For years, brands have grappled with questions about which agency model is the best fit for their business.
When it comes to programmatic, however, a new survey recently released by Advertiser Perceptions indicates that a growing number of brands are hoping to bring their efforts in-house.
According to Advertiser Perceptions DSP Report, which polled more than 700 advertisers, nearly a third (32%) of those surveyed say they plan to bring their programmatic buying in-house.
And it looks like many agencies apparently aren’t going to stop them from doing that as the majority of marketers and agencies polled revealed that they believe programmatic ad buying will eventually become an in-house responsibility.
The reasons behind this are not surprising: brands are increasingly concerned with ad fraud, brand safety and verification. As Uber’s recent lawsuit against one of its agencies demonstrates, these issues are difficult for brands and agencies to navigate and when something goes wrong, the fallout can be ugly.
There’s also the issue of cost and how agencies are paid. Specifically, brands have become aware of agency kickbacks and double dipping, and for obvious reasons, they don’t like it.
What needs to happen for programmatic to move in-house?
Of course, bringing programmatic in-house will require more of brands in the following areas:
Knowledge of programmatic has improved considerably in recent years but before brands can bring programmatic in-house, they will need to honestly and accurately assess how much knowledge of programmatic exists within their marketing organizations and not only ensure that they have enough to support programmatic in-house but establish plans to grow and disseminate that knowledge throughout the marketing organization.
Programmatic can be complex and the processes that support programmatic efforts can’t be done without ample people and technology resources. This is especially true for brands that expect their in-house programmatic operations to perform better than agency operations.
People and technology resources both obviously require an investment of dollars and brands should keep in mind that even with dollars, staffing can be a challenge because there is a shortage of skilled and experienced programmatic professionals and many of them are concentrated in a small number of geographic regions.
Vendor relationships and partnerships.
Brands that want to bring programmatic in-house will need to establish direct relationships and partnerships with vendors that supply technologies and services related to programmatic. From attribution modeling to data management platforms (DMPs), there are a whole host of external vendors that brands will need to line up to bring programmatic in-house.
Is an in-house shift really going to happen?
Some brands might have a reasonable rationale for wanting to bring programmatic in-house and have the substantial resources necessary to make the investment, but even then, there are few examples of brands actually doing so. For example, when L’Oreal made headlines about this last year, it was clarified that its initiative was actually a “strategic partnership with our media agency supporting our decisions, the operations, technology, and relationships.”
So for the time being, while nearly a third of brands say they plan to bring programmatic in-house, there’s no reason to believe that number will be achieved any time soon.
Subscribers looking to learn more about programmatic can download The CMO’s Guide to Programmatic