Brands might be keen to bring programmatic buying in-house but the best solution lies in a hybrid approach. Attila Jakab, Infectious Media's Managing Director discusses with The Drum.
A recent survey by the ANA found 35% of brands have expanded their in-house programmatic media-buying capabilities and limited the role of outside agencies, up from 14% in 2016.
This drive for clients to take charge of programmatic is now becoming well-documented:
A study by Adobe released in December predicted that 62% of brands would bring programmatic in-house by 2022.
Our own research of more than 200 decision-making marketers with programmatic remits in EMEA, APAC or NOAM fleshed out some of the detail behind the move. 84% of advertisers want more control, while 73% just don't believe that agencies accurately measure campaigns bought programmatically. It's a very good time to be a programmatic specialist looking to negotiate a role in-house.
"The market leaders must look to the quality of their data to give them the edge"
The trend is beginning to feel like a tide that cannot be turned, and why should it? Worries over brand safety and ad fraud dominated the headlines of the business press throughout 2017, and this can be seen as the natural response of brand owners.
Indeed, it's hard to argue with the wisdom of a client like Unilever, which recently announced it has been able to feed €250m back into its media budget just by bringing certain elements of its marketing in-house.
Our work in this area means we hear concerns from brands about the value of programmatic all the time. Aside from the desire to spend media budgets more safely and effectively, we also hear about the frustrations of big clients who feel that they can't find agency partners who can leverage their data adequately.
It used to be that being a large brand owner meant that you could work with a major agency network that would ensure you got the best volume rates.
Programmatic buying has whisked away that advantage, meaning that the market leaders must look to the quality of their data to give them the edge.
Buying power is only meaningful if you know how to execute on your data assets, which gives you an advantage. If they can't find an agency partner who will deliver this kind of service brands often feel that they might as well hire the expertise and create their own in-house programmatic facility.
But is this throwing the baby out with the bathwater?
For example, a brand may have a strong analytical data team, with data management experience, yet it doesn’t have the talent or knowledge for programmatic optimisation.
Or a brand might have built an optimisation team internally, but doesn’t have the strategic resource or supply trading team to support the team of optimisers.
These are key skills that it is worth buying in from a specialist agency.
I'd suggest that clients look for a kind of pick and mix, hybrid arrangement with an appropriate agency – selecting only the individual services that they need, which can be effectively integrated with their own capabilities. This also applies where brand owners are trying to alter current agency arrangements.
They can begin by demanding a better deal from agency partners, revisiting contracts and inserting audit clauses, or switching to partners that grant full data access. For agencies, there’s an urgent need to proactively address advertisers’ concerns by offering full transparency and working with partners that can effectively prove the value of programmatic.
Even with all the criticism being leveled at agencies around transparency and fraud, our research shows advertisers still see them playing a valuable role.
96% of advertisers in our study saw a future for agencies managing multiple aspects of programmatic – even while they are also advocating more in-house control.
So, agencies will need to adopt a more flexible, hybrid approach that caters for advertisers’ specific requirements as well as their desire for greater control over their digital advertising.
This will be crucial if agencies are to build a more effective and sustainable working relationship with brands in the future.