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Close-up of male woodworker working with a plank of wood: in-house programmatic

In-House Programmatic: Why More Companies Are Taking the DIY Approach

January 23rd, 2018   ||    by Todd Wasserman

One of the most significant trends in digital advertising today is the move toward in-house programmatic. A December 2017 study by Adobe found that 62 percent of brands plan to bring their programmatic buying in-house by 2022, according to The Drum.

Another 2017 report from the Association of National Advertisers (ANA) found that 35 percent of companies had expanded their in-house media-buying capabilities, as AdAge reported. That figure was more than double what was found in a similar survey in 2016.

Since most major brands (with the exception of the fashion industry) have traditionally opted to hire agencies to handle their advertising and media-buying, the move to in-house programmatic is new.

The change is a reflection of the evolving nature of marketing, in which marketers want more control of their data. Widespread reports of fraud and agency malfeasance have also prompted marketers to seek more transparency.

Bringing Data Into the Fold

Data has always been important to marketing, but the rise of digital media has brought with it a flood of new data. Marketers can now see what consumers are saying about their brands on social media, which topics they’re searching for, and what their interests are. Matched with first-party data from visits to the brand’s website or email program, a brand can find new opportunities for upselling or to lure former consumers back to the fold.

Ideally, a brand can work from a single data set that offers a full view of its consumers. This isn’t usually the case, however.

Facebook, for instance, doesn’t offer the kind of in-depth metrics about consumer behavior brands would get outside of that social network’s walled garden. Realizing the importance of data, some partners choose to hold on to it as leverage.

That’s why another recent study from the World Federation of Advertisers found that 38 percent of marketers in 2017 added clauses in their agency contracts stipulating how much ownership they had over their data, according to a report in The Wall Street Journal. About a third of marketers said they were already doing so, and 24 percent said they planned to.

Seeking Transparency

The other big reason marketers are aiming to take more aspects of programmatic in-house is due to widespread reports of fraud and agency misbehavior. Some 74 percent of marketers surveyed said transparency issues are driving them to take the reins on programmatic, according to an Infectious Media survey covered by Adweek.

Although ad fraud fell an estimated 10 percent in 2017, according to an ANA report covered by The Wall Street Journal, some 9 percent of display spending and 22 percent of video ad spending was wasted on bot traffic. Another bombshell ANA report covered by the Wall Street Journal documented “pervasive” kickbacks to ad agencies from media companies that marketers were unaware of.

More Marketing Worries

While control and transparency are the two driving issues for in-house programmatic, there are others still. Marketers often find their ad agency partners are slower to adopt to less traditional ad campaigns. Another worry is that agencies, digital agencies especially, are competing for newer skill sets that are in high demand. Marketers and tech companies pay better, according to a report in the Harvard Business Review. In response, agencies need to adapt and offer better services and more transparency.

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