Why Bringing Programmatic In-House Isn’t an All-or-Nothing Choice
Bringing programmatic in-house is an increasingly popular move for marketers looking to gain more control and transparency in their media campaigns. But, the question of whether or not to ultimately take programmatic in-house doesn’t have to be a binary choice.
While some brands may succeed in bringing 100% of their programmatic in-house, others may fair better closer to the middle of the spectrum, by defining the media spend and objectives in-house but outsourcing day-to-day execution and specialized expertise to an agency or digital partner. The range of in-housing options is limitless, but three typical points on the in-housing spectrum include:
- 100% Collaboration – Brand, programmatic agency and ad tech partners work together on all aspects of media planning, buying and analysis
- Shared Success – Some needs remain in-house (such as setting the media budget and identifying success metrics), but others are outsourced to an agency as needed (such as media planning and buying, measurement and reporting, and specialized skills and expert consulting) to ensure everyone is invested in a shared win
- 100% In-House – All programmatic tech, planning, buying and analysis is done by in-house teams
Questions to Consider
Marketers may want to take all or some services in-house for many reasons. But, before deciding if bringing programmatic in-house is the right solution for your organization, answer these important questions and gain some perspective around if in-housing aligns with your long-term marketing goals.
What marketing services are you looking to bring in-house?
In-housing means different things to different people. In a recent report from the Association of National Advertisers (ANA), nearly eight out of ten marketers use an in-house agency. Yet, fewer than one quarter said they in-housed programmatic services, proving the importance of defining what type of in-housing you’re really considering – and also proving the importance of working with an expert or specialized partner in the programmatic space.
What’s your plan to source and retain programmatic talent?
People with programmatic skills are scarce in most markets, but if you do convince them to come aboard, make sure to create a clear career path for continual growth and development. Agencies can hire brilliant people and continually give those people new opportunities to learn and grow across different verticals. So, finding the right people with the right skills who will stick with your company for the long term may be a challenge.
What have you done to level up your team’s skills?
If you already have people on your team who do some online marketing, don’t assume they can also do programmatic well. Programmatic trading requires different competencies and training from other marketing roles. Simple setup mistakes, like forgetting to set your budget cap, can be crippling to an advertising budget and a drain on your team’s morale. Having an expert in-house is nice, but your programmatic team needs to be far more robust than the trading arm in order to manage relationships with ad tech companies, negotiate contracts, analyze data, monitor and test emerging tech, and develop advanced algorithms for the long term.
How will you keep up with industry trends, technologies and tactics?
The research tools, resources and volume of advertising necessary to keep up to date on the latest trends and products require big budget and time investments. Competition is fierce in digital marketing and staying innovative month after month is key. Without the daily cross-advertiser insights and cross-industry analytics coming in from an agency or market research intelligence, your campaigns and your team’s skills will stagnate and your competitors may leave you in the dust.
Programmatic requires advanced data science and tech, so how will you integrate those?
Performance-enhancing algorithms, like supply-path optimization, are a must to mitigate challenges with fraud, frequency capping and attribution. Programmatic is complex, and not all inventory is created equal. DSPs have basic settings available, but going beyond a DSP’s baseline algorithm with artificial intelligence is the new standard to unlock high-quality inventory, avoid fraud-ridden sites and access powerful insights to make your campaigns more effective. Just as important is to make sure your tech systems integrate with each other and existing infrastructure. If you have siloed platforms, data and measurement, your strategy will be inconsistent and lead to major operational headaches.
Do you have alignment at the C-level?
Ramping up an entire department isn’t cheap, but it takes a team of people and resources to do programmatic right. As soon as you start scaling your head count, you’re going to raise red flags and look like a cost-reduction center to your CFO. Every leader in the organization needs to understand and buy into your vision. Without enterprise-level alignment, your invaluable data scientists, researchers and analysts might be co-opted by other departments, which could jeopardize the success of your advertising efforts.
Do you have the budget to justify in-housing?
Analysts recommend that marketers should plan to spend at least $20 million per year on digital advertising before they consider bringing programmatic in-house. Strong buying power is required to compete in the programmatic marketplace successfully. Plus, the costs for technology, data and talent need to outweigh the spend to bring programmatic services in-house. Basic media planning, data management and reporting tools will run you over $250K each year. Then, you’ll also have DSP fees and staff salaries to pay out before you even spend one dollar on working media.
Brands Doing In-Housing Right
Netflix, EA Games and Wayfair have all seen success bringing programmatic in-house. What do all three of these companies have in common?
- They are brands that lean in on technology, and technology is at the core of their business
- They execute and maintain a strategic, comprehensive data strategy
- They have significant budgets that justify the time, effort and costs to take programmatic in-house effectively
If you fancy yourself like one of these companies, ask yourself: Are you good at hiring data scientists because you will need a minimum of two or three solely focused on media to do this right. Are you also committed to hiring multiple engineers to build and maintain your ad stack? These are important questions, but the most important to ask is this: Do these investments help you to deliver on your brand promise to consumers? If you answer yes to these, in-housing may make sense for your brand. But remember, even these brands struggle at times from siloed thinking and a lack of the cross-industry insights and expertise agencies deliver.
Before making any big decisions, make sure you have the right people, processes and programmatic tech to address these questions. And whether you’re looking for support on the path to in-housing programmatic or a partner to take the reins, we are here to help. Reach out to us to find out more about the complex nuances to bringing programmatic in-house.