Do you know which demand-side platform (DSP) your agency is using? More importantly, do you know how they’re using it, or what the monthly reports you’re getting really mean?
For years, advertisers have fought to get programmatic advertising out of “the black box,” demanding more transparency. While this has motivated many marketers to bring their programmatic advertising in-house, others choose to keep the DSP with their agency, but to partner more closely with the goals of better transparency and a stronger relationship. In either arrangement, marketers are learning to lean in more to their programmatic advertising campaigns to gain a deeper understanding - and more control - of their advertising.
Privacy is Driving Programmatic In-House
For almost a decade, marketers have strongly considered bringing programmatic in-house. Early adopters like Netflix and Target paved the way, touting their improved results from year one. Today 69 percent of brands in the US have followed suit. The number is even higher in Europe (74 percent), since advertisers there had to ensure data was being used in compliance with GDPR.
In fact, new privacy regulations are a huge driver of the in-house movement on both sides of the Atlantic. Between new laws and the industry’s migration away from cookies, brands are becoming not only more careful with how they use data, but more protective of their first-party data. According to a recent study by Accenture and the IAB, 36 percent of brands cited data management and ownership as a top reason for shifting to an in-house DSP. Scott Tieman of Accenture noted, “We think it’s critical [for brands] to own their first-party data, and in order to do that they need to own their own ad tech contracts…that’s how they get insight into their customers and connect it to a data strategy across their organization.”
Cost and Effectiveness are Key
However, the true motivating factors were cost and effectiveness. 42 percent of brands thought they could run more effective campaigns on their own, and 41 percent thought in-house would be more cost-effective.
That makes sense. Digiday reports that “Advertisers are rightly disappointed with the return on investment they’re getting from agency programmatic campaigns.” And rightly so – many agencies aren’t exactly transparent about their billing. In fact, a 2018 report states that only about 10 percent of advertisers have a high level of trust in their agencies. Those low trust levels are driven largely by the lack of transparency.
Of course, the vast majority of agencies in the digital space are honest and well-versed in programmatic, but that doesn’t mean marketers shouldn’t be asking hard questions. Marketers increasingly want more control over their media and their budgets, rather than handing their agencies the proverbial “blank check.” Marketing directors have a right to know how much the markup on media is, which middlemen are involved and how much they’re being paid, so they can understand what their true CPMs or CPAs are.r Some marketers may find that the fees they’re paying make bringing their DSP in-house a solid option. It was the right choice for Unilever. b Once it brought programmatic advertising under its own roof, the global brand saved more than $600 million as it created "more content in-house while making existing assets go further.”
If you’re working with smaller budgets, managing your own programmatic campaigns will give you more control over every dollar spent.
By bringing programmatic in-house, brands can make better and more informed decisions about their spend, more importantly, gain insight into where every cent goes and how much value it’s driving for the brand. It’s not the right choice for every brand, but it could be the right option for yours.
In-House DSP Means In-House Campaigns
Of course, controlling every aspect of a campaign is an obvious reason for owning your programmatic solution. Apart from saving on the overall spend, one marketer noted in an IAB report, “What’s the point of doing anything (bringing programmatic in-house) if your media performance doesn’t get better?” That marketer saw improved results within a year of in-housing through improved targeting and placement optimization.
In most years, this has been a key reason brands choose to shift programmatic in-house. Apart from data ownership and budget, many marketers want to take the wheel on their own campaigns – or, at the very least, be in the front seat while someone else on their team drives. Having your own DSP means you control the bids, you control the targeting, you control the dayparting, the placement, and other levers. It’s a double-edge sword that leaves marketing teams fully responsible for their results, for better or for worse, but also offers the opportunity to act quickly and make changes when needed.
That may be too much responsibility - and just too much work - for some teams. In that case, a solid agency partner is a better option.
As programmatic in-housing becomes more common for brands, it’s also something marketers at companies outside the Fortune 500 can begin to consider. Programmatic has played a huge role in our industry for over a decade, and there are enough experts and resources to make in-house manageable and beneficial to most advertisers.
If you’re thinking of in-housing your programmatic advertising, take a good look at Beeswax’s BaaS model. If you want all the functionality of a top DSP, but also want to keep control of your data, algorithms and strategies, we might be the right choice. Contact us to learn more.
By The Beeswax TeamRead More