Yet despite all the recent hype, marketers still value their trading desk relationships, said Richard Joyce, a senior research analyst at Forrester, who formerly worked at Omnicom and Interpublic trading desks.
He cited an ANA-commissioned Forrester report showing 86% of marketers reported they haven’t eliminated or reduced agency responsibilities despite having their own in-house programmatic capabilities.
Still, one plausible outcome of the ANA report is that it spurs advertisers to reduce their dependence on the external trading desk altogether.
“We are already seeing marketers create more direct relationships with ad tech,” Joyce said. “If that trend continues, you’ll start to see agency trading desk fees decline, since those fees take into account the tech fees that they would typically have to pay. Marketers will want to pay agencies and their desks for executional services vs. service plus tech.”
The current relationship between the holding company, the agency trading desk and their vendor partners is a tough one to unpack.
One US agency cited a companywide mandate six years ago requiring programmatic spend over a certain threshold automatically go to the trading desk rather than third-party ad networks, according to a former digital investment exec that K2 interviewed.
In another instance alleged in K2's report, after one advertiser audited its agency's trading desk, it decided to build its own.
But some advertisers aren’t at the level where it would make financial or operational sense to build one’s own private trading desk or to issue their own RFP for third-party tech since this has historically been the agency partner’s purview.
Since the agency may have one or several “preferred” vendor partnerships (with details of arrangements cloaked within a services agreement), more often than not the preferred vendor would automatically win that business.
One former ATD exec argued the ATD model can be tailored to an advertiser’s needs. For instance, an advertiser can pay a flat rate to meet specific performance objectives as opposed to a volume-based percentage of media spend. (Advertisers, however, had been reluctant to pay tech subscription fees to certain buying platforms).
But whether pricing is CPM-based, flat fee or charged as a percentage of media, marketers should demand transparency into what constitutes those terms, Joyce said.
“If anything, as an advertiser I would talk to the vendors about self service fees vs. managed service fees and what goes into those for the vendors,” Joyce said. “ATDs have to be doing a lot more for you as an advertiser to warrant anything higher than the difference between those fees.”
Although Wieser doesn’t predict some big marketer migration to build programmatic trading units in-house - at least in response to the highly charged report - “advertisers know one of the factors that contributes to the solution is to be more involved in the vendor selection process and run billings through themselves,” he added, where even on the ad tech side, “no DSP gets kicks without the marketer getting actually participating in that diligence themselves.”