Why AI is a gamechanger in the in-housing playbook

“Will we in-house more?” asks Dhiren Amin, chief customer officer at Income Insurance. “Yes, there are certainly a few more things that we can bring in-house.”

The Singapore-based insurer may have started its in-housing journey with channel-based communication, such as brochures and other collateral, but it has since moved to areas like data analysis and media planning. Income is by no means an outlier when it comes to in-housing.

Over the last decade, in-housing has become ubiquitous across APAC. Christopher Daguimol, corporate communications director at Singapore-headquartered fashion marketplace Zalora, says, “Our creative DNA is rooted in in-housing. Even if we strategically partner with agencies for tentpole campaigns, we never relinquish creative control.”

Smaller campaigns for Zalora that demand a nuanced understanding of its audience have always been created in-house.

While in-housing may seem like an obvious choice for a digital native firm, the practice is catching on even among companies that formerly relied on external partners. For instance, Godrej Consumer Products, one of India’s largest homegrown FMCG conglomerates, embraced in-housing in 2023. In Indonesia, in-house agencies are ubiquitous across categories as diverse as edtech (Runagguru), super apps (Gojek) and beauty and skincare (Paragon).

Iskandar Siva, group GM of creative content digital and brand experience at Paragon Corp, says, “We recognised the need for deeper brand immersion, agility, and seamless collaboration. Building in-house capabilities allows us to align creative, production, and digital innovation more closely with business objectives while fostering a culture of experimentation.”

Similar trends are evident in ANZ according to research conducted by Kantar and the In-House Agency Council (IHAC), a body representing the interests of in-house agencies. The penetration of in-housing in Australia stands at 78%, second only to the US.

A 2023 survey from the WFA concluded that 66% of brands have in-house agencies, with 21% actively considering the option. When it comes to scope of work, 70% had already moved strategic capabilities in-house and many planned to shift new tasks from external agencies over a three-year horizon. The specific areas earmarked for in-housing included digital production; offline production; data strategy; data management, and insight and analytic tasks. Other areas that were on the radar of marketers were online planning and buying of social media.

With a few exceptions, most in-housing today forms part of a hybrid model. However, there is ample evidence that an ever-expanding pie of business that used to be the domain of agencies is shifting in-house and that AI could play a pivotal role in accelerating the trend.

The impact of AI on in-housing

While the adoption of AI and Gen AI is the highest in North America, according to a study by Precedence Research at 41% and 37%, respectively, versus APAC at 22% and 24%, the region is on the fastest growth trajectory globally.

Citing a study commissioned by Google among marketers in the region to gauge their business readiness to integrate AI in marketing, Rika Sharma, head of APAC agency and partners at Google, said, “Overall, 65% of brands in APAC are what we call AI adopters—those who have successfully put their foundational AI capabilities to the test but have yet to tap into AI’s full potential. In APAC, 85% marketers are either in the planning or designing phase for AI implementation.”

AI has hastened the pivot towards in-housing and given teams more confidence about taking direct control over a wider array of services. Siva says, “AI is accelerating how we automate, personalise, and optimise creative outputs. At Paragon, we leverage AI for content          generation, consumer insights, and workflow automation. This allows us to bring more functions in-house, from predictive trend analysis to dynamic content creation, while ensuring that human creativity remains at the heart of strategic storytelling.”

Tech platforms have played a role in making in-game-changer-housing a more viable option, offering several AI-powered solutions for seamless ad creation and delivery, along with deep insights into the behaviour of users on the platform. Amin admits, “Tech platforms like Meta, Google and TikTok have all claimed that they will make stuff for you, and to give them full credit, they are good at it.”

On meeting a certain investment threshold on a platform, marketers gain access to several tools that allow them to create and target better. According to Amin, “You are working with the people who know the platform best to come up with content for it, and that reduces production costs.”

AI is also shaping up to be a gamechanger in data intelligence and analysis. Amin says, “The collation and analysis of data usually takes 80% of the time. With AI on top of a stack including sales data, market share and profitability, and customer behaviour, you could get an analysis in seconds.”

In-housing has already made deep inroads into media planning. With internal teams supplementing the role of a media agency, AI is helping upgrade their skills to plan even better. Amin adds, “I see social and digital production, and digital content creation, moving in-house because it makes sense. It is very templatised work. The role of the in-between social and digital agency is most at risk because of AI.”

Matt Shoult, founder and CEO of Maker Lab, a consultancy that helps marketers with in-housing, says, “AI is reshaping how functions like digital production, social media planning and buying will operate, enabling leaner, more agile teams to manage workflows with greater efficiency. By embedding AI-driven automation and insight tools, brands can scale output while maintaining flexibility, allowing them to respond to consumer demand faster and more effectively. We anticipate the mainstream demand for in-housing evolving beyond execution, with internal teams playing a more strategic role in integrating AI, automation, and data-driven solutions.”

For Zalora, in-housing has given it the ability to take on many of the mandates that would otherwise have been under the purview of a communications partner. Daguimol said, “Our in-house teams across Southeast Asia have developed production capabilities to a point where we offer them as a service to brands, helping them build campaigns and tell their stories. We run most, if not all functions in house. This includes digital and offline production; social media planning, data strategy, data management and insight.”

Zalora’s data practice has grown on a parallel track with its production capabilities. Daguimol says, “We have started to leverage our data expertise to offer 360-degree marketing solutions to brands on our platform, all focused on enhancing brand partner growth and performance.”

Survival strategies for agencies in an in-housing driven world

Even the strongest advocates of in-housing still believe agencies have a role. It is just that the specificities of roles are a lot less all-encompassing than the industry would like them to be. Some of the ways in which they can remain relevant are:

Less integration, more specialisation
Amin believes that agencies have built entire business models around trying to sell more value and services to the same marketer. But this does not necessarily align with what marketers want. He says, “Innovation and breaking clutter remains the number one ask from agencies of all sorts. In a proliferated world, I hope they drive specialisation and use AI to deepen that specialisation. That would justify their value.”

Building brand guardrails for AI
Chris Maxwell, head of Lution and founder of the IHAC, believes that while AI and automation are hot topics, no one has managed to get a handle on them so far. There are constant concerns around intellectual property, security and whether the use of AI is on the right side of legislative guidelines. With their legacy as custodians of the brand, agencies can help define how best to use AI.

Google’s Sharma says, “Agencies can become experts in managing and optimising AI tools, offering services like AI strategy development, implementation, and performance analysis. We are seeing a variety of AI solutions emerge, and there will be consulting required on which ones to use, how to use them, and what will be most effective for a brand.”

Collaborate and value add
Lution’s Maxwell suggests an attitude change is in order for agencies. He says, “Look for those value-added services where you can come in and deliver high level creative strategy, platform development, and tier one production, media, and connections, while acknowledging that a business may want to do social media, creative, production, or video editing, in-house. Find opportunities to be a partner to these in-house agencies rather than feel like they are eating your lunch.”