Clients Take the Reins on Programmatic
The days of the centralized “black box” agency trading desk are numbered.
As major brands buy more of their online ads using programmatic technologies, they’re beginning to question the extent to which they need help from their agencies to do so.
Rather than work with agency trading desks, a growing number of brands are taking a more hands-on approach to their programmatic buying, either by building their own capabilities in-house or by insisting that their agencies build dedicated practices exclusively for them.
“Transparency was a huge factor for us,” said Jeffrey Holecko, Kiberly-Clark’s media manager for the North America region. Last year, Kimberly-Clark asked its media agency, WPP-owned Mindshare, to build out a dedicated trading group to service it exclusively as opposed to funneling its dollars through its Xaxis audience-buying platform.
“We now have complete transparency on everything, on all the costs. The data is ours, too. We own anything that comes out of our desk activity,” he added.
As more and more clients like Kimberly-Clark become more savvy about the ad tech world, they are demanding transparency about what, exactly, they’re paying their agencies for – and how their data is being used.
For its part, Kellogg’s now works directly with demand-side platform partners instead of paying its agency, Starcom, to do so on its behalf. “We want to be more hands on with what’s going on behind the scenes,” the brand’s then-global digital strategy director said earlier this year.
Consumer packaged goods giant P&G has similarly decided to shun agency trading desks completely in favor of building its own data management and real-time bidding capabilities in-house. A spokesperson for P&G said the company refuses to discuss its programmatic buying operations in “any detail.”
According to former IPG exec Brendan Moorcroft, who helped create the holding company’s Cadreon trading desk, the trend shows no signs of slowing. All major brands will take programmatic technologies in-house to some extent, he thinks, owing to a continued lack of transparency around how their media is being bought agency trading desks.
“One flavor is an agency trading desk-type entity sitting within the brand. Another option is the client will choose which tools are used and do direct deals with DSPs and data-management platforms, and then hire a services component from their agency to run it,” he told Digiday.
Moorcroft recently founded a consulting firm called Unbound with fellow IPG veteran, Quentin George, to help brands do exactly that. The pair wants to help brands develop their own programmatic strategies and technology stacks, as opposed to relying on agencies to do so for them.
Publishers are predicting the same trend, too, at least around data. Brands will probably lean on agencies to provide the services portion of their programmatic buying but seek to retain control of their data in-house, they say. Only a handful of marketers are doing so now, but sooner or later, it’s inevitable more will follow.
“It feels to me like 2014 will be the year we see more brands doing this. When it comes to who owns the data, it’ll be clients, not the agencies,” said Forbes chief revenue officer, Mark Howard.
As a result, Howard concluded, the long-term viability of the centralized agency trading desk is in doubt.
“The whole point of programmatic buying is transparency, so the market will inevitably move in this direction,” he said. “The question now is how fast it will happen.”
Here’s what’s behind the rise of custom algorithms for digital ad decisions
As advertisers ingest more campaign data and demand more control over it, custom algorithms are getting more attention. Here's why.
Gannett relaunches CTV streaming channels as ‘home’ for original, long-form videos
Gannett is relaunching its CTV streaming channels with more long-form programming and on additional distribution platforms after a rise in views and time spent watching.
Member ExclusiveMedia Briefing: As student athletes begin signing brand deals, sports publishers want in
Sports publishers are building new franchises that will connect the newly available student athletes with advertisers.
SponsoredHow the ad industry can use its borrowed time to future-proof first-party data solutions
Trent Lloyd, co-founder and head of brand solutions, Eyeota Google’s updated timeline for its Privacy Sandbox rollout, including its two-year delay of third-party cookie deprecation on Chrome, didn’t come as a surprise to many industry observers, given the limited utility of Google’s FLoC and the slow momentum of the Privacy Sandbox in the World Wide […]
Exclusive: Substack continues its acquisition streak with public correspondence startup Letter
The acquisition comes as Substack’s biggest, newest competitors are trying to position newsletters as one hub in a larger relationship between creators and their audience.
Now hiring: The FTC seeks ad tech and social media experts as it shifts its approach to investigating data abuses
The FTC's chief technologist aims to shift away from reliance on legalistic remedies to stop data abuses and wants technologists who understand ad tech and algorithms to help.