by Kimeko McCoy * 20 August 2025 *
Ivy Liu.
Industry has moved functions to in-house. Playbooks have been established for everything from programmatic media buying to social media. But brands don’t use the same internal AI play.
Some companies, such as U.S. Bank are taking a hybrid strategy, while others, such as Adobe, are more flexible, using AI tools internally and in partnership external partners. Most brands are still testing AI in the marketing funnel and learning how it can be used to save time and money.
Over time, AI is likely to change the attitudes of many brands about bringing in-house different parts of their marketing and advertising operations. Max Willens is a senior analyst at eMarketer. He said that the ground under everyone’s feet must first be firmed up.
Consider U.S. Bank. The financial institution uses AI-powered marketing tools for everything from customer experience to research and analysis. Supergood, ad agency of Supernatural AI, is responsible for more intensive marketing efforts. For example, building synthetic audiences that can be used as focus groups to provide real-time feedback. Michael Lacorazza is the CMO of U.S. Bank. He says that a hybrid approach, which extracts some AI functions but retains others, is appealing for a number of reasons. One hand, the brand does not want to split up with its agency partners. He said that it is a heavy lift to adopt tech that is “not very user-friendly” and cumbersome. Marketers are still trying their best to determine the efficiency of AI-powered tools. Digiday reported recently that some advertisers are moving away from AI-powered platforms like PMax. While marketers continue to try and use AI for brand building, they are not having much success. Other brands, such as Adobe and Unilever, have not shied away from integrating AI tools. Unilever recently built Beauty AI Studio, a bespoke in-house system within its beauty and well being business, to create assets for paid social, e-commerce and programmatic display inventory. Adobe, a B2B company that develops software, has developed AI-powered tools like Firefly for external companies, while also using these tools internally, according to Stacy Martinet. Adobe’s vp marketing and communications. She said, “We view AI as part the ideation – a partner, and not a substitute, and creative, part the production.” In the last few years, brands have in-housed creative teams, social media teams, and even media buying groups. According to Fred Schuster of InnerGroup, a marketing operations company that operates within brands, it’s not because brands don’t want AI technologies in-house. Internal agencies are often viewed as cost centers because they lack the budget and scale to develop and license AI tools. External partners can invest in AI tools and spread the costs over clients or even resell AI services to recover costs.
If you’re an external partner, you can argue that you are getting money for AI in order to sell it to brands as a product versus this being a tool that a brand needs,” Schuster explained. Patrick Burgoyne is the co-founder of In-House Agency Leaders Club and he agrees with Schuster. In-house teams are faced with many barriers when it comes time to adopt AI, such as copyright risks, IP and red tape. Burgoyne believes that it is less likely that AI will result in an increase in headcount for the in-house agency team and more likely to partner with external agencies who can deliver speed and efficiencies. External agencies are already working to close the gap and make in-housing accessible. Jellyfish launched an AI-powered platform for media in-housing in March. This platform allows advertisers to automate media strategy, content strategy, and campaign activation.
In response to both Schuster and Burgoyne, this is why U.S. Bank uses a hybrid strategy. Lacorazza said, “Once something is built, you have to maintain and evolve it.” Maintenance means spending marketing dollars when marketing budgets have flattened and are often 7% or less of their company’s revenues. Gartner’s CMO Spend Survey 2025 shows that CMOs will spend an estimated $1.2 billion in 2025.
As with the in-house pendulum, it is expected to swing more in favor of AI tools being used by in-house agencies. Nicole Vinson, Kellanova’s vp of global digital, media, and omni-shopper experiences, said that as the tools become more accessible and democratized, brands will be looking at what they can accomplish themselves. Vinson stated that the current question is: “What is the right balance between in-house and outsourced agency content production models?” Sam Bradley contributed to the report.
