Consumer health and pharmaceutical giant Bayer is taking programmatic in-house.
Bayer will partner with MightyHive to in-source its digital and programmatic media planning, buying, execution, strategy and analytics as well as search over the next two years. MightyHive will handle execution for the first year and phase out during 2020, Josh Palau, VP of digital strategy and platforms at Bayer, said during a presentation last week at Programmatic IO New York.
“We are in the process of bringing our media in-house,” he said. “I want our teams to have full visibility into [media] buying and what sectors are providing the highest return to get smarter about how they’re doing things.”
GroupM agency MediaCom has held the business since 2011 and will retain duties for offline media and communications planning for larger strategies and objectives. Bayer spends roughly $500 million annually on advertising as of 2016, according to AdAge.
Bayer began thinking about bringing programmatic in-house in March 2017, when it carved out digital as a standalone team and began hiring people from agency and tech backgrounds. The organization was seeking to drive greater efficiency and effectiveness in marketing, work more directly with platforms and maintain control over customer data.
“The faster you can make decisions, you can capitalize on [programmatic] marketplaces,” Palau said. “Speed to execution is a huge point of what we’re selling this internally to be.”
Bayer also wants to embed programmatic and digitally savvy talent onto each of its brand teams. While consumer health marketers understand digital to an extent, it’s important that they embed digital, programmatic and data skills into their overall process, Palau said.
Bayer has tapped MightyHive to handle media execution while it staffs up on data analysts, technologists and media strategists. The agency, which works with major brands like Sprint to bring programmatic in-house, will be hands-on-keyboards as Bayer builds out its team.
Bayer chose MightyHive because of its proven track record, Palau said, but also because the engagement comes with a hard stop.
“At some point they don’t want us to be their client, and that was important,” Palau said. “If we want to see this vision all the way through, we have to give ourselves a drop-dead date.”
In a recent study by the ANA, 38% of marketers cited cost efficiencies as the top benefit of bringing programmatic in-house. But while cost is definitely a factor for Bayer, it’s not a core reason for in-sourcing, Palau said.
He added that the move shouldn’t be taken as an indictment of agencies in general, or of MediaCom in particular.
“There’s a place in this world for agencies and they’re quite successful,” he said. “But they have to look at the models out there, what clients like myself are doing, and how they blend into that.”
For Palau, the move to in-house programmatic is no longer a trend, but “an actual way business is happening.”
“Big, old companies are doing this,” he said. “When you have years of historical holding company relationships and you’re starting to bring things in, be it media, creative or planning, it’s not a fad anymore.”