Over the last six to 12 months, I’ve noticed a trend beginning to gather pace in relation to programmatic media buying. With digital media spend now making up the majority of many global brands media budgets, some brand marketers are, for the first time, starting to question the levels of transparency and value being delivered by the in-house trading desks of their advertising agencies.
The vast bulk of programmatic media spending, at least 85 per cent I’d guess, is currently being handled by agency in-house trading desks, with a small but extremely vibrant sector of independent media buyers and media buying technology providers making up the remaining 15 per cent of the market.
There are lots of perfectly good reasons why many major brands continue to hand control of their programmatic budgets (which often equate to tens of millions of pounds) over to their agencies’ trading desks without question. As the programmatic ad market has developed rapidly, larger agencies have invested heavily in their trading desks to ensure that their massive media procurement machines work effectively, providing their clients with access to a huge inventory of ads via global media exchanges and their own publisher networks.
However, any brand of scale will be aware that while much of the programmatic media buying activity organised by their agency delivers the desired results, a significant portion of that spending consistently underperforms. Having identified this, it would be natural to assume that the brand’s marketing managers would be keen to test different approaches in relation to the poorly-performing areas, for example, shopper marketing, but, in actual fact, many brands opt to do nothing.
From anecdotal evidence, the reasons for this are usually political rather than practical. While alternative suppliers and technologies exist to allow brands to take a far greater degree of control over their programmatic spending, many fear the consequences of rocking the boat when it comes their long-standing agency relationships. I’ve had senior executives from FTSE 100 companies tell me off-the-record that to go against their agency could literally cost them their jobs.
However, I believe that we have now reached a point where the commercial opportunities presented by alternative media buying strategies are starting to tip the balance of fear for brands towards re-allocating at least a portion of their programmatic media budget to independent media buyers or simply towards handling it themselves with the help of new software tools.
The good news for brands is that this isn’t an all-or-nothing, black-or-white proposition. I would argue that a brand can benefit massively from taking five, ten or fifteen percent of their programmatic budget out of their agency’s hands in order to try something a little bit different. As well as potentially boosting the performance of that under-performing portion of their budget, the additional insights about the contemporary programmatic marketplace will undoubtedly help to inform the brand’s decision-making in relation to the remainder of their spending and give them a platform from which to better assess their agency trading desk’s overall performance.
At Digilant, we work closely with major brands to facilitate the process of regaining control over programmatic spending, working as their trusted programmatic partner. The technical capabilities of our unique solution combine a demand-side platform (DSP) and data management platform (DMP) that connect brands with relevant audiences by activating first party, third party and our own proprietary data.
There’s a very good reason why we at Digilant can comment knowledgably on the workings of agency trading desks: we used to be one! Even though, always fully independent, we were originally born in the tranches of a spin-out from a global advertising agency, Digilant became fully independent in 2012 as therefore fully aware of the potential conflict-of-interest that lies at the heart of the ‘in-house trading desk’ model became apparent.
Digilant is now the paid media arm, as part of the ispDigital Group of companies, which also includes Acceso (earned media) and Antevenio (owned media), we and provides provide brands with customised cross channel marketing solutions at the intersection of earned, owned and paid media. The group has a presence in 12 countries across the globe, working in London to Los Angeles, Milan to Mexico City, so we have good reason to believe that the trend towards brands shaking up their programmatic spending arrangements will continue to gather pace internationally throughout 2016 and beyond.