Is Bringing Programmatic In-House Right for You?
Modern brands want more control over their advertising — and they deserve it.
In a recent Infectious Media study, 84 percent of surveyed brands expressed a desire to tighten the reins over their programmatic advertising, with 63 percent saying their current situations did not provide adequate data transparency. Combined with brands’ reported struggles with publisher relationships and financial transparency, it makes sense that some would consider bringing their programmatic marketing in-house.
A number of companies have made this shift. For brands entertaining notions to do the same, know that taking control of programmatic marketing isn’t as easy as it sounds. An Interactive Advertising Bureau study revealed that 65 percent of marketers who purchase programmatic ads have moved some or all of those operations in-house. This migration can take up to 18 months to centralize data, set up technology, sign contracts, and hire programmatic experts. Some companies find the challenge to be too steep, with 13 percent of brands moving back to outsourced programmatic tactics after internal tests.
Despite the barriers, brands that transition to in-house programmatic advertising enjoy myriad benefits. To complete that transition successfully, marketers must understand what to expect and how to avoid common pitfalls.
Obstacles to Programmatic Control
Companies outsource programmatic more than any other marketing function by a wide margin. However, as more marketers begin to understand the nuances of programmatic strategy, its momentum within the advertising industry is starting to pick up. In a 2017 study by the Association of National Advertisers, 35 percent of respondents said they had improved their in-house programmatic abilities, more than double the number from the 2016 study.
Still, the challenges to fully integrating in-house programmatic remain daunting for most companies. Some brands don’t anticipate significant savings from the switch. Others see the enhanced control of an in-house approach as a quick path toward profits.
Executed properly, in-house programmatic offers several advantages over outsourcing, but only if the migrating company gives the switch the respect it deserves. These operations require at least a full year to complete, including the time necessary to find and onboard the right talent.
During this switch, the most successful companies tend to focus on getting a firm handle on their data. Disorganization makes it difficult to handle any marketing task, let alone a complex one like programmatic, but proper data management can turn a frustrating struggle into a lucrative opportunity. Better data practices, combined with the right technological tools and partners, solve many of the common problems encountered during the adoption of programmatic responsibilities.
How to Bring Programmatic Home
Brands ready to take control of their programmatic advertising should focus primarily on three areas: data organization, existing marketing environment, and tech stack.
1. Data Organization
Most marketing initiatives rely on high-quality data to succeed. Programmatic depends more on data than perhaps any other strategy. Bad data management leads to poor programmatic implementation, while great data management yields consistently successful results.
When travel booking site Kayak brought its programmatic in-house in 2016, it needed a way to track the cost-per-click buys and sells it made from competing sites. It eventually settled on MediaAlpha, which handles CPC transactions specific to meta and native search engines and helps clients maintain transparency. With MediaAlpha, Kayak’s campaign ROI jumped 120 percent.
Marketing teams will need access to all the customer and analytics data they can to identify the most profitable tactics for improving programmatic. While third-party programmatic providers can’t access all company data, internal marketers can, which means better insights and faster responses to shifting markets.
2. Existing Environment
A company’s already-in-place infrastructure and priorities provide the foundation for how it should best integrate programmatic advertising. To understand how that infrastructure could influence programmatic adoption, assess how current digital advertising affects marketing goals, then identify opportunities where programmatic could increase effectiveness.
Netflix’s continued push to enhance its library of original content prompted the streaming service to increase its programmatic ad expenditures. Projected to pour $2 billion into its 2018 programmatic budget, Netflix explained to shareholders that its goal was to use programmatic to “do individualized marketing at scale and to deliver the right ad to the right person at the right time.”
Netflix shows that every move has a cost, but it’s important to understand that not every potential gain is worth the price to achieve it. Companies will need to take stock of their current third-party programmatic spends and compare them to the expected gains of moving in-house. This means accounting for downtime, internal resource reallocation, new staff, and other factors pertinent to the move. If the numbers don’t add up, implementation will either need to be adjusted — perhaps made more of a hybrid approach with existing providers — or alternative solutions to programmatic spend will need to be explored.
3. Tech Stack
Programmatic advertising is a highly technical marketing tactic. As such, it requires a tech stack that can handle the load.
One way to “try before you buy” is to test tech stack partners via managed service first. If successful, move toward self-serve and continue testing and refining the approach to measure programmatic gains. Remember that data likely exists in multiple formats on multiple platforms, and you’ll need a vendor (or vendors) to help orchestrate all of it.
Above all, set expectations about the support relationship before entering into a new partnership with a tech provider. When do fees come into play? Where does the company’s responsibility end and the partner’s begin? The clearer the initial expectations, the more successful the relationship will be.
While these three components are not the final word on in-house programmatic, companies that get these factors right start off on the right foot. Combined with the right team of ad tech talent, the switch to in-house programmatic is not only possible — it’s profitable.
This article was originally published in adotas 9/19/18.