The trials and tribulations for brands in-housing their programmatic advertising

scaling programmatic

The trend by brands of in-housing their digital advertising needs is one that will continue to grow over the coming year in a bid for more transparency over data. Indeed almost two thirds (65%) have improved their internal capabilities including the hiring a head of programmatic over the last 12 months.

‘Digital native’ brands such as King, the studio behind hit video game Candy Crush, as well as online betting exchange Unibet have spent the last 12 months bringing their programmatic trading capabilities in-house. And it's inevitable that more-and-more marketers seek to better leverage their first party data.

That was the consensus among on-stage participants at this year’s Programmatic Punch conference hosted in London earlier this month where brand-side marketers were joined by representatives of martech and adtech players as well as leading online publishers.

The ability by a brand’s team to manage their own first-party data is set to bring more efficiencies and is seen by these companies as the answer to overcoming the lack transparency that clients experience in some cases when working with agencies and trading desk partners.

Transparency

One immediate benefit enjoyed by many brands that have done so, is improved transparency over how their ad spend is distributed among third-party adtech vendors, and how much is actually spent on paid-for media, according to Lara Izlan, AutoTrader, director of commercial platforms and operations.

“It just didn’t make sense to have someone else running retargeting, for example for us, when that data sits on our platforms,” she said, adding that a “cultural fit” was an additional movtivation.

Izlan added: “The other point was more of a cultural one. We are a data and tech company. AutoTrader no longer has magazines – not for the last four years – and we were used to half of our business being engineers operating in an agile, collaborative way. So it made sense for us to extend that to the marketing and advertising side.”

Elsewhere, Greg Carroll, King, director of programmatic advertising, discussed how the gaming studio – which launched its own adtech offering in the last 12 months – said such a trend was impacting adtech companies that would identify themselves as supply-side platforms (SSP), adding that it has also helped highlight the “shades of grey”, which have historically operated under the radar.

“The stress lies around being transparent when it comes to the SSPs you use to manage your inventory. A part of the SSP has been killed but it is for the better, at least for us,” he added.

“We don’t tend to use data from the first party source in a way that we would like them to, and therefor through in-housing we improve our own personalized use and that adds a more integrated approach to buying our media,” says James Burgess, head of programmatic for Unibet Group.

However “the concept of programmatic is changing,” claims Nick Reid, the global head of agency partnerships for Adobe (himself and ex-agency, tech platform and publishing executive) who says that the traditional format of the skillset being held by agencies is now diversifying to allow advertisers and customers to manage campaigns themselves.

“A lot of it depends on what the outcome is for the advertiser. If you are buying volume with software then traditionally it sits within the agency as actually your online needs to sit beside your TV and audio which is being bought by automation. So we are seeing a revolution in how people are using software, and traditionally that sits within the agency but there are some businesses where it is being predominantly driven by digital. We see that shift going towards being managed in-house but traditionally we see the business in terms of software ownership sitting within the agency or brand and being serviced by the agency.”

He adds his belief that all automation will be in-house “at some point”.

Discussing how car-sales platform Autotrader has in-housed its programmatic buying, its director of commercial platforms and operations, Izlan revealed that from working with automotive manufacturers, retailers and franchise networks, the advertising team has begun to see brands take more ownership of their data and had grown in awareness of how their budgets were being spent.

“Why we chose to bring programmatic in-house was because data played a massive part of that. It just didn’t make sense to have someone else running retargeting, for example for us, when that data sits on our platforms. The other point was more of a cultural one. We are a data and tech company. Autotrader no longer has magazines, not for the last four years, and we were used to, with half of our business being engineers, operating in an agile, collaborative way so it made sense for us to extend that to the marketing and advertising side as well. From a cultural fit it made sense.”

The talent acquisition and development issue

With King having developed its own advertising platform, still in its infancy, Greg Carroll explains that it has recruited talent “looking across the spectrum of working with tech backgrounds and agency backgrounds” as he believes that with programmatic not being just a single channel, there is a larger echosystem and spend that needs to be addressed. He also described in-house programmatic as being “shades of grey”

Izlan also speaks about how the in-house programmatic team has been compiled from differing backgrounds; “When we built our in-house programmatic team, line by line, channel by channel, and making a business case for a bigger team as we went along, obviously it’s really hard to find good talent but well worth the effort. What we did was not to just rely on brand new people coming in and taking on these new responsibilities, we actually looked around the business to see what other skill sets could be borrowed from. For example, we would go to our UX team, our design team, marketing and advertising, finance, etc… and we almost built a portfolio-style virtual team. In companies where collaboration and agility are part of the DNA, that works, it probably wouldn’t work for everyone but it’s really about finding the skillsets in places that you wouldn’t necessarily look and making that work as your business case grows.”

Arguing the corner for agencies, Charlie Glyn, head of Affiperf UK, the programmatic trading desk of Havas Group, warns those set to move to work with brands taking their programmatic advertising in house to consider whether they would still develop professionally from an environment which is perceived to be less developed.

“It’s a very specific role as a programmatic trader to recruit for and we get a lot of success finding some fresh, ambitious and intelligent graduates who want to progress as quickly as possible or throw themselves at the role and interestingly they are the ones that challenge what we are doing as they are not used to the status quo or managing their own business,” Glyn continues, adding that Affiperf hires experienced people who are hungry to learn and can take on specialist topics such as video and “particular amplications.”

The increasing inclination of brand-side marketers to take a more proactive role in the media trading process of marketing has led many to question the future of the agency model.

And the extent of the growing mistrust between advertiser and agency was laid bare in a study published by Infectious Media last week.

These sentiments are starting to take take effect on the agency landscape, in fact last week, The Drum was able to confirm as Havas has placed a number of its UK staff under consultation, with as many as 40 roles under threat of redundancy, with the cutback understood to primarily affect its media arm. This emerged as the agency’s wider holding group reported flat revenues for the previous quarter.

The role of the agency as more brands in-house their programmatic

Glyn continues to defend the agency role, claiming that it offers more flexibility; “It’s not a one-size fits all. The approach we have now ranges from helping with the tech-and-platform level to the data providers we are using to methodology and really looking under the hood and then on others it’s about giving a workshop on what programmatic is. From a futureproofing perspective it’s about looking at partners, what resources they have and what their goals are. Some have the appetite and really want to get involved and others let us be the experts and build on our recommendations – it’s about working with each client on an individual basis.”

Izlan adds that the conversations being had within the industry are growing in sophistication, as are the requests Autotrader receives from partners, which she says is partially from bringing in agency and trade desk talent but also from the maturing of the automated sector.

Burgess offers his own advice on how in house teams can be most effective with smaller departments than those held elsewhere: “A lot of the agencies and trade desks are tech agnostic but that generates a jack-of-all-trades and so by focusing on a few tech partners and working with them closely and understanding those singular platforms will be far more beneficial than the multiples. There are so many new tech propositions coming forward all the time and that could be detrimental in the way in which you work and you really need to focus, when in-housing on a few.”

The conversation was held during a panel discussion at The Drum’s Programmatic Punch event held in London.

Words by Stephen Lepitak and Ronan Shields

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