Are you sure you want to bring programmatic in-house?
While programmatic autonomy might seem like a dream for some, there's more hurdles to getting there than brands might think, writes consultant Matt Prohaska.
One of the top debates in our industry today is whether leading brands should bring part or all of their programmatic buying practice in-house. This discussion has received plenty of attention and deservedly so – after multiple regional and global reports have found that many holding companies and independent agencies have been less than transparent about fees, data usage, and inventory supply sourcing, a pendulum is naturally swinging to marketers wanting more control over where and how their dollars are being spent.
But I would caution those that are looking to completely “cut the cord” and remove their agency from all programmatic buying duties, since it’s much easier said than done. There are ways to get the desired change and results without going “all-in” and tearing up that agency contract.
At the very least, make sure you have these three key areas under control going forward.
Taking control of your tech
Many large publishers, agencies, and brands are making key decisions right now, including deciding whether to buy, build, or partner with tech companies.
Agencies have spent years partnering with tech. Tech firms have pitched and signed agencies so they could handle programmatic buying themselves. Brands bringing programmatic in-house means they need to contract with at least one DSP, DMP, DCO, TQP, and many others (I made up that last three-letter acronym, but you get the idea.)
You can certainly do all that, but couldn’t you also work with the agency to understand their contracts better?
Taking control of your targets
This should be done regardless of how much you want you end up bringing programmatic in-house. Criteo was founded thirteen years ago now, and Xaxis seven.
Those two firms have done a wonderful job historically leveraging their ability to pool data together and arbitraging digital inventory within twenty milliseconds, knowing more about a brand’s audience than sometimes the brand itself.
Letting other firms pixel your site and retarget your interested existing or almost-customers – in what a previous employer of mine used to unfortunately call “Tag and Bag” – is very 2014.
Realise that true agencies can work with you better to appropriately pool data from multiple clients for the benefit of the client first and agency second, while still making a decent profit. Have you asked your agency lately what their current strategy is for using your clients’ first/second/third party data?
Taking control of your talent
This is the hardest one to do. We always say it is much easier to change tech and targets than changing talent, either with existing teams or bringing in new external resources.
We predicted in 2015 that every major holding company will be almost or completely done with integrating their programmatic buying practices into their “traditional” media teams by the end of 2020.
And we are on our way to seeing that come to fruition, with a few laggards. I find it ironic that the major benefit for everyone in buying programmatically – efficiency – is not realised when brands hire one team at an agency to push insertion orders to publishers, and another team to often buy the same audiences programmatically, either in private or open marketplaces.
Training internal staff and/or recruiting outside talent certain can and is being done. But this is not for everyone for many reasons, including drawing from a talent pool that may not all want to move to your brands’ headquarters.
As someone who grew up in a lovely smaller town, I mean no offence by this, but if you expect everyone on your team to be sitting in the same physical space at company HQ, it might make things harder if your HQ is not in Sydney, or Singapore, or London, or New York, where large pools of programmatic talent have congregated, at agencies and elsewhere.
It certainly can and is happening, but could you also ask your agency how they could better leverage their existing talent to work better for you?
The new relationship between agencies and their clients
I am excited to see major changes happening at agencies around the world, in part because of their adjustments to brands’ new demands for leveraging programmatic.
There will continue to be some relatively short-term pain, but major long-term gains for those agencies that adapt their own strategies and tactics forming better partnerships with their clients in tech, targets, and talent.
Yes, bringing programmatic in-house makes sense for some brands with tremendous success (see Netflix). But it is not for everyone, so we encourage anyone considering it to make sure you ask your agency just one more time before leaving them if they would like to review how they can use these three Ts differently.
Their answer may surprise you, and can lead to a new and better way for agencies and brands to work together moving forward.
Matt Prohaska is CEO and principal at Prohaska Consulting.
Arguably programmatic is pretty close to not needing talent.
Much like high frequency trading – really, talent sets the strategy but not much else.
Media likely to be a much smaller industry going forward because of this.
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Think you’ll find the image used as the thumbnail for this article reflects those used by Mr Timothy Whitfield.
Some originality would be nice.
P.S. nice advertorial
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Hi Henry thanks for your comment – it actually takes quite a bit of human Talent to do it right, unless Publishers want to simply toss their inventory into an Open Auction and get minimal pricing. A little effort goes a long way from the sales and operations teams (and part of why we have trained so many buyers and sellers around the world, including Sydney and Singapore again in August 😉
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Thanks for your comment Mr. Hmmm. Much respect for Whitfield – we didn’t choose the image, so sorry and I agree some attritubtion should go there – we always source, so yes he gets credit. The originality we hope cones from being the first to integrate programmatic into an existig sales team when I was at The New York Times in 2013. Happy to discuss more when I am in Sydney with our team 6-10 August. Thanks
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Has very little to do with high frequency trading (apart from the superficial comparisons).
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Hi Matt and ‘Hmmm’,
I suspect this could be an error at our end. From what I can work out, the original creator of the image is Matthew Freeman, so if we owe him, or Tim Whitfield, any credit or apologies, we definitely offer those up.
The image was in our database from previous opinion pieces, but we have corrected this now and replaced it in case we are accidentally using someone else’s images.
Apologies for the confusion,
Vivienne – Mumbrella
“Arguably programmatic is pretty close to not needing talent.”
By the same logic, 747’s don’t need trained pilots, Formula 1 race cars don’t need trained drivers, and nuclear submarines don’t need trained captains. As ad tech platforms become more sophisticated, more experienced AdOps with more knowledge and more skills are needed. Our campaign managers make 50 – 100 settings decisions when setting up programmatic campaigns, and have to know which variables to adjust and how to adjust them for campaign optimization.
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