For brands, taking programmatic trading in-house is tough.
Some see it as an opportunity to cut costs and take greater ownership of their customer data. For others it is a way to leapfrog media agencies they no longer trust to give them a solution that’s best-in-class. Sometimes, it is all three.
But those brands with the budget to consider their own solution are also the brands that have sprawling media teams spread across time zones. Getting programmatic on the agenda and being consistent with it are challenges.
In the latest installment of our Confessions series, where we grant anonymity in exchange for candor, the head of media at an international brand spills the tea on the reality of making the switch.
Responses have been lightly edited for clarity.
There’s been a wave of criticism around how media agencies bill their clients on programmatic buying. Is this fair?
It’s very fair. Why do they have technical alliances with certain partners and push you down that route without offering an alternative? You get a one-dimensional view of the technology and most advertisers do not have sufficient knowledge to query the offering. If you go for an agency trading desk, the tech is bad, the algorithm is bad and there can be little transparency.
Sure, there are programmatic specialists outside the big agencies who are very good. But if you go down that route, you’re splitting responsibility for strategy and execution from the parent strategy. That’s quite tricky as you’ll have friction between your agency of record and those third parties.
Hence why certain brands are looking to manage programmatic buying in-house. How feasible is that?
It depends what you mean here. Building your own technology solutions is nigh on impossible because the cost would be completely prohibitive both from a technical development point of view and employing the people to build and maintain it. That’s not on the agenda. There are too many moving parts. Where you can take something in-house is if you license technology and employ people to manage it.
So what actually happens?
Most advertisers start off with a self-liquidating solution that cuts out the ad networks as you can buy the same media programmatically considerably cheaper. But that only lasts for a limited period of time. Once you’ve made that initial cost saving, you have to decide what you do with programmatic going forward. It goes from being a pure efficiency solution to a relationship-based marketing solution where you use data and insight to target more efficiently.
But it’s easier for some more than others. If you’re an advertiser that relies on acquisitions, a travel company for example, you can test very quickly whether programmatic is a more efficient solution than buying directly.
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The challenge is in branding campaigns. Finding tangible evidence that it delivers for brands at the lower end of the funnel (brand impact, intention and purchase) can only be done with a huge amount of research. Bearing in mind how long programmatic has actually been up and running, I don’t think there are that many people who have the complete answer yet.
Are expectations too high about what programmatic can achieve?
While I’m convinced it’s the right thing to do in the long run, with everything in the communications industry, especially digital, everyone jumps in head-first without really knowing in many cases what their returns are going to be. We’re sheep.
Most advertisers are unaware of the complexity of it. Really, you need a clear goal about what you want to do and how. If I did it all over again, I’d dip a toe in the water first, maybe one country with two or three contrasting brands, and scale up over the course of a year.
So you have regrets?
It’s been very difficult at my organization. You need someone dedicated to programmatic. I should be out there understanding the different technology companies all day every day. Instead, I rely on third parties making recommendations.
Is it hard finding that specialist talent?
There’s a shortage of skilled people and those that are skilled want a huge amount of money. It’s not a bad thing because the returns for an advertiser are potentially huge. If you’re paying someone an extra £30,000 ($37,400), it pales in insignificance compared to the millions of potential commercial benefit.
And what about convincing those within the organization about the virtues of programmatic?
You’ve got to convince people internally that purchasing programmatically is a better way of spending their money than buying direct. One of the things people don’t like if you’re buying programmatically is — in some cases — the loss of empowerment from the brand and media teams. They are always very precious. In the old days, you’d say, “OK, I want to put 7 percent in Vogue and 10 percent in Cosmopolitan,” but a blog about high-end fashion could be the perfect environment too.
Has there been pushback?
Yes. You might get different brands and countries taking a different approach, which is bonkers. It’s frustrating trying to control that because there are too many different layers. We haven’t got a structure that enables us to do that. I’d guess in most cases it’s pretty messy, yes.
The person in charge needs clear responsibility to enable brand budgets find their way into programmatic. They need to be empowered by the board, or they’ll get out-shouted by their peers.
So what’s next here?
The promise in this area is now data technology, management and transparency. You’re going to have data coming out of your ears, and machine learning will take optimization away from humans at speed, at scale across a whole range of technologies.