Digital media buying and transparency – should agencies and tech providers be cut out?

It’s tempting for brands to consider an in-house model with one or two tried-and-tested tech stacks. Mitch Waters says finding a middle path is a way to get the best of both worlds.

One of the recent hot topics in digital media has been the discussion of bringing programmatic media buying in-house. While bringing programmatic buying in-house might seem feasible, the complexity and change in the industry makes this extremely challenging for the vast majority of brands.

What is abundantly clear is that many brands are looking to simplify their technology stacks, with the aim of saving money and streamlining processes. The desire for more understanding, control and insight into the complex world of programmatic media buys is another main driver of creating in-house teams.

The rub lies in the fact that the digital advertising ecosystem is ever-evolving and growing in complexity by the day. For brands with diverse global buying needs, there is a distinct advantage in leveraging advisory partnerships with media agencies and tech partners.

For the vast majority of companies, handling millions or even billions of dollars in media spend, across all brands, platforms and geographies is simply unrealistic. Instead, we suggest that brands build even tighter relationships with agencies to gain clarity and control of media spend.

Let’s walk through the three types of programmatic media buyer – a few examples of how brands are approaching programmatic.

 

The student

The Student. This is a company that is interested in getting closer to its programmatic spend by building in-house programmatic knowledge. Their programmatic strategy and operations are outsourced to agencies and technology providers, but they are meeting more frequently with both agencies and demand side platforms (DSPs) on the details of programmatic.

 

The centre of excellence

In this model, a small but highly trained in-house team of programmatic experts works with internal brand managers and advise their agencies and technology providers on how to execute their strategies. This team may have several competencies including media strategy, data experts and procurement specialists to help them manage the process collaboratively. This type of programmatic approach represents what we call the ‘middle path’, or the three-way partnership that allows advertisers to be more hands-on with their media buying without sacrificing the programmatic resources and consultative expertise their partners can provide.

 

The true in-houser

With 100% of programmatic spend being traded in-house, these companies tend to be very technologically savvy. They are often companies with media budgets in the billions, whose revenue is highly dependent on daily customer acquisition numbers. Companies investing in an in-house solution need to have the technological know-how to process and manage internal data for programmatic strategies. On the downside, knowledge will tend to be concentrated on just one or two tech stacks – meaning buyers may miss out on significant impression volume across multiple media sets (more on this later).

 

In-house isn’t as neatly packaged as it sounds

 Agencies offer a specialised skill set that’s extremely hard to hire at scale. Are you located in a competitive media market with dozens or hundreds of digital media buying experts? Many brands are not. If yours is, you may have already learned how expensive these people are. Building an all in-house team is an incredibly costly endeavour. Many brands find that they can achieve the benefits they are looking for by hiring a few programmatic experts instead of a full buying team.

 

The transparency question

It’s tempting, in the name of simplicity, to limit your tech stacks to Google’s various ad platforms or Facebook. I would argue that as a buyer, you need to be focused on finding the technology that objectively looks after your interest, while also allowing you to find and engage with your target audiences across multiple channels.

The importance of objectivity arises when your tech stack is simultaneously a media company. When a business model represents both the buyer and the seller at the same time, it creates an internal incentive that leads to a lack of transparency. Because these players are likely to prioritise their own media, instead of looking objectively across all possible media options, it’s vital to include an independent and objective platform in your tech.

As for my second point: today’s customer makes a fragmented digital journey to buying your product. The journey is almost certain to take them across multiple devices and media channels. Think about your day-to-day media consumption. Do you limit yourself to one social media channel or video platform? I certainly use Facebook and YouTube, but they’re just a portion of my daily media diet of news sites and independent blogs, Spotify, Soundcloud, Stan, etc. In Australia, music streaming alone grew by more than 90% year-on-year between 2015 and 2016, according to ARIA.

 

So, where to from here?

If you are in the midst of or thinking about evaluating your tech stack and media agency relationships, I strongly advise seeking the broadest range of opinion and insight. For reasons I outlined above, for many brands it makes sense for your skilled programmatic agency team to continue to be a strong contributor to the tech stack selection process. With better understanding of programmatic, and deeper involvement in finding the right combinations of programmatic stacks, you’ll be well on your way to assembling a plan that’s creative, effective and efficient.

 

Mitch Waters is a senior executive at The Trade Desk.

 

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