Facts and Figures For Programmatic Media In-Housing

In 2018, more and more media buying and marketing teams are being asked to draw up proposals and plans for taking the programmatic portion of their budgets in-house.  While the claim behind this strategy is to innovate and take control of a brand’s programmatic future, the economics might point to something besides a complete in-house strategy as the way to go.
There are also different ways of in-housing. For some brands it means setting up their own agency trading desk and using that to deal directly with demand side platforms (DSPs). For others it involves bringing on board an ad tech partner or an agency of record that will be part of setting the strategy, but also responsible for pushing all the buttons when it comes to ad buying execution.

But let’s start at the beginning, why is in-housing taking off in the first place? The short answer is that marketers came to realize that a large share of their budgets were not being used to buy ads, but to fund the 5000 companies that have become part of the ad-tech LUMAscape. While in-housing doesn’t solve for all of that undisclosed share of the budget, it does force marketers to demand a more open or transparent business model from their agency or ad-tech partners.

Recent surveys suggest that more brands are having a serious look at bringing programmatic in house. A report from Infectious Media indicates that many marketers (more than 4 out of 5) want increased control over their programmatic efforts, but fewer than 2% of respondents have actually taken the steps to make it happen. It’s no wonder why brands have been scrambling to figure out the best way to manage their programmatic budgets.

The Challenges to Bringing Programmatic In-House

So what has been the challenge for advertisers to bring programmatic in house?  We’ve narrowed it down to what we think are the four most obvious issues.

    Requires a unique skill-set, technology in-house requires an expert or multiple experts at the helm.
    Unlike other forms of digital advertising such as search, the market is not dominated by a single player but instead there are endless sources of inventory, numerous DSPs, multiple programmatic models to navigate. Marketers have to string together six to eight specialized solutions to accomplish their programmatic buying goals.
  3. TALENT POOL IS RELATIVELY SMALL for programmatic experts, with most professionals based at agencies in tech hubs such as San Francisco or New York.
  4. In addition to programmatic execution, brands also need to consider factors such as PLANNING, ANALYTICS AND BRAND SAFETYMost of which are enabled by 3rd party platforms and require expertise.

With most companies only being able to afford one or two internal programmatic experts, it seems that the budget has to match the resources necessary.

Brands must be spending at least $20 million programmatically before they even consider taking programmatic in-house, in order to generate a high enough level of savings to make the transition worthwhile.

– Wayne Blodwell, CEO of The Programmatic Advisory

The Solution is a Hybrid Model

At the end of the day most marketing and media buyers want the ease and safety of a single solution for their marketing services.  As much as having more control and transparency over programmatic media buying seems more cost efficient, the required investment in talent and expertise to navigate the ecosystem should not be overlooked.

The advantages of going direct make sense; control over their own first party data, disclosed contracts and platform logins, but until larger players absorb point solutions in the ad-tech LUMAscape your budget needs to start at something like $20 million to make the investment worthwhile.  Frankly not everyone is ready to jump in at $20 Million, so for those of you who are not there yet you should consider a hybrid model where you own the contracts and data and your agency partner, like us, owns the rest, at least for the foreseeable future.

In 2018 Native Becomes the Leading Ad Format for Programmatic Media Buying Platforms

Native advertising was established to make ads appear more natural on a web page. Rather than making it overtly obvious that the ad is not part of the original page, native advertising uses the page’s design and layout to design the ad so that it appears as just a part of the webpage.  Programmatic native advertising takes this to the next level by targeting a person based on specific data parameters, with the goal of providing the right message to the user in the context of the page/ and or platform that they are on. This provides relevant and helpful information to the user at the right time.

Increase demand for more native experiences will drive programmatic native spend, reaching $24 million by years end, compared to 13.24 billion in 2016 – eMarketer

In 2018 native digital display ads will make up more than half of all digital display ad spending in the United States. This stems from both publisher and advertiser demands. Publishers are pursuing higher value and more mobile friendly content while advertisers are interested in more engaging, less intrusive ads.  This is a trend that programmatic media buyers need to pay attention to as it will be front and center in 2018 media plans. With the advances of machine learning and AI native advertising will become even smarter and which will likely increase the already enticing engagement metrics. Also, it is easier for publishers to guarantee a viewable and fraud free experience providing brands with a more reassuring level of transparency.

Native Gained Popularity Through Social Media Platforms

Native advertising has gained traction through social media platforms, the trend having started with Facebook. In 2017, 84.2% of native display ads appeared on social platforms, which resulted in a $18.59 billion spend. Because most people consume social media on their phones, the focus native advertising development is equally been mobile heavy.  In 2017, $19.5 billion was spent on native mobile display which encompasses 88.3% of all native advertising, and the share is only growing. However, the social platform trend is slowly shifting as other publishers outside the social platform walled gardens are incorporating in-feed ads and videos allowing media buyers to scale their native programmatic ad buys, especially for those brands who are seeking higher rates of engagement. In the coming months, it is projected that more non-social publishers will quickly move to accommodate native programmatic ad buying.

As non-social sites incorporate programmatic native ads, social platforms continue to incorporate these ads to accommodate demand from both publishers and advertisers for this advertising format, and we predict that the trend will be that in 2018 native programmatic advertising will continue to take share away from display ads. The numbers back up this trend. It is estimated that the total ad spend will reach $24 billion which will make up more than 50% of all display ad spending in the United States.

Read about the other nine trends that we are predicting will be the key to success for programmatic buying teams in 2018 here.

If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed on native advertising and more than 30 other topics.  Need more information, you can also reach out to us here.

Programmatic Options Have In-House Appeal

The following article by Adam Cahill was originally published by ihaf (In-House Agency Forum).

Since 2010, the programmatic advertising category has steadily increased in prominence. Indeed, eMarketer data shows that programmatic activity has been responsible for more than 70% of the U.S. digital display market since 2016. And, the dollars involved are significant. U.S. companies will spend nearly $40 billion on display advertising this year with programmatic translating to nearly half of total digital ad budgets.
Not only that, recent surveys suggest that more brands are looking to bring programmatic in house. A report from Infectious Media indicates that many marketers (more than 4 out of 5) want increased control over their programmatic efforts, while fewer than 2% of respondents have actually taken the steps to make it happen. It’s no wonder why brands have been scrambling to figure out the best way to manage programmatic.

Throughout this process, an age-old dilemma has surfaced: Should programmatic activities be handled by external agency partners or internal marketing staff? More succinctly, should it be managed in house or out?

While this question isn’t unique to programmatic advertising—marketing execs are constantly evaluating the benefits of sourcing myriad marketing functions (media buying, creative, technology management) via internal or external resources—this particular category is a hot-button item for three main reasons:

  1. First, programmatic has grown dramatically over the past few years, and increased spending of this kind is gaining the attention of non-marketing execs including CFOs and even CEOs.
  2. Second, since the release of the 2016 ANA Media Transparency Report, which revealed how external agencies concealed financial data about advertising spend and transactions, mistrust lingers that agencies are not equipped with transparently measures and programmatic reporting.
  3. And third, if you can’t be completely comfortable sharing your first-party data about customers with your agency partners, the relationship and the media strategy won’t be efficient.

While such factors may have forced marketing executives to assess alternatives to their programmatic strategies, there are other considerations too. Given digital advertising’s rapid ascent from a tiny sliver of the ad business in 2001 to capturing one third of overall dollars in 2017, it’s not surprising that today’s marketplace has a few blind spots. Indeed, while online advertising may be more effective than offline in many sectors, it still has its problems.
It is through this lens that many of today’s brands are evaluating bringing programmatic media management in house. The appeal of insourcing is not unique to programmatic however—including the promise of greater control over data, increased financial transparency, and the possibility of reduced costs. Others advantages are brand safety and minimization of ad fraud.

So, why have fewer than 2% of companies brought programmatic advertising completely in house and what are the benefits of working with an external partner?

A Complex Environment. The current state of the marketing and advertising technology category (coined “martech” or “adtech”) is complicated, populated with at least 5,000 companies—many of which are sophisticated and deep-pocketed, and understand how to empower vast telemarketing teams to flood voicemail boxes with enticing messages promoting their solutions. It’s challenging for even the most experienced marketing manager to separate the wheat from the chaff. Marketing experts who work with not just a handful, but dozens of technology concerns, can help brands make good decisions based on their unique requirements.

The Stakes Are High, and Growing. Programmatic currently accounts for 5-25% of most marketing groups’ advertising activities. While this degree of penetration is significant, it is also expected to increase—and for some types of organizations (especially B2C), it is anticipated to expand by two-to-three times annually in the short term. Establishing a solid base to build upon will affect the health of marketing organizations for years to come.

Insurance Policy. The only thing we know for sure about the programmatic marketplace is that it’s going to evolve quickly and change dramatically in the coming months—yes, months. At its core, it is a technology industry, and in no other sector is merger and acquisition activity so prolific. Given its current scope of 5,000+ identifiable companies, consolidation is either imminent or in progress. The careers of many senior marketers will depend on the technologies they select for their corporations (as was the case for IT managers a decade ago, choosing among SAP, PeopleSoft, Oracle, and others). Having a trusted advisor involved in a programmatic transition not only ensures that the short-term project needs are addressed successfully, but that an expert is at the ready should an unexpected event require a change in strategy.

As much as having more control and transparency over programmatic media buying makes sense, the required investment in talent and expertise to navigate the ecosystem should not be overlooked. For now, brands should consider a hybrid model where they own the contracts and data and their agency partner owns the rest, at least for the foreseeable future.

Adam Cahill is the President of Digilant US and CEO of Anagram. A 20-year veteran of the digital industry, he went all­-in on programmatic in 2009, launching one of the first agency trading desks. Before joining Digilant, Adam founded Anagram, a programmatic media consultancy. Previously, he served as Chief Digital Officer at Hill Holliday and SVP/General Manager of Carat in Boston. Adam has been named a Media All-Star by Adweek, a Media Maven by the Ad Club, and has led teams that have twice been named Media Agency of the Year.

10 Programmatic Media Buying Trends for 2018 That You Need to Know About

As we kick off 2018, it’s important as marketers, media buyers or media planners to be confident that we are making the right choices, spending valuable dollars in the right places and overall making the returns for those dollars that everyone is expecting.  How do we know for sure we made the right decisions?  We read, we discuss and we read some more on what’s next and how we can outsmart others by being ahead of the trends or implementing the newest ad technology before anyone realized they even needed it.

Our team at Digilant has spent a good amount of time doing the research for you.  We narrowed it down to 10 big trends we know will affect programmatic media buyers this year.  In 2018 you will be hearing a lot of talk about in-housing, ads.txt, OTT, DOOH, native, transparency, attribution and how digital media buying will be going fully programmatic in the next couple of years. We will cover all these topics and more over the next couple of weeks but in the meantime we offer you 10 things you need to know about programmatic for 2018.

Download the full infographic here or read it below. 
If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed and get going.  Need more information you can also reach out to us here.

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