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A Guide to In-Housing Your Programmatic Strategy

Taking an Active Role:

and a complimentary RFP template!

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With more than four in five digital display ad dollars in the US transacting programmatically

today, programmatic advertising is an undeniable

mechanism for acquiring and activating

consumers. Technology partners skilled in

delivering customized solutions are gaining

Research &Development

Digital Ad Dollars

Last year, spawned by the complexities that exist within real-time bidding, advertisers and publishers began assessing their programmatic partners. In January 2017, Marc Pritchard, Chief Brand Officer for Procter & Gamble (P&G), the world’s top spending advertiser, delivered a widely publicized speech at the Interactive Advertising Bureau’s (IAB) Annual Leadership Meeting in Florida, prompting marketers to read the fine print on their contracts with programmatic partners. Pritchard demanded, “a wake-up call,” for the digital marketing industry and urged other advertisers to not, “waste time and money on a crappy media supply chain,” which he further

described as, “murky, non-transparent and even fraudulent.”

Brands began to question the ‘black box’ nature of programmatic technologies, where rules are set by their agencies and technology partners with very little insight or control of the mechanisms that dictate their success. Since then, there is growing consensus amongst media buyers that calls for alternatives to the ‘black box’ system that has largely dominated the programmatic ecosystem. Gone are the days when programmatic strategy, resources, and technologies were solely defined and led by 3rd parties. Brands are broadening and deepening their programmatic advertising expertise and are more motivated to take the lead in building their programmatic strategies than ever before.

momentum as a viable alternative to the ‘walled

gardens,’ or closed, and often opaque buying

ecosystems that once ruled the programmatic

landscape. Sophisticated brands are adopting in-

house programmatic strategies, allowing them to

regain control and confidence in this fast evolving

and increasingly impactful industry. By taking the

time to educate themselves, brands are beginning

to ask more of their media partners and are

leading industry initiatives to make programmatic

safer, more transparent, and ultimately the most

effective mode to reach their customers at the

right time.

Programmatic spend

Non-programmatic spend

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Refining the ProgrammaticLandscapeProgrammatic is undergoing a renaissance of sorts. Since the inception of programmatic in 2011, the range of ad tech services and the number of companies in the marketplace have exponentially grown. In the past, brands may have had trouble managing all of these moving pieces, but they have wisened up. Brands are rightfully demanding more from their partners and are creating order to drive greater insight and performance. A renewed level of attention from brands on their programmatic initiatives is ushering in a transformation of roles

and responsibilities. In a recent study conducted by the IAB, 35% of brands have reduced the role of external agencies in 2017 (up from 14% in 2016), opting for an in-house approach. With razor sharp focus, brands are doing the work to ensure the efficacy of programmatic to meet the unique needs of their business. One approach popular with big budget brands is to bring all programmatic strategy and execution in-house. Digital-native brands like Netflix and Target were early adopters of in-house programmatic. At only four years old, Netflix’s programmatic team

Brands Reducing Role of External Agencies

14% 35%

2016 2017

is more seasoned than most and is committing more to programmatic in 2018. Netflix increased its marketing spend from approximately $1.3 billion to $2 billion this year, with much of that going to digital, especially programmatic. An all-in in-house approach makes sense for Netflix and web endemic brands like it, but it is not a viable solution for most brands looking to scale their programmatic activities. Many brands, even without the resources to fully in-house their programmatic advertising are- at a minimum- looking to maximize relationships with fewer technology partners and maintain control of their overall programmatic strategy through a hybrid approach. Most commonly, brands in this situation are in the midst of consolidating their technology partners and own all contracts. While they are willing to outsource executionary functions such

More than a handful of household names have begun bringing programmatic operations in-house. The move is not just about brand safety. IAB’s research indicates that there are 5 motivations for in-housing programmatic including:

Improved AdPerformance1

Cost Efficiencyand Transparency2

Better Control and Management of Data and Targeting3

Enhanced Real-Time Optimization Capabilities4

Full Accountability and Focus on Brand Goals5

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as trafficking, ad-ops and custom optimization modeling, they want to maintain control of the overarching programmatic strategy.

Even brands with smaller budgets are choosing to “take an active role in managing and optimizing media investments,” as suggested by Bill Duggan, group executive vice president at the Association of National Advertisers. A recent study “revealed that 84% of respondents are seeking greater control over their programmatic operations. At the same time, it found that 96% of marketers would still look to agencies to manage multiple aspects of their programmatic advertising in the future.” Most prevalent (47% of brands) are using the hybrid approach to in-housing programmatic, combining internal resources and external industry expertise to execute both strategy and execution of their programmatic campaigns. This approach offers a happy medium between an agency’s programmatic offerings and total in-housing. Legendary Entertainment is a prime example of this. In 2017, “the studio built an in-

house data analytics unit called Legendary Applied Analytics to infuse data into its marketing strategy and enable more control over its programmatic bidding strategy.” Working with a handful of big-name DSPs left Legendary feeling as though they lacked control over the process of buying programmatically. It was only after executing a thorough RFP process that Legendary discovered their in-house analytics capabilities could work well with Beeswax’s Bidder-as-a-ServiceTM solution, which allows clients to optimize bids against custom algorithms and offers insights back at the bidstream and auction level. Synergies like these can only happen when brands do the leg work to identify the gaps in their programmatic strategy that a technology partner may fill.

The Hybrid Model

In-House Outsource

Brands Using the Hybrid Model:

47%

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So what’s next in this ever-evolving industry? It seems like every week there are new programmatic players entering the space. While some do have truly unique offerings, brands should be wary of falling back into an overwhelming web of third-party vendor contracts. As we enter a new era, Beeswax is confident that brands will arm themselves with the skills and technological resources they require to own the fate of their programmatic destiny. Whether brands want to assume control over the programmatic process end-to-end or leverage varying degrees of external expertise to execute impactful and profitable campaigns, programmatic is a scalable channel capable of competing at the highest level.

Asking the Right Questions

Considering an in-house approach? Take this survey to gauge your readiness.

Ready to take the plunge and in-house your programmatic tech stack?

Download a complimentary RFP template.

Take the Survey

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