Answer These Questions Before You Bring Programmatic Buying 'In-House'

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marketers-note"Marketer's Note" is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O'Connell, Director of Research, AdExchanger.  

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A recent survey noted a majority of CMOs are considering taking programmatic buying in-house (AdAge story), If you're like me, you absorbed this study with both interest and leeriness.  On the one hand, I find this really encouraging, as it’s a strong indication of the draw of – or, on an even more basic level, an understanding that there is such a thing as – programmatic at the highest levels within marketing organizations. On the other hand, it raises all kinds of questions – about the evolving role of agencies, about the future of “agency trading desks,” about what it means to be in the service business, and certainly, by extension, about the composition of tomorrow’s marketing organization.

Having worked in digital media from inside an agency and out, and having some experience building a programmatic buying team (to be clear, within an agency – Razorfish, in my case), below are a few questions I believe marketers should consider as they are weighing the decision about whether or not to take programmatic media management in-house:

  • Do I want to manage every aspect of programmatic buying? Or just some of the more strategic aspects? For example, do I want to take on some of the unglamorous back office tasks such as billing and reconciliation? Would I want to outsource that piece of the process to my technology partner’s service arm, or find a technology provider that has those functions fully built into its system? Alternatively, is my goal to take control primarily of the more strategic work, such as developing and implementing critical buying strategies? (e.g. the segmentation scheme I use in remarketing, my existing customer suppression strategy, etc.)
  • Do I want to be responsible for striking and maintaining partner deals? And if yes, which kinds? Inventory deals with key publishers, exchanges, SSPs and the like? Technology deals with demand side platforms (DSPs), ad servers, dynamic creative optimization technologies, etc.? Data deals with 3rd party data providers? If no, how will I think about vetting potential partners on their ability to manage these things for me?
  • Am I looking to take over display? Or will this apply to all programmatic channels? If it’s about more than display, will I need channel specialists in-house for video, mobile, paid social, internet radio, paid email, addressable TV? (I’m sure I’ve forgotten something!)  Will I want to work with a single technology partner for management of all the relevant programmatic channels, or will I want to work with individual best of breed platforms? If the latter, what is my strategy for stitching all those disparate data streams together?
  • Do I want to dump “agencies” completely, or do I just want a different kind of “agency” support? Is the goal to excise layers between my dollars and the end media? Or am I looking to make my programmatic media more effective and/or more strategic relative to what my current agency is doing? Is my frustration with my agencies limited to programmatic media? If yes, might I benefit from working with an independent programmatic specialist (think Accordant Media, Goodway Group)?  Conversely, if I do opt to take my programmatic media management in-house, how will I liaise with my remaining agency partners for the development of coordinated programs (e.g. the custom brand experience built and managed by the agency relative to supporting programmatic media)?

This is by no means meant to be an exhaustive list of questions marketers should be considering, but rather to get the juices flowing on all the things that should be considered.  That said, perhaps the over-arching questions are: 1) How many, and what kind of, staff will I need in-house to be as effective as if I continued to outsource everything? and, 2) What is the cost benefit analysis of taking everything in-house relative to out-sourcing some, or all, aspects of programmatic?

One final thought: I wonder if part of the problem is that agencies haven’t done an effective job helping their clients understand the real nature of programmatic – what and who is involved and why, what it looks like when done poorly versus when done well, etc. – leaving a whole lot of marketers on the outside of the conversation looking in, thinking, what’s going on inside there??

As always, I welcome stories, comments and questions on this topic!

Joanna

Follow Joanna O'Connell (@joannaoconnell ) and AdExchanger (@adexchanger) on Twitter. 

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2 Responses to “Answer These Questions Before You Bring Programmatic Buying 'In-House'”


  1. Bill Guild says:

    Very insightful look at a real trend. I would suggest that those considering bring programmatic in-house also consider the impact of giving up the freedom to jump around. When placing buys through programmatic buying partners, marketers are completely free to test and switch at will. Most include multiple programmatic partners on their plan. Agency trading desks are increasingly supporting more than one programmatic platform, so even locking in to one agency won't prevent testing and switching. Marketers should consider the cost of supporting more than one platform, or accepting the opportunity cost of choosing one.

  2. Celia Wu says:

    Thanks Joanna for this insightful piece, as usual.  When I read this I thought, wow, the same points you make could hold true from a publisher perspective in not only leveraging programmatic, but the entire revenue barbell.  These two points ring true:  1) publishers know what they want to achieve in the revenue mix but are resource challenged; 2) publishers will benefit by taking back control of who has access to their inventory and going more direct to demand.  Both are ample problems, but bode for ample opportunities for those strategic minded publishers who are thinking long term on their revenue strategy.

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