Is an in-house design studio right for your company?

• Hire an external agency
• Create a dedicated in-house design studio
• Implement a hybrid model: an in-house design team supplemented by outside experts

Businesses that traditionally outsourced design work to agencies are finding in-house studios more attractive as demand for design work increases at a faster pace. The Association of National Advertisers’ (ANA) latest survey found that 82% of ANA members have an in-house studio in 2023—up from 78% in 2018, 58% in 2013 and 42% in 2008.

In-house design studios are increasingly popular, but companies considering this path should carefully consider their specific needs, resources and goals. This article will explore the advantages and challenges of in-house design studios to help you determine whether this solution aligns with your company’s overall business strategy and objectives.

Companies are competing on digital customer experience now that consumer preferences have shifted largely online. Despite that, Adobe reports that only 45% of organizations are meeting customer expectations for a cohesive customer experience.

Studies show that design, accessibility and interface greatly influence brand perception and can make or break purchasing decisions for a majority of consumers. It takes less than a tenth of a second for people to form an opinion about a website that determines if they stay or leave, according to research published in Behavior and Information Technology.

A 2025 study by Verint found that 78% of customers will switch to a competitor after a terrible customer experience, with 72% saying they would tell family and friends not to purchase from the offending company.

That said, when users have an amazing customer experience, at least 81% are likely to make repeat purchases and recommend the company to family or friends, according to the same study. And close to three in four users are inclined to leave a positive review.

• 45% - Only 45% of organizations meet customer expectations for a cohesive customer experience. Source: Adobe 2025 AI and Digital Trends
• 78% - 78% of customers will switch to a competitor after a terrible customer experience. Source: Verint State of Customer Experience 2025
• 86% - 86% of respondents belive AI will have a transformative impact on customer experience. Source: 2024 HubSpot State of Service Report

Successful design departments share a hallmark trait: organizational integration. McKinsey’s research found that companies across multiple industries see improved outcomes when they embed designers into cross-functional teams.

Such highly valued close collaboration between the design team and other departments is a primary advantage of the in-house design studio. Internal designers are readily available with file access. They know your company’s workflow and processes well and they are naturally keyed into strategy and culture. This deeper connection to company culture creates a higher sense of ownership and increases transparency into a project.

Agency designers will learn as much as they can about your brand, but their knowledge is spread across multiple clients and projects. Because in-house design teams work solely for you, they know your brand inside and out. They have a deeper understanding of your company’s mission and vision, goals, products or services, target audience, marketing positioning, values and voice.

This knowledge translates directly into time and money saved. Imagine developing packaging graphics for line extensions across a company’s various product brands. Each has established brand guidelines. This type of work demands control over design elements such as logos, typography, color schemes and visual guidelines in the company’s brand standards.

Agency fees add up. A blended agency rate could be more than $200/hour with top level talent charging as much as $750/hour. Constantly outsourcing design work can accumulate expenses over time without building capability and knowledge. With an in-house team, there are no recurring fees or markups, and the company retains full control over the design process. Additionally, an in-house studio can handle a broader range of design needs, reducing the need for outsourcing and associated costs.

An in-house design studio can create long-term cost efficiencies, but it costs money upfront. Companies need to consider the initial investment to hire skilled designers, equip them with the necessary software and hardware, and allocate office space. These costs can be substantial, especially for small- or medium-sized businesses with limited resources

Some companies might not realize how diverse design and its capabilities are. Agencies often employ a wide range of designers, targeting different expertise and specialties. In contrast, an in-house design team may have skill gaps. If a company hires an expert with niche skills, they are still responsible for that headcount when demand for their specialty dips.

For example, a company might have traditionally focused on the design of physical products—their color, materials, finishes, form and function—requiring an army of industrial designers. As demand shifts to more digital experiences, the company hires more UX designers and might struggle to keep their industrial designers busy.

Good designers are constantly honing their craft and adding skills to their portfolio. Not being able to give talented designers a steady stream of exciting and experience-building projects could create higher turnover.

A set design staff can also lead to creative stagnation. Internal designers may become accustomed to the company's preferences and tend to produce designs aligned with previous successes, potentially stifling fresh and diverse perspectives.

Companies that establish in-house design teams will eventually find they have a finite capacity. This can be particularly difficult during periods of high demand. Oh witnessed these challenges first-hand as part of an in-house design studio at a large enterprise.

Companies don’t have to choose one extreme: limit themselves to the challenges of working with an agency or rely only on their own staff. They can implement a hybrid model in which their in-house design team is supplemented by outside experts.

In this model, a dedicated team of consultants is created and embedded within the company, quickly granting the same benefits as an in-house team without the time and risk associated with those efforts. A third party provides a trusted network of talented professionals along with strategy, project oversight, guidance, scalability and leadership.

This approach supports a unified design team, even if they’re distributed across the organization. Company leadership can rely on a unified team of professionals, both internal and external, who combined have the right portfolio, niche skills and fresh perspective.

Regardless of whether a company uses an in-house, hybrid or external design team, there are several resources available to make the design process more robust and cost-effective. Integrating AI into the creative and design processes grants companies the agility and capability to produce high-quality creative that keeps up with the market and customers, without demanding more from the team. Meanwhile, nearshoring or offshoring creative work can result in higher levels of output and cost-savings.

AI must factor into the design process, no matter what model a company uses.

When considering an in-house or hybrid design team, having a seasoned strategic partner makes a noticeable impact on the result, Linstrom said. Careful planning minimizes disruption to business during the transition process. And breaking the process into phases makes it easier to iron out the issues that arise during transformation. That said, businesses should structure their transition plans according to their individual needs.

Nearshoring and offshoring certain creative roles are additional options to reduce cost and redirect that spending on internal priorities, creative and talent. Both options maintain a high level of creative output that can be further augmented by automation and/or AI-enabled tools.

External design teams build their AI policies and tools around meeting the demands of multiple customers. Learning how an agency uses AI and communicating needs and expectations upfront is critical.

In-house, a company can take full control of AI in the design process to ensure the work is tailored to the specifics of the individual vision and brand.

In a hybrid model, AI can automate parts of the design process that would be expensive if sent to an external agency.