For the past nine years, teams across the country have looked forward to seeing the results from Cella's annual benchmarking survey of in-house creative agencies. They rely on our In-House Creative Industry Report to help them validate strategies, shape their evolution and manage their operations more effectively. In short, they gain insights for keeping up with change - and for continuing to do what works best.
Our 2019 Report confirms that some aspects of in-house creative agencies have remained remarkably similar over the years. Others have ebbed and flowed, and some trends have spiked in recent times. Here are some highlights from our summary of findings.
What's holding steady and on the rise
Remaining steadily unchanged over the past five years are the agencies' corporate reporting structures, with 83% of teams rolling up into strategic divisions within their company. Chargeback models have also remained flat, with roughly a third of the teams (primarily large/mega groups) charging back for some or all of the services they provide. Brand knowledge and an insider's grasp of products/services consistently remain the top differentiators of the in-house team's value proposition.
Significantly, the 2019 survey responses underscored an ongoing industry-wide trend of establishing in-house teams. Along with that development, average team size has increased by 11% over the past five years, further validating this business model.
Some operational practices have been continuously rising, as well. Time tracking is a case in point; 13% more teams have adopted it. Hourly billable rates have crept upward to tip the scales at more than $81 per hour compared with the previous five-year average. Chargeback rates have increased slightly for key strategic services such as account/project management, creative direction and video producers. While the rates for video producers has risen, we also see a slight increase in the number of teams not charging for this service. A close eye will be kept on these categories, especially video, as the volumes of work for the offerings continue to expand.
Finally, one of the biggest changes we saw was a 26% increase in the use of a project management system, as eight out of ten teams report they now employ a tool to manage and track their projects.
With video traffic expected to comprise 82% of all IP traffic by 2022* the demand for in-house teams to provide this service will continue to grow. Today 70% of the survey respondents say their teams support video. The number of resources dedicated to this work is proportionate to team size with 57% of small/mid-sized teams devoting only one or two resources to supporting video. For large and mega teams with more resources, the number of people in more specialized video-related roles (e.g. producer, editor, video graphic designer) has doubled.
Marketers are increasingly looking to Agile methodologies to manage their work. A quarter of the in-house teams said they use Agile, and 64% believe that these practices will increase their productivity. The top barriers to widespread Agile adoption are a lack of experience with, and inconsistent use of, the associated practices. Interestingly, smaller teams use Agile for a greater percentage of their work. The industry at large anticipates this trend will continue, with over 60% of marketers planning to build Agile into their workflows in the coming year. We'll be tracking Agile usage in the coming months to confirm the expected growth in adoption. (Note: we recently published a whitepaper on Agile for in-house agencies that may be downloaded here.)
How will your teams evolve?
As teams rise to meet new services-related demands and changes in operational/business practices, staffing and training will become more critical. Yet today, over 70% of the leaders we surveyed indicate that they don't have enough time to develop their teams' skills, nor sufficient budgets for training. This is a major gap given that, as noted above, a lack of experience in methodologies like Agile poses a serious challenge to an agency's ability to evolve.
This year also saw a shift in the perception of the talent market, with fewer respondents believing there is enough available talent. Data from the U.S. Bureau of Labor Statistics validates the scarcity of creative professionals. The Bureau has reported low unemployment rates, especially among college-educated resources, which results in talent being "stolen" from other jobs and potentially longer lead times to fill key roles - more challenges to a team's ability to adapt and grow.
Perspectives from the field
Rounding out this year's report are five articles authored by creative industry leaders who provide further insight into some of the trends we're seeing.
Jarrett King, director, Coca-Cola Studios, specializes in the rehabilitation and transformation of in-house creative teams. Her article explores the possible leadership choices for in-house agencies and the type of individual best suited to successfully guide them.
The director of Creative Services at Becton Dickinson, Christine Molinaro, writes about how to manage remote and colocated teams, which in-house agencies typically rely on to promote collaboration among clients and creative team members.
Frank Buck, a manager with The Boeing Company Creative Studio, is responsible for all XR and 2D/3D renderings and animation that optimize the visualization of practically anything in the world of aviation. He shares how Boeing used AR/VR to create an immersive tour of aircraft.
Writing on the importance of partnering for mutual success, Matt Galemmo, a lead within the Cella organization at Merck Creative Studios, outlines five partnership principles for strengthening and benefitting from relationships with external agencies.
Cella Digital Media Lead Danny Rickard sheds light on how in-house agencies can build the right video team, addressing uncertainties about the types of talent needed, equipment requirements and processes that are essential for this offering.
You will find these articles and the full 2019 In-House Creative Industry Report at www.creativeindustryreport.com.
A note of thanks
We're grateful to the survey respondents who invested your time to provide us with such great insight into how your organizations are structured, the work you do and the challenges you face. We hope you find this year's report to be a valuable resource as you continue to shape and grow your teams.
*Cisco Visual Networking Index: Forecast and Trends, 2017-2022/November 2018