The last few years have seen programmatic advertising move from being the domain of agency specialists working largely in isolation from the organizations they’re supporting towards an increasingly accessible set of technologies for businesses to use themselves.
The desire for brands to take programmatic in-house is understandable. No outsourcing situation can really match the level of control and transparency over the entire programmatic campaign achieved by overseeing things yourself.
But moving programmatic in-house can be a complex process, and needs to be worthwhile from a financial perspective.
Here are three key questions brands should ask themselves before deciding whether they need to make the change.
1. Do you have the right staff?
Control is a vital attribute of in-house programmatic campaigns. Your brand can oversee every phase – from planning and rollout, to measurement – and can be far more agile when it comes to implementing changes and tweaks as the campaign moves forward.
But who is going to manage these new technologies? Do you have the necessary managers, optimisers and data crunchers within your staff already? Or will you need to upskill or recruit new employees?
The likelihood is that you will need to grow your staff. And the likelihood is that this will be easier if you are in the right place, location-wise and business-wise in terms of capacity and capital, to be able to attract new talent.
2. Do you have the right tech?
Bringing programmatic in-house is essentially bringing technologies you haven’t yet needed to purchase and maintain beforehand.
Key considerations need to be made when purchasing programmatic technologies: How easy is it to set-up and use? Is it supported? Is it simple to update and how long is it expected to work? What does it offer in terms of measurement and analytics?
There is also the question of ensuring any new technologies you bring in-house can work in-conjunction with systems you already have in place. What is the price of implementing this tech and ensuring it works, and would an agency be likely to negotiate a better price due to the well-established relationships they have with such organisations.
3. Do you spend enough?
With the considerations of staff and technology, we often find ourselves returning to questions of finance. So is there an estimated spend threshold on programmatic after which moving such operations in-house makes fiscal sense?
In an interview at The Drum, Wayne Blodwell of The Programmatic Advisory proposed an answer to the question of how much programmatic spend should prompt a move in-house.
“We have cited $20m as the minimum spend threshold for an advertiser to be spending in programmatically enabled channels before considering bringing programmatic in-house,” Blodwell says. “This is so the advertiser can make significant savings on their investment to deliver better marketing performance.”
For Blodwell this scale of spend across global display, video and mobile programmatic is the first indicator that a brand is ready to go full in-house. This is alongside the expectation that 10% of this should be made in savings in order provide a financial buffer to account for investing in recruitment and technology, etc.
While Blodwell understands the pros of full in-house programmatic, he accepts that a 100% model might not be suitable for all brands and businesses. Indeed, the question of how brands deal with programmatic doesn’t have to be a hard binary of in-house versus outsourced.
Hybrid approaches to programmatic can include building an in-house team while outsourcing certain elements such as media planning or the analytics elements. It is also possible to have in-house programmatic specialists who still use an agency to get the best deals with vendors.
With that said, there are an increasing number of brands currently spending more than $20m a year on programmatic via agencies. These businesses – that have a global presence and the room for expansion across their technology and staff – are undoubtedly in a strong position to further explore the feasibility of moving programmatic in-house and hammering out a plan to make the change.
by Luke Richards