Does the rise of automated ad buying spell the end of the media agency? Ilona Lubojemska, Director of Client Services at The Trade Desk looks at the trend of brands bringing programmatic in-house.
More money than ever is being pumped into programmatic advertising. The latest research from the Advertising Association and Warc revealed that digital advertising is the main driver behind the increase in the UK’s ad spend- with mobile alone growing by 30.7% in 2017/18. And so long as digital advertising keeps growing, the industry will speculate on who is best positioned to manage campaigns and campaign spend.
Consequently, much has been made of brands bringing programmatic media buying in-house. A survey of marketers working at 35 multinationals, conducted by the World Federation of Advertisers (WFA), has found that a fifth (18%) have employed an in-house programmatic specialist, while another 18% have plans to do so.
Some have taken such research to spell the end of the media agency, but this simply isn’t the case. Programmatic may be getting more in-house resources, but in doing so, it elevates the agencies and tech platforms with it.
Busting the myths of in-housing
I want to break down the misperception about what brands in-housing actually means. Let’s consider the number of people involved in fully executing an ad campaign from beginning to end. It’s a lot of people, with a huge amount of specialist knowledge that is almost impossible for brands to replicate. Add agencies’ ability to achieve economies of scale when it comes to media buying, and their value is sold.
As a result, very few brands are actually executing ad campaigns themselves. What brands are doing is getting much more involved in the programmatic part of their campaigns. Advertisers want to understand what programmatic means and how it works – and they’ve been doing their homework to do just that.
As brands hone their in-house programmatic expertise, they are better placed to navigate the supply chain – from joining negotiations with the big publishers, to picking and choosing the tech partners they want to work with.
Brands are also getting savvier about their first party data. The beauty of programmatic is that it’s not just about buying media, but gathering audience insights too – and brands are harnessing these insights with their tech partners to inform advertising decisions.
Innovative CMOs are close to their tech
Inevitably, as brand marketing teams focus more in programmatic, skill sets are forced to shift. Take CMOs, for example: a traditionally media-focused role, today’s CMOs have had to become a little nerdier to accommodate the more number-focused, technological parts of their job – tasks that would usually fall to the CTO. That doesn’t change the mission that’s baked into every CMO’s bones, though; to reach the right people, at the right time, with the right message.
And it’s not just CMOs that are becoming tenacious about tech. More and more, procurement managers are hired by brands from digital or agency backgrounds. This brings a greater understanding of the value of digital advertising and agency partners – it’s no longer just a question of pursuing the most cost effective option.
Tech platforms take a seat at the top table
Today, both agencies and tech platforms are taking a seat at the top table, playing increasingly consultative roles to help brands make more strategic decisions about their digital advertising.
As brands’ relationships with their agency partners evolve, this has a knock-on effect on the role of technology platforms too. With greater knowledge comes greater curiosity, and advertisers are inevitably taking a greater interest in what’s going on further up the supply chain. Many brands are regularly meeting with their DSP partners to work closely with them on digital strategy.
Much has emerged from the fundamental misunderstanding over what brand in-housing really means for the ad industry. Brands’ piqued interest in programmatic demonstrates a commitment to great advertising – and is a testament to how the industry is maturing. Brands are investing in resources to engage in a more robust way with technology partners and agencies which yields results and competitive advantages.
By Ilona Lubojemska
Director of Client Services