This year has seen an increasing number of marketers investigate the option of moving programmatic ‘in house’. Over the last few months Programmatic Media has spoken to advertisers at different stages of this transition and summarised their responses as ‘fuel for thought’ for fellow marketers.
It is a snapshot of experiences - the good, the bad and the beautiful.
The reasons behind the ‘in house’ decision are a combination of both the emotional and the rational.
On the emotional side there is enormous frustration with a secretive service kept at arms length from the marketing team.
Against the backdrop of P&G’s well publicised concerns this lack of engagement and transparency fuels suspicion and doubt.
There is an uncomfortable sense of losing control.
On the rational side are practical considerations around financial management and brand safety.
Below is a list of the 10 benefits reported across all advertisers. Not all of these were relevant to every advertiser, there were usually three or four of primary importance:
1. Transparency – peace of mind through visibility across all elements of programmatic activity.
2. Control – the capacity to make informed value judgments for themselves on technologies, publisher environments and the mix of campaign activity.
3. ‘Closing the gap’ – in some multinationals there is a buffer between marketers and the programmatic team at the coalface. Marketers are frustrated by agency personnel acting as intermediaries and the resultant inability to become more involved in campaign activity.
4. Speed of operation – with an internal in house team there is no buffer, no barrier to communication. Campaigns can be implemented faster, more efficiently and performance more immediately assessed.
5. Brand safety – Protection of the brand is a marketers primary responsibility. Few marketers are actively involved in the creation of white list, blacklists and the safety filters of programmatic campaigns. An ‘in house’ operation helps mitigate this risk.
6. Inventory selection – Multinationals sometimes overuse publishers with whom they have volume based arrangements. ‘In house’ delivers purity of selection. The most impartial and agnostic agency selection can only ever match the value based decisions taken by an ‘in house’ team.
7. In campaign optimization - ‘in house’ allows campaign review and optimisation on a weekly or even daily basis. Some marketers receive a plan at the start of a campaign and a sketchy post report long after the event. Minimal changes are made across the duration of the campaign. A ‘set and forget’ approach rarely achieves the best results.
8. Technology control – multinationals licence technologies and/or buy equity in platform providers . The same technologies are invariably used across all of their client base. Technology selection based on an advertiser’s individual needs ensures value based decisions at competitive prices.
9. Data security – Security concerns around first party data will increasingly influence the decision to transition to ‘in house’.
10. And lastly there are the savings. The case to move in house often requires a commitment to finance and senior management of the savings that will eventuate. The figures to which we have been privy are between 20% and 30%.
With the number of variables in play across a fluid and dynamic market, the ability to accurately measure savings is questionable.
Once transitioned those with ‘in house’ teams place less emphasis on savings, of greater value is the successful integration of programmatic into a co-ordinated programme of customer connection.
A long list of up to 10 benefits presents a compelling case there are however four significant issues to counter these benefits each of which requires careful consideration:
1. Internal management – aligning internal stakeholders takes time and careful management. This is particularly problematic for larger advertisers with siloed teams operating across different markets.
2. Competitive pricing of inventory – there are two aspects to manage. Securing parity pricing when the break from the agency is made, then ongoing awareness of market dynamics to ensure competitive pricing is maintained.
3. Keeping abreast of technologies – New opportunities are launched every week. The tech train is running at full speed with technology providers fighting for market share. An advertiser now in control of their technologies will be aggressively pursued. From a marketers perspective it can be overwhelming. Working through the options to determine those that could be of value is time consuming and requires a level of expertise few possess. New options can’t be ignored, a ‘set and forget’ approach will inevitably lead to lost opportunity and diminished value across time.
4. Staffing – Programmatic is a growth market. Supply is struggling to keep up with demand. Anyone with 18 months experience in programmatic considers themselves as experienced. And of course nearly all of those with experience are millennials. Not the easiest group to secure and keep. Working for an ‘in house’ team away from the vibrancy of agency lacks appeal for some.
Staffing was reported as the number one issue for all those surveyed.
In summary, there was widespread agreement that transitioning to ‘in house’ is neither quick nor simple with unforeseen issues to manage at every stage. However despite this not a single advertiser was considering a return to the agency service of old.
For those who have taken the plunge the benefits outweigh the issues. Next year beckons as the year of programmatic enlightenment.
Marketers looking for greater control and value would be well placed to investigate the ‘in house’ option.
Stephen Wright is a director of independent advisory Programmatic Media.