Marketers are doing a better job of selling themselves on in-house programmatic.
The IAB report Programmatic In-Housing: Benefits, Challenges and Key Steps to Building Internal Capabilities released last month reveals that some 35 percent of marketers surveyed said they reduced the role of external agencies in 2017, up from 14 percent in 2016. The reasons cited include improved ad performance and ROI; cost efficiency; better control and management of data and targeting; enhanced real-time optimization capability; and full accountability and focus on brand goals.
While 18 percent of brands now claim to in-house all programmatic functions, another 47 percent have partially moved programmatic functions in house, according to the survey. These marketers are mostly doing so by gaining ownership of their technology contracts and taking a more active role in campaign strategy, while still leveraging external professional services teams for execution.
Obstacles on the way to DIY
The fact that relatively few brands are going alone is telling. While brands are understandably motivated to take more control of their programmatic operations and cut out intermediaries, the reality is that for most, a hybrid model makes more sense.
One major problem is talent. The programmatic universe is small and brands’ ability to draw such talent is often negligible, especially if the brand is headquartered away from the major tech centers.
The other factor is that media buying is a difficult endeavor. While you can make a fair go at it by hacking away on your own, going the DIY route may mean a drop in quality both in placements and data.
Hybrid approaches can work
Most brands opt for a compromise solution. There are a few ways to go about this. One is the tech ownership model, in which the brand owns the tech stack and data but the agency has full control over planning and execution. The other is the triumvirate model in which brand, agency and tech provider work together and have regular points of contact.
The extent of control over the process will be an individual decision for marketers. A pragmatic approach will work best for most. While taking complete control of programmatic may be an appealing prospect, brands should look at all the factors to determine whether it’s really the best move for their companies.
This summer, MediaMath will release our own guide on bringing technology in-house (Note: It doesn’t mean getting rid of your agency! We love agencies and work with all the major holding companies.) that explores in more depth the various operating models for taking technology in-house and how you can achieve each. Stay tuned.