New Year Outlook Survey Report here.)

So…what does this mean for marketing agencies?

Here are several steps you can take to improve your chances of winning back in-house work:

Showcase what your clients can’t or won’t do.

– Digital, media, SEO, e-commerce

Talk the financial flexibility your agency can deliver.

 – Consider alternate pricing/relationship models

Introduce clients to services you offer but they’re not taking advantage of.

– Incentivize your team to drive organic growth

Share the efficiencies you’ve created with AI.

– Talk what’s important to them (e.g. speed to market, cost efficiencies, foundational use of AI to better content/idea creation process)

At the end of the day, it’s all going to come down to the financial strain that in-house firms put on companies (causing them to want to look outside) and the realization that their internal teams are only so good.

Sure they might be great sales collateral and in-store signage makers, but can they see the forest beyond the trees and think and act strategically and technically to the same level of marketing service firms.

I say the answer is a big ole’ “NO!”.

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