By Liam Brennan, Senior Marketing Consultant, Overline
The death of the traditional brand-agency model has been greatly exaggerated.
What’s happening is far more interesting. Brands and agencies are reimagining what marketing operations look like in a future where machines increasingly handle execution, and humans focus on strategic functions.
Today’s leading marketers embrace a right-housing mindset – building the right marketing capabilities in the right place, creating hybrid models that blend internal talent with external expertise to maximise outcomes.
World Federation of Advertisers (WFA) data supports this evolution; 80% of brands have in-housed at least some previous agency remit, and 86% report satisfaction with their ‘right-housed’ results.
Successful right-housing often means building strategic muscle within the brand, upskilling internal talent, and developing better ways of working – not blindly taking work away from agencies, and offsetting agency cost-reduction with higher-than-expected operating costs.
In 2025, we stand at the precipice of what we at Overline call the ‘Fourth Wave of In-Housing’, driven not by cost-efficiency, but by the accelerating forces of AI, automation, and a growing demand for greater marketing value and agility.
Yet agencies face a trust deficit, with brands questioning whether legacy models can deliver in an AI-first, platform-led marketing landscape.
What is driving the Fourth Wave of In-Housing?
In-housing trends can be broken into waves, each reflecting notable shifts in three forces that typically drive the acceleration of in-housing: emerging marketing technology, opportunities to improve productivity, and changes in corporate priorities.
We are currently in the latter stages of the ‘Third Wave’ (i.e. Hybrid and Agency Right-Housing), with current industry trends representative of those three forces likely to push us into the next wave.
- Agency Juniorisation
Agencies are grappling with margin pressures, leading to downsizing and the loss of senior strategic talent. Data from UK-based talent acquisition firm Fractional / Talent showed that agency activation managers now have typically less than three years’ experience and noted a 25% drop in senior activation talent over the past year. Brands, increasingly dissatisfied, are reclaiming these responsibilities.
- Inventory Democratisation
The once-complex landscape of programmatic media is now widely accessible. From CTV to DOOH, digital-first platforms have levelled the playing field. Agencies no longer hold exclusive access to inventory; brands can license trading desks directly. Indeed, over 75% of digital investment now goes to just three partners (Google, Meta, and Amazon), further reducing the barrier to entry.
- AI and Automation
Perhaps the most transformative force, AI is reducing the need for ‘hands-on-keyboard’ talent, improving operational productivity, and increasing marketing effectiveness. Machine-to-machine platforms such as Google’s Performance Max and Meta’s Advantage+ are far from perfect but are indicative of the future of activation: platform first, AI-driven creative and media buying, optimised to sales data in real time.
The ‘Fourth Wave’ may seem like the future, but it is already here. Some 63% of WFA members already use AI as part of their marketing activities, and 58% expect to pay agencies less as a result (WFA, 2024).
For agencies to succeed in the future, they need to redefine their value from manpower to mind power.
The new role of the agency: from executor to advisor
As brands increasingly internalise execution, agencies must evolve or risk irrelevance.
Agencies need to commercialise their thinking, not just their throughput. The best agencies are already ahead, offering consultancy, embedding talent inside brand teams, and training brand-side talent. They’re collaborative, not defensive, and diversifying their revenue streams in the process.
Whilst it may be tempting for brands to see this ‘Fourth Wave’ as an opportunity to revisit a cost-reduction narrative around in-housing, CMOs should instead be reframing agency relationships and compensation models to reflect value, not staff and trading volume.
Therefore, the value of the agency of the future shouldn’t be measured on billable hours, but instead by the quality of their:
- Strategic advisory and market insight
- Innovation scouting and trend synthesis
- Specialist support (e.g. retail, commerce, analytics)
- Training, talent augmentation and overflow services
Agencies continue to offer an objective, outside-in view which remains difficult for brands to replicate. This is the highest value agencies can provide.
Indeed, in the era of AI and Automation, strength in marketing foundations – think brand strategy, audience modelling, journey planning, channel strategy, measurement – remains as, if not more, important than ever before.
Although some brands are progressing towards a fully in-housed model, rarely do they fully disconnect from the agency relationship for these reasons.
However, not all brands believe their agencies are ready for this new opportunity. Only one in 10 large multinational brands believe the current brand-agency model is fit for future purpose, and less than a quarter believe agencies have the right talent and skills to deliver (WFA, 2023).
How should brands & agencies approach the ‘Fourth Wave of In-Housing’?
In-house teams now do what only agencies could do five years ago, but with greater agility, closer proximity to the brand, and tighter feedback loops. AI will further lower the cost of cognition for brands.
However, successful right-housing is not a swap of remits. It’s a mutual discussion around the right balance of brand-run services and agency-run services, and how the two work together.
The brands that will succeed will not solely seek to bring more roles in-house; they’ll rethink the brand-agency model entirely:
- They will create marketing operating models that are faster, smarter, and closer to the customer, enabled by in-house control and elevated by strategic partnerships.
- They will view AI as a multiplier, not a replacement, and invest in the talent, tools, and operational culture required to extract its value.
- And critically, they’ll be clear on why they’re right-housing in the first place: not to cut costs, but to unlock growth, control, and competitive advantage.
This places greater pressure on agency partners to elevate themselves to become a strategic trusted partner, developing a strategic and consultative relationship with their clients and commercialising their knowledge and expertise rather than relying on staffing volume and opaque trading practices.
In the ‘Fourth Wave’, your marketing operating model is your edge. CMOs should not be asking “Should we in-house?”, but instead be asking “How do we best structure for strategic agility, operational productivity and growth opportunities in a tech-led world?”
