The Netflix guide to taking programmatic ad buying in-house

The complicated ad tech landscape is not for everyone. But for some tech- and media-savvy marketers, it pays to take control. And little by little, some of them are doing just that.

Netflix is one of those marketers. The video giant has built an in-house programmatic team. Kathy O’Dowd, senior manager for programmatic buying in North America at Netflix, spoke at the Digiday Programmatic Summit in New Orleans today about the lessons it has learned — and the considerations brands should make when deciding how deeply they want to control their programmatic ad spending.

“There are many different goals to think about, resources to consider and the culture of a brand,” said O’Dowd, who joined Netflix last November from Publicis Groupe programmatic trading desk VivaKi.

Here are the top tips from O’Dowd for marketers who might want to bring programmatic ad buying in-house:

Consider your experience level
Not all brands have enough experience in programmatic advertising. After all, an Association of National Advertisers survey recently found that 40 percent of marketers had no or very little understanding of the area. For the less-experienced in programmatic, it’s better to rely on external partners, O’Dowd cautioned.

“If a brand is testing programmatic, even if they understand the value of it, maybe it’s not the best time to bring a team in-house, go through all that effort, spend all that money, if it’s not a good fit,” she said.

Programmatic requires people — and that can be expensive
For all the talk of automation, the irony of programmatic is that it still requires people — often more specialized in data and analytics. Such talent is in short supply and is, therefore, rather expensive. Marketers thinking of building an in-house team should consider their spending volume. After all, the cost of an in-house team could make the move not worth the hassle or expense if the ad spending volume isn’t there.

“All the resources that are required to manage a programmatic buy have a pretty significant cost associated with it,” O’Dowd said. “If the ROI isn’t there, go with an agency. Let them take your smaller media spend, do a very good job with it, and set you up for success when and if you’re ready to expand beyond that.”

Decide whether you can link programmatic with all your other marketing
Programmatic, ideally, is far more than simply a buying tactic. But since the practice is still new, programmatic is often set up as a specialized discipline. The risk for a brand is that its programmatic team becomes isolated from its search, TV buying and other teams. That siloed system means a marketer won’t reap the full benefits of programmatic, O’Dowd warned.

“If you bring that team in-house, you have an opportunity to share cross-channel findings, be agile, to do more with programmatic,” she said. “That’s an amazing opportunity to take advantage of.”

Figure out if you really have a programmatic strategy
There is a big difference between strategy and tactics. Much of programmatic is still tactical, such as using site retargeting and standard data sets for ad targeting. That’s fairly run of the mill and not something you need an in-house team for, according to O’Dowd.

The strategic approach, however, uses programmatic advertising to test and learn, continually trying to find a competitive advantage. That can mean tackling difficult questions, such as the true long-term value of a tactic like retargeting. Often, those questions are better handled by a marketer team than by an agency, O’Dowd said.

“An agency is looking to be a good partner, to support a brand, but they’re looking at being able to maintain that relationship for a year, two years — they’re looking at that next contract,” she said. “Your in-house team can come up with these crazy questions. They can run these tests that might be a bad idea. And it can be very successful for the brand to learn what they have to say.”

See video of O’Dowd’s full presentation below.

Netflix Case Study: When and How Brands Should Take Programmatic In-House from Digiday on Vimeo.