Agency Opportunities Rise Amid Marketing Team Downsizing
The pendulum appears to be swinging back toward external agencies as corporate marketing departments face continued pressure to reduce headcounts and trim budgets. This shift reverses the decade-long trend of bringing creative and media operations in-house, creating new opportunities for agencies willing to adapt to changing client needs.
Recent data from the Bureau of Labor Statistics paints a sobering picture for marketing professionals. The advertising, public relations, and related services sector shed approximately 3,200 jobs in April alone, continuing a troubling pattern that began late last year. Meanwhile, major brands including Coca-Cola, McDonald’s, and Procter & Gamble have announced significant restructuring of their marketing operations.
“We’re seeing a clear reversal of the in-housing trend that dominated the 2010s,” says Melissa Chen, principal analyst at Forrester Research. “Economic pressures are forcing CMOs to make difficult staffing decisions while still delivering results. Agencies that can offer specialized expertise without the overhead of full-time employees are suddenly looking very attractive again.”
This development marks a significant inflection point in the marketing ecosystem. During the past decade, many brands built robust internal creative and media teams, citing cost savings, faster turnarounds, and greater control as primary motivations. Digital giants like Google and Facebook further accelerated this trend by providing self-service advertising platforms that reduced the need for agency intermediaries.
However, the economic realities of maintaining large in-house teams have become increasingly challenging. Fixed costs associated with salaries, benefits, and training create significant financial burdens during downturns. The Federal Reserve’s aggressive interest rate policies have further squeezed corporate budgets, making flexible external partnerships more appealing.
“Marketing departments are being asked to do more with less,” explains James Wilson, CEO of Wilson Partners, a mid-sized agency network. “They’re looking for partners who can scale up or down quickly without the commitment of full-time headcount. We’re seeing RFPs from brands that haven’t worked with outside agencies in years.”
The numbers support this observation. A recent Association of National Advertisers survey found that 64% of brands are now considering external agency partnerships for work previously handled in-house. This represents a 22% increase from just eighteen months ago. Project-based engagements are particularly popular, allowing brands to access specialized talent without long-term commitments.
Financial services giant American Express exemplifies this trend. After building an extensive in-house creative operation between 2017 and 2021, the company recently shifted strategic and creative development back to external partners while maintaining execution capabilities internally. This hybrid approach balances cost control with access to diverse creative perspectives.
“The pendulum never stops in the middle,” notes Harvard Business School professor Regina Abrami. “Companies tend to over-correct in both directions. The massive in-housing wave created legitimate efficiencies but also introduced hidden costs and creative limitations that weren’t immediately apparent.”
These hidden costs include technology investments, talent recruitment, and maintaining specialized skills that might only be needed periodically. As marketing channels proliferate and consumer behaviors become increasingly fragmented, the expertise required to navigate this complexity continues to expand.
For agencies, this environment creates both opportunities and challenges. Those positioned to offer flexible engagement models, specialized capabilities, and transparent pricing stand to benefit most. Conversely, traditional agency structures with high overhead and rigid service models may struggle to capitalize on this shift.
TBWA Worldwide CEO Troy Ruhanen sees clear evidence of this trend in his agency’s recent growth. “Clients are coming back to agencies, but they’re not looking for the same relationship they had five years ago. They want partners who can plug specific capability gaps, challenge their thinking, and move quickly. The old AOR model isn’t what’s driving our growth.”
This evolution extends beyond creative services. Media planning and buying, which saw significant in-housing during the programmatic boom, is returning to specialized agencies as platforms become more complex and privacy regulations increase. According to MediaSense’s 2023 Media Landscape Report, 47% of brands that previously brought media buying in-house are now exploring external partnerships.
“The cost of staying current with ad tech capabilities, managing multiple platform relationships, and navigating privacy regulations has become prohibitive for many in-house teams,” explains MediaSense founder Graham Brown. “Specialized media agencies can spread those costs across multiple clients, making them more efficient partners.”
For marketing leaders, this shift requires careful consideration of which functions deliver the most value when kept in-house versus outsourced. Brand strategy, consumer insights, and marketing technology infrastructure often remain internal, while specialized creative, production, and media execution increasingly move to external partners.
As this trend accelerates, the relationship between brands and agencies continues to evolve. Success in this new landscape will depend on transparency, collaborative workflows, and flexible partnership models that combine the best aspects of both in-house and agency approaches.
The marketing pendulum continues to swing, but perhaps with less amplitude than in previous cycles. The future likely belongs to hybrid models that balance the control and integration of in-house teams with the specialized expertise and flexibility of agency partners.
