Today’s column is written by Brian Stempeck, SVP of Strategic Business Development at The Trade Desk.
About three times a week, I hear the same question from presidents, media directors or technology directors of various mid-sized agencies: “Should we be building an agency trading desk internally?”
It’s a very real strategic question a lot of agencies face right now. Here’s how I’d weigh the decision.
What’s The Business Case?
A quick look at the financials of a publicly traded ad network makes a pretty strong case for why agencies are considering bringing media in-house. Take Interclick, for example, prior to its acquisition by Yahoo. In 2010, Interclick logged $101 million in revenue. Of that, it paid $58 million to publishers, leaving $43 million in gross profit, or a whopping 42.6%. Dang! Most agency media teams I know aren’t charging fees anywhere close to that, and even fewer realize how profitable their IOs have made the ad networks.