The price of entry for programmatic

Nikki Retallick
By Nikki Retallick | 13 August 2014

Last month, Carat's Paul Brooks wrote about the programmatic challenge and which buying model is the right one. Here, Adap.tv's Nikki Retallick has her say on the issue.

The automation of digital media buying has been on the rise for a number of years and the benefits of programmatic and RTB are highly documented. As part of its natural evolution some of the more experienced and confident brands are ready to go it alone with a client-side trading desk. So, is this a good idea? In two words, it depends.

The first thing to consider is cost. Many agency heads see a move to programmatic trading as an expensive undertaking. Yet many brands are already running elements of digital marketing in-house, such as SEO, paid search, Facebook marketplace and some affiliate marketing. Adding a biddable display and video component is the natural next step. It will require training because it’s a slightly different media planning skill set, but most vendors offer flexible agreements, from a fully managed service to ad-hoc support for self-serve accounts.

The transition doesn’t have to happen at once. Just as with most agency trading desks it can be built gradually over time, so staff acquire skills, rather than the agency buying in top talent at the outset. Meeting with some of the leading demand-side platforms will give a good understanding of key planning considerations.

The direct response elements of display would be a good place to start, giving you the best chance of an early ROI that will outperform the previous agency or agency trading desk arrangement. Headcount, media costs and agency fees should offer savings to offset the resource cost, but allow a grace period. You probably won’t see all the benefits on your first campaign.

Having the right skill set is critical. In-sourcing advertising that can be automated through software makes perfect sense, but there are risks. Media dollars can be wasted with the click of a button. It requires keen attention to detail and tactics are learned and refined over time. Navigating through the process requires smart marketers who are able to quickly learn new skills. They’ll also need a supportive and collaborative environment where they can access the right information and feel empowered to test and learn. That’s why tech savvy, data orientated businesses are obvious candidates for an internal trading desk – they’ll have the experience already in place.

Having great data also helps. Being able to apply it directly through a programmatic platform will power more informed, tailored and accurate marketing. It also provides a greater opportunity to share cross-channel findings, be more agile, and experiment more. Richer client data married with programmatic channels and combined with multi-touch attribution, will allow campaigns to broaden from an acquisition focus to marketing that optimises lifetime customer value or customer reactivation.

Whilst media agencies are becoming more like data companies, there are still certain data sets brands won’t want to share – another reason to bring the technology in-house. In fact, this is the crux of the matter. Greater control over data and technology relationships, for clients who have the scale to have their own deals, allows for greater transparency and freedom.

But client trading desks are clearly not for all. Spend levels need to be significant and consistent for an in-house team to deliver ROI. Like most things in life, when learning something completely new it helps to take the first few steps with someone holding your hand. Those brands that have not yet started out on their programmatic journey should look to their media agencies to get them acquainted. Similarly, those who have done some testing but are not convinced it’s for them in the long haul should continue to invest and learn with the support of their agency.

However, for those brands that already have some elements of their media buying executed internally and have witnessed first-hand the benefits programmatic has to offer, why not take the next step? Technology should be making things easier. If all we’re doing is adding layers of complexity, then as tech providers we have failed.

Ultimately the discussion about where the trading desk sits should be focused around control over data, technology, existing trading partnerships and transparency, rather than disintermediation of the agency layer.

For these larger and more experienced brands who are ready to take the next step in digital trading, their media agencies will likely play a big part in helping them facilitate this. However, the more transactional ‘insertion order style’ business is ripe for programmatic transformation and those closest to the customer data are in a great position to pull this off.

Nikki Retallick
Senior director of client strategy
Adap.tv

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