Why media agencies want to build their own tech stacks
Nearly half (49%) of all agencies use their own proprietary adtech, with the majority of those who do so claiming it proves advantageous by helping them foster better relationships with brands and media owners alike, with superior measurement and the ability to ring-fence data as a benefit.
These were the conclusions of a survey detailing the thoughts of 129 media agency staff focusing on three regions (APAC, EMEA, and North America) conducted in April and May of this year by ExchangeWire Research in association with adtech outfit IPONWEB.
Dubbed, 'Agents of Change: The Rise of the Programmatic Media Agency,' It goes on to reveal that agencies that take greater control over their programmatic technology achieve superior performance across a number of key media buying and measurement criteria.
Almost two-thirds (63%) of media agency staff claim a proprietary adtech stack helps improve relationships with premium publishers while 37% believe it proves an advantage when dealing with advertisers (see chart).
Those media agencies using a hybrid of their own tech, along with licensed third-party measures cited challenges such as scaling with quality media partners as major challenges, while those electing to use their own tech cited issues such as transparency and brand safety as major challenges (see chart) .
Similarly, the majority of those who elect to use proprietary adtech cite measurement as a major priority (59%) along with the ability to build custom algorithms to power client-specific media buys (57%) with almost half (41%) of those currently using a hybrid tech solution claiming that “building their own stack” is a a major property (see chart).
Meanwhile, more than half (59%) of those who currently operate their own adtech claimed that such a move has helped build “extremely strong” direct relationships with premium publishers thus reducing their exposure to suspect players in the sector.
Brian Fitzpatrick, general manager of demand solutions at IPONWEB, said: “Agencies that own and therefore control their own technology stack have the competitive edge thanks to better performance across a range of programmatic touch points. Owning technology also gives an agency better visibility of clients’ campaigns, enabling them to drive up ROI.
“Owned technology also gives agencies the transparency across the ad tech supply chain that is increasingly being demanded by clients; as a result they are better equipped to tackle issues such as the tech tax, ad fraud, viewability and brand safety. And, as illustrated by the research, it helps agencies build the all-important links to publishers and inventory.”
Hugh Willliams, senior data analyst at ExchangeWire added: “Committing to any technology ownership is not a decision to be taken lightly. Our research with IPONWEB looks at the intricacies of the adtech ecosystem from the perspective of delivering strong programmatic performances; it aims to enable agencies to make informed decisions about their modus operandi and subsequent investment.”
The study went on to break down the sentiments of survey participants by region, highlighting a wide range in perceived understanding of programmatic media buying across the different regions, as reflected in the differences in the different tech decisions made in each market (see chart). In EMEA 51% of all agencies say this is the case compared to 26% in North America and 33% in APAC.
“Perhaps unsurprisingly, agencies who own their own technology (54%) were more likely to believe that this is a key differential than those that do not (41%),” reads the report.
Download a free copy of the report here