Three Things to Consider Before Bringing Programmatic In House
The IAB released a study in May indicating that 18% of programmatic advertisers have completely brought programmatic media buying in house, while an additional 47% have at least partially done so. Considering programmatic now accounts for more than 80% of digital ad spending, these impressive stats highlight just how important the need for transparency and control have become in media buying. 1
However, with great power (or in this case, full control of your ad tech stack) comes great responsibility. Bringing an entire programmatic strategy in house is a massive undertaking. None of these brands made it happen overnight, and, while some haven’t looked back, others determined the move wasn’t right for them.
So, should you take the plunge? This article offers a few important things to consider while making your decision.
Consideration 1: What’s does “in house” mean to you?
The recent call to arms for greater transparency into inventory quality and the supply chain have led many brands to seek a more efficient digital media strategy. But for most, this hasn’t meant taking on sole responsibility for the entire programmatic process. A closer look at the IAB data indicates that few advertisers are aligned on what “fully in house” means.
For instance, some brands viewed taking their entire programmatic process in house as working directly with a DSP instead of using a creative agency to help execute buying. To others, it meant having their agency of record provide them with a programmatic strategy while their in-house team performed the media buys. Across all these interpretations of taking programmatic media fully in house, it was extremely rare that a brand owned every aspect of the programmatic process — building their own ad tech stack, developing KPIs, managing data, trafficking ads, and so on.
So, while the move to programmatic in-housing has gained momentum, amidst this great shift are varying layers of commitment, autonomy, and resources. It’s up to you to determine which strategy makes the most sense for your business.
Consideration 2: Why are you going in house?
There are a number of reasons you may want to bring programmatic in house. It could be to improve your ROI, gain more control over placements, or achieve greater transparency into spend and performance. But no matter the objectives, you need to ensure they will outweigh the costs.
Entirely taking over programmatic media is an enormous investment. Only a few of the largest brands have had the means to build their own programmatic tech stack. You must also consider the ongoing investment of data management, staffing, and other associated costs.
If you’re going in house to improve ROI, you’ll need to keep in mind the difference between the fixed costs of taking programmatic in house versus the variable costs of using an outside agency. When using an agency, you only pay when you use their services. Staffing an in-house team means paying the same salaries throughout the ebbs and flow of your media buying.
If your objective is better control and transparency, be sure you’re willing to take on the associated responsibilities: managing reach and frequency, establishing and optimizing to your KPIs, and maintaining brand safety and inventory quality.
Consideration 3: Are you prepared?
After developing your strategy, you need to consider available technology, resources and expertise.
Building and Supporting Technology
Developing a partial or full programmatic tech stack will involve several teams across departments. You need to ensure you have commitment and buy-in across all stakeholders.
The number of people you’ll need to develop and execute your programmatic media depends on how much of the process you’re bringing in house. Some brands have brought in programmatic department heads, but continue to have an agency of record with whom their experts work to develop the programmatic strategy to execute buys. Others have essentially modelled the structure of a trading desk to manage strategy and execution. Any one of these structures can work, but all require that you staff up a team of programmatic experts.
Programmatic media buying requires tons of data—collecting, aggregating, layering, and swiftly drawing actionable insights from it. Depending on your strategy for taking programmatic in house, you may need to take some or full responsibility for managing your data, which would require an experienced (and expensive) data science team.
As with everything in digital media, programmatic buying will not remain stagnant. Technology, key players, channels, and formats will continue to evolve. Many companies have built their entire business model on this evolution. Therefore, your strategy needs to account for, and proactively address, the constant changes in the industry. That means hiring exceptional talent that fully understands the landscape, and can act autonomously to address innovation. It also means providing employees with ongoing opportunities to continue their industry education.
After reading through this list, the complexity of bringing programmatic in house may seem daunting. But one thing is clear: programmatic advertising isn’t going away any time soon. And, as issues like transparency, inventory quality, and brand safety continue, brands will keep looking for more direct control over their programmatic ad spend. The good news is that there isn’t one right way to achieve this. Whether by building out programmatic capabilities in house — or through building trusted partnerships within the industry — buyers have opportunities for more control and autonomy.
1IAB, “Programmatic In-Housing: Benefits, Challenges and Key Steps to Building Internal Capabilities,” May 2018
Tags: Buyer, KPI, programmatic buying, Programmatic in house, Seller, transparency