Why Brands Are Hiring Production Companies Directly, and What It Means for the Pitch

For most of the last few decades, the path into commercial video production ran through an agency. A brand hired an agency, the agency developed the creative, and the agency hired a production company to execute it. The production company rarely spoke to the brand directly. The agency was the buyer, the client relationship, and the buffer, all at once.

That structure is still the majority of high-end national commercial work, and it isn't going away. But the share of work moving around it, brand to production company with no agency in between, has been growing steadily, and the data on why is now specific enough to name.

The In-Housing Numbers

The Association of National Advertisers' most recent benchmark research found that 82% of its member companies now operate some form of in-house agency, up from 78% in 2018. That's not a dramatic swing year over year, but it's a consistent direction over nearly a decade, and the ANA's own researchers describe the trend in blunt terms: marketers are five times more likely to say in-housing is increasing than to say it's pulling back.

Layer AI on top of that and the pressure on the traditional agency middle layer gets sharper. A 2025 survey from Typeface found that 60% of senior US marketing leaders said they were spending less on agencies specifically because of AI, meaning tasks that used to require an agency's production or creative bandwidth (concepting, drafts, first-pass edits) are increasingly happening inside the brand's own marketing team before an outside vendor ever gets a call. Meanwhile, the large holding companies that own most major agency networks have seen their share of US ad spending fall from 44.6% in 2019 to 29.6% by early 2024, a decline steep enough that it helped drive the Omnicom-IPG merger that closed in late 2025, the largest consolidation in the industry's history.

None of this means agencies are done. It means the funnel that used to run almost exclusively brand-to-agency-to-production-company now has a second, growing lane: brand-to-production-company, with the agency's usual functions (strategy, creative direction, media buying) either handled in-house or skipped for projects that don't need them.

What Changes When There's No Agency in the Middle

An agency does real work between a brand and a production company, and when that layer disappears, the work doesn't disappear with it, it just falls on whoever's left. Three things shift specifically.

Creative and strategy become the production company's job. An agency-routed job typically arrives with a locked creative brief, a script or treatment direction, and a defined message the production company is executing against. A direct-to-brand job often arrives with a business problem ("we need something for our product launch") and nothing else. The production company either builds the creative strategy itself or brings in someone who can, and that work has real cost: concepting, messaging, sometimes a formal treatment, none of which shows up in a standard AICP execution bid because an execution bid assumes the creative is already solved.

The relationship risk moves downhill. An agency producer manages scope, absorbs client mood swings, and runs interference on unreasonable notes before they reach the set. Direct-to-brand work removes that buffer entirely. The brand's marketing manager is now the production company's direct point of contact for everything, including the parts an agency producer used to handle quietly. Scope creep, unclear internal approval chains, and last-minute creative changes land straight on the production company with no intermediary to manage them.

There's no second margin to hide behind, and no second margin to split with. In an agency-routed job, the agency has already built its own markup into what the brand pays; the production company's fee is a separate, downstream number the brand often never sees directly. Going direct removes that layered structure, which sounds like it should make pricing simpler. In practice it means the production company is now the only entity in the chain absorbing risk and overhead that used to be split two ways.

Why Direct Work Is Priced Higher, Not Lower

This is the part brands new to hiring production companies directly are often surprised by: direct-to-brand rates run 15 to 30% higher than the equivalent agency-routed job, not lower, even though it looks on the surface like cutting out the agency should cut out a cost.

The structural reason: an agency-routed production fee typically runs around 20% of hard costs, because the agency has already absorbed the creative and strategy overhead upstream. A direct engagement runs closer to 25 to 30%, plus an additional $3,000 to $8,000 in creative and concept fees that simply didn't exist as a line item when an agency handed over a locked brief. The production company isn't marking up the same job higher out of opportunism. It's now doing agency-level creative work in addition to production, and pricing that reflects two jobs being done instead of one.

Brands that expect "no agency markup" to mean a materially cheaper number are comparing the wrong things. The honest comparison isn't agency-fee-plus-production-fee against production-fee-alone. It's total cost through an agency (agency markup, plus the production company's agency-routed fee on top of that) against total cost going direct (a somewhat higher production company fee, with no agency markup layered underneath it). Depending on how the agency itself was priced, going direct can still land lower for the brand overall, even at a higher production company rate, because one layer of markup disappeared instead of two.

What This Means for the Pitch

A production company positioning for direct-to-brand work has to sell differently than it sells to an agency producer. An agency producer already knows what a treatment is, already has a locked budget range, and is evaluating the company on crew, gear, and execution reliability. A brand marketer calling directly, often for the first time, is evaluating something closer to a full-service partner: can this company help figure out what the video should even say, not just shoot it well.

That means the pitch materials that win agency-routed work (a tight reel, a clean day rate, evidence of reliable execution) aren't sufficient on their own for direct work. What closes direct-to-brand business is proof the company can run the parts of the process an agency used to run: a clear discovery process that surfaces the brand's actual goal, a treatment or creative rationale document that shows strategic thinking rather than just visual style, and a scope of work detailed enough to substitute for the guardrails an agency producer would otherwise provide.

The Position

The shift toward direct-to-brand work is real, measurable, and not reversing in the near term. It's an opportunity for production companies built to handle the creative and relationship load an agency used to carry, and a trap for companies that try to win direct work with an agency-routed pitch and an agency-routed price. The company that shows up able to run discovery, build a real creative rationale, and hold the client relationship without an agency buffer is the one that earns the higher rate that kind of work actually requires. The company that shows up with just a reel and a day rate is competing against a much lower bar than the job actually demands, and it shows up in the margin.