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5 reasons more brands are buying digital ads in-house

Posted by Alex LePage on July 1st, 2014 at 7:06 am

According to a recent survey from Forrester Research and the Association of National Advertisers 46 percent of marketers are concerned about the transparency of agencies when it comes to buying online ads. It's no wonder, then, that a growing number of brands are moving away from agencies and working directly with ad tech partners. As The Wall Street Journal recently put it, marketers "are increasingly opting to use these 'programmatic' systems to buy digital advertising themselves, as opposed to paying third-parties to do so for them."

More concerning yet for agencies, transparency is only one of a number of issues that are convincing brand marketers to take programmatic into their own hands. Let’s have a look at the top five reasons for the in-house movement:

5. Direct Support: When brands do their programmatic buying through agencies, they’re cut off from the very people who know the most about programmatic advertising: the ad tech partners themselves. This means that the inside knowledge and expertise that ad tech specialists can provide in many cases are imparted to the agencies rather than directly to the brands. Among other things, this lack of direct communication helps explain why the same Forrester report cited above also found that 67% of marketers indicated that they still need to learn more about programmatic buying, don't understand how it works, or, surprisingly, don’t even know it exists.

4. Strategic Planning: Agencies are filled with amazingly creative people.  But programmatic is more about the intersection of technology, targeting and strategic campaign planning. (That's of course not to say that the creative message isn't important.) As programmatic grows in terms of share of advertising spend, brands want to develop the competency and thus knowledge of programmatic in order to strategically build and execute truly integrated campaigns.  Since at its core, programmatic is all about the ability to target strategically using intent data, a brand needs to convey as much knowledge about the current customer set as well as the desired audience in order to achieve the maximum outcome.  Doing so with an ad tech partner that has a deep understanding of not only algorithms and data, but also marketing strategy and tactics, creates a more seamless campaign.  Not to mention the ability to understand and tweak the campaign in real time as results related to the audience are revealed.

3. Better Communication: When brand marketers have to go through an agency to communicate their wishes to an ad tech partner, the little details sometimes get lost in translation, and worse, sometimes the campaign goals and context are ill-defined. Even placing the proper pixels on a brand’s website can sometimes be a huge headache when an agency sits in the middle of the brand-partner relationship. Without the ability to do the tech work themselves, agency executives can end up becoming those proverbial extra cooks in the kitchen.

2. Data Ownership And Competency:  as with any other major component of a brand's strategy or spend, programmatic will demand that a brand builds a core understanding and bus competency around it.  But even more importantly, programmatic involves one of a brands core assets: it's customer data. Brands are starved today to learn more about their customers  intent and engagement with their brand as well as with their competitors'. Through programmatic they have the ability to gain insights about their customer, prospects, and noncustomers more quickly than ever before.  Thus programmatic can serve as a key analytics and insights engine, and should be integrated into the brand's CRM fabric.  A brand's marketers and analytics talent alike will be both creators and consumers of this core customer data.

1. Cost Savings: This one is pretty straightforward: Brands are paying double the fees when they work with both an agency and the agency’s ad tech partner. And so while building an in-house team can certainly be expensive in the short run, in the long run it can save a brand a lot of money by putting an end to double fees.

None of this is to say that agencies are going to disappear from the programmatic landscape. As mentioned earlier, the agencies enormous expertise in creative cannon should be leveraged against programmatic just like any other media to create campaigns that elicit emotion and response. But expect more and more brands to begin handling their programmatic campaigns in-house as they use programmatic more strategically.  This looks like a trend that’s just getting started.

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