There are increasing signs of a major shift taking place in programmatic right now, and at the heart of it is a sharp focus on data, suggests Martin Kelly, CEO & Co-founder of Infectious Media. Originally published in PerformanceIn.
There are increasing signs of a major shift taking place in programmatic right now, and at the heart of it is a sharp focus on data.
High-profile advertisers are rightly raising questions about third-party data – not only in terms of how it has been sourced but also how reliable it actually is.
These concerns have been heightened by moves such as Facebook’s decision to shut down its Partner Categories offering, which allowed advertisers to target third-party data audiences. They are also evident in the work of industry bodies such as the WFA, whose Manifesto for Online Data Transparency commits to a data ecosystem that respects consumer choices and their right to control their own data.
In addition, this shift comes in the wider context of the introduction of GDPR, which is likely to set the global standard for consumer consent and data usage.
Value of first-party data
As a result, advertisers are increasingly seeking to take control and maximise the value of their own first-party data. They are, however, increasingly frustrated that their agency partners aren’t properly geared towards helping them realise the huge potential to make use of this via programmatic.
Along with a need for greater transparency, this is driving the in-housing trend, with brands believing the only way they can properly exploit the value of their data is to bring programmatic in-house.
Our research suggests that while aspects of programmatic will increasingly be brought under advertisers’ own control, they still very much see a role for agencies. Our survey of key marketing decision makers with programmatic remits in EMEA, APAC and NOAM found that 84% of advertisers want more control over their programmatic operations but that 96% still see agencies managing multiple aspects of programmatic advertising in the future.
A brand new approach
It’s clear then that agencies need a brand new approach to properly meet changing advertiser needs. Agencies seeking to thrive in this increasingly hybrid environment will need to be flexible – and they’ll also need to add genuine value in areas where they haven’t traditionally.
Mastering first-party data will prove a significant part of this, which means agencies will need to up their game on the tech front and bring development skills in-house - something they have never felt comfortable with in the past. Developing on APIs will become table stakes in the future as this facilitates the flow of data between systems.
And to truly deliver an offering beyond that which brands can replicate in-house, they’ll also need to act as systems integrators and create the connective technology that ensures an advertisers tech stack works together seamlessly to avoid the all too common ‘Frankenstack’ of redundant technologies that have been sold indirectly to brands. They’ll also need to think beyond ‘planning’ and ‘buying’ teams and build analytics, engineering and data science teams.
Making this new approach work in a hybrid environment will require agencies of the future to take a more flexible approach with their clients, adapting their services, technology and trading models to make them more modular as brands will bring their own skills, data and technology to the table.
But it will also require advertisers to change as well. Paying agencies on commission should become a thing of the past given that programmatic is actually much more labour intensive than the old ways of planning and executing campaigns, and we will see the emergence of more FTE-based remuneration models as agencies bulk out those higher-value teams in optimisation, analytics and data science.
Changing the model
There’s no question that this shift in the relationship between advertisers and data marks the start of a new era for agencies. Those that are able to adapt fast and deliver value in this new environment are those who will thrive in the future.