Is programmatic the new normal? Will tech companies make agencies obsolete and are brands bringing programmatic teams in house?
As part of The Digital Trading Awards Programme we hear from Ed Steer, CEO Sphere Digital who talks about the industry from a hiring trends point of view.
We have been sponsoring the DDTA’s since the inception, three years ago. The industry has done a lot of growing during those years. At the recent DDTA breakfast event Andy Oakes posed a great question to the panel, ‘Is programmatic the new normal?’
I want to pick up on a few of the most interesting topics of the day and aim to answer the questions from a hiring trends point of view.
Hiring trends
Hiring trends and demand for talent can offer a great deal of insight into which part of a market is growing. It’s a pretty simple metric. If there is lot of demand for a particular skill set, or lots of growth within a particular part of a market, it indicates it is growing and doing well. For the last five years, programmatic has most definitely been the busiest part of our business. That and broadly speaking any data centric marketing role. Be it analysts and biddable media roles in agencies and client side, traders and optimiser’s within agencies and tech companies or media sales people who can sell tech. Most of the growth in advertising has been centred around programmatic. As James Patterson, managing director at the Trade Desk said when opening the DDTA breakfast, ‘In a few years’ time the Digital Trading Awards will likely be called the Digital Advertising Awards’. Most advertising and media buying will be bought programmatically.
Will tech companies be the death of agencies?
I had not heard this question for a few years. I remember in around 2012 it was a hot topic. Back then I would have said maybe. Ad tech was clearly here to stay and the agencies did not have much ad tech in their businesses. In theory, tech companies could simply cut out the middle man and sell directly to clients. It seemed like a real and genuine threat. Yet the quick answer to this question, to me, today is no. Ad tech has made agencies even stronger. The best ad tech companies will be the ones who work with the biggest agencies. If I looked at the demand for talent and who keeps us the busiest hiring programmatic pro’s, it’s the agencies. The great ones have simply invested in tech and put programmatic at the heart of their business. They understand their clients, they deliver multiple services to them (search, offline media buying…) and they have hired some of the smartest people and built some of the best teams in the market. Businesses like WPP have made smart acquisitions too. Plista (a native advertising platform) and The Exchange Lab to name a few.
I am biased, yet middle men who add value will always play a big and important role and I think that the last few years and the trajectory of agencies, ad tech business suggest this. Although the agencies and the tech companies need one another (and the best ones work brilliantly together) the agencies had the buying power and the people power to adapt. They will grow and become more valuable to their clients because of ad tech and their ability to understand and use ad tech.
How many programmatic roles sit in client side businesses?
Broadly speaking there are not as many programmatic roles in house as you would expect. Some of the bigger brands and businesses who operate very transactional websites – like online gaming and travel – are starting to build “in house” programmatic teams. We do work on these roles regularly yet it does not seem to be as important or expanding from an in house hiring point of view as search was 10 years ago. Most brands still seem happy to let their agencies do their programmatic trading for them. This is changing though and I think it will continue to change, with in house programmatic roles and teams scaling on a year on year basis for a long time to come.
A word about creativity
Most people, and particularly the premium publishers and brands, want more creativity and a more unique feel to programmatic advertising - that tech is coming. We work with a lot of new and established ad tech companies who own technology that can enable programmatic campaigns to offer better and more dynamic creative in real time. I think it is accepted that the creative delivered in programmatic campaigns will improve with the tech and time. Ultimately, when people want to buy this tech and put creative at the top of their agenda for what is still predominantly a ‘DR’ based channel.
So there you have it. A few thoughts on programmatic advertising without mentioning viewability or ad blocking. And to the question ‘Is programmatic the new normal?’, within display advertising, yes it is. Yet programmatic advertising is still in its infancy and the whole industry has a long way to go. Exciting times!
Ed Steer, CEO Sphere Digital
Sphere Digital are a sponsor of the awards and more details about The Drum Digital Trading Awards can be found on www.digitaltradingawards.co.uk and link to www.spherelondon.co.uk.