It’s not just about what’s most efficient and cheap
Transparency is everything in digital advertising today. Years of fraud, brand safety issues, Facebook and Google’s questionable practices and murky metrics have fostered distrust and prompted a push for greater control over ad practices. The brand/agency relationship is a case in point. In 2016, K2 Intelligence and the Association of National Advertisers reported that non-transparent business practices were pervasive in the U.S. As a result, many brands—Procter & Gamble, American Express, Unilever, L’Oréal and Netflix, just to name a few—have shifted their programmatic ad spend in-house, causing major concern in the agency world.
But while the incentives of increasing scale, efficiency, transparency and control may make in-housing everything seem like the obvious choice, you don’t have to go all-in. In fact, many brands are adopting hybrid model with great success. Here are a few reasons why a split model could be a good option for you.
Sourcing good programmatic talent can be tough
In order to successfully bring operations in-house, you need a leader that can think strategically about the nuances of programmatic, and this is not always easy to find. Many folks in the space have been siloed and assigned to focus on the nuts and bolts of the technology as opposed to how planning in a programmatic world should be performed. Many brands hire planning talent from agencies as they’ve had exposure to different approaches across a broad set of brands.
Once you’ve nailed this key hire, building and training a programmatic team with full management and department buy-in is necessary. You will need to source ad operations, data analysts, engineers and developers. Truly bringing all of these resources in-house may be a challenge if you are not located in a major market. And there will always be some resistance from team members who prefer the status quo, so make sure to address early to get everyone on board.
A hybrid approach can help in this regard because agencies come with built-in talent and day-to-day management falls on them. Also, agencies can often help source teams should you need to fill gaps internally.
Technology can’t build and manage itself
Talent is only half the battle. Now there’s the question of the technology. Do you build or buy? If control and tighter integrations to your data and platform is what you seek and you have the engineering resources and time, building your own in-house technology stack seems like the obvious choice. However, costs associated with building your own technology can be high, so many brands end up buying. When you buy a platform, you can get up and running quicker before jumping into building a full-tech stack. You will learn a lot with the buy model and will probably find a good compromise to combine buying and building the right components.
Once you’ve made this decision, now you have to determine who manages the platform and the data. Like I said before, brands today are very sensitive about who touches the data. Some brands want total control over first- and third-party assets while others are simply taking control of their own first-party data and ceding the rest to the agency. There is no right or wrong answer here. It depends on your comfort level and trust in your agency partner.
You derive value from your agency beyond programmatic
Agencies can offer more value than just managing your programmatic media planning and buying. Beyond execution, agencies deliver the out-of-the box creative elements and outside perspective that is difficult for your internal team to develop when you’re so focused on your brand, which is why you see some brands utilizing their agency, as well as a DSP partner
After carefully evaluating your talent, technology constraints, technology partners and resource budget, it’s up to you to decide whether to go hybrid or bring everything in-house. Remember that the decision shouldn’t solely be about efficiency and cutting costs, it should also be about properly managing your customer’s data. This is more important than ever. Many companies like Unilever understand this and have taken control of their first-party data and carefully chosen trusted agencies to manage their third-party piece.
by Jateen Parekh