Marketing TechnologyDigital AdvertisingBrands are moving to in-house programmatic: Is it the right choice?

Brands are moving to in-house programmatic: Is it the right choice?

Nearly 40% of advertisers now execute in-house programmatic, new report shows. What's behind more companies moving this way, and is it the right choice?

For years, programmatic has been a must-have in the ad industry, offering a quick and typically cost-effective avenue for automated ad buys and placements. While this advertising tactic has been historically handled by media agencies, brands are more and more looking to bring this branch of their overall ad strategy in house. In fact, a new IAB report shows nearly 40 percent of advertisers execute in-house programmatic trading and even 50% of publishers now have an in-house model.

What are the reasons behind why more and more brands in 2018 are taking programmatic into their own hands? Transparency, fraud avoidance and data protection are just a few of the reasons pushing brands to this move, but let’s dive into each of these a bit more:

Programmatic isn’t the new kid on the block anymore

“Programmatic” has seemed to be one of the buzzwords of the last few years. Appearing at every major marketing or advertising conference and finding its place in the tech stacks of every adtech company. And for that same amount of time, brands have put their programmatic ad sales/buys fully in the hands of media agencies.

However, advertisers no longer simply understand the promise of programmatic, they have also had some time to verse themselves in the ins and outs of how programmatic buying and selling actually works, making them more inclined to pivot away from external media agencies and handle the campaign strategy in-house. More effort is going into learning what data and technology is necessary to bring programmatic ads in-house, and more companies are looking to hire staff who have the know-how to carry out all the functions an agency would handle.

Backlash on programmatic placements

The lack of control brands has felt with this approach has led them to put themselves in the driver seat of their programmatic ad placements. The control they are ultimately seeking is where the ads are running as many brands have uncovered their commercials juxtaposed against unsavory content. YouTube has undoubtedly suffered the most in this regard, with many brands boycotting the platform after finding their ad content alongside videos from extremist channels. This backlash has caused them to roll out stricter safeguards for brands, and claims they’re now working to tackle more immediate concerns like transparency and measurements.

To this point, transparency and accurate metrics are undoubtedly the biggest concerns from brands across the board aside from brand safety. Especially in light of data scandals and skepticism around accurate metrics rocking both Facebook and Google, brands, more than ever, have a heightened sensitivity around where their ad dollars are going and the results they’re getting from the money spent.

Even taking brand safety and transparency off the table, fraud remains a major concern for brands when it comes to programmatic ad buys as well. Due to the open exchange structure of programmatic buys or sales, there is an increased chance for bots to upend the process and cause sizable financial loss. In fact, the 2017 Bot Baseline Report revealed that the economic losses due to bot fraud were estimated to reach $6.5 billion globally in 2017.

Protecting customer data

Personalized data is certainly king for ad targeting purposes, and programmatic ads are only as effective as the data they use. But if we’ve learned anything this year, it’s that consumers are being more protective of their data than ever. Especially for brands that must be wary of GDPR-mandated regulations, companies must be explicit about how they plan to use their customers’ information.

It is hard enough getting customers to consent to companies using their data for their own purposes, let alone to share with a third-party media agency. With audiences already skeptical of how their personal information is being used, why then overshare it with agencies? In-house programmatic teams eliminate the need to outsource data to a separate media team, allowing marketers to keep their customer’s personal data out of the hands of multiple parties.

Is in-house programmatic the right choice for your band?

While many of these concerns may make the case for a brand to jump ship and bring programmatic advertising in house, it is absolutely essential marketers know exactly what their ultimate goal is for putting programmatic back into their own hands. For example, if a brand is simply looking to purchase media in a more effective way, in-house programmatic could be a manageable task for their team.

However, if a brand is looking for a more holistic programmatic strategy, it’s important for marketers to grasp the steps involved in recreating what a media agency would be able to do. From building out a full programmatic tech stack to staffing resources to data management moving forward, brands looking to fully bring programmatic in-house are tasked with a hefty lift.

In all, programmatic ads are not going away any time soon, but brands have the choice whether they want to outsource or manage the tactic themselves. Should in-house programmatic be something a brand is looking to take on, it’s important they first know what they’re getting themselves into and understand all the necessary pieces of the puzzle to make it happen.

Mark Gorman is CEO of Matrix Solutions.

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