'Sir Martin is partially correct, in-house programmatic trend is short-lived': CtrlShift CEO

Sir Martin Sorrell was recently quoted saying that advertisers trying to do programmatic in-house will be a short-lived trend. What do you think of this statement?

I think Sir Martin is partially correct and the programmatic in-housing trend – in its current form – will indeed be short-lived. Mainly because the discussion has been framed in terms of advertisers trying to break free completely from needing agencies.

However the trend of programmatic in-housing will not be going away any time soon. For a large enough brand, the benefits of bringing the programmatic function in-house, alongside other elements of marketing, goes beyond cost savings and efficiencies. Having clear understanding and control over programmatic advertising processes is also a motivating factor for brands given on-going developments regarding the regulation of consumer data.

The biggest benefit to advertisers lies in the longer-term game – and data – they will have full ownership of.

First party customer data is the most valuable data an advertiser can own and leverage, but the second most valuable is campaign data and the insights that stem from having intimate and in-house knowledge of the ebbs and flows of audience outreach efforts. It enables agile and informed decision-making that makes the most of the mercurial nature of digital advertising today.

When we say in-house programmatic, is it about simply cost savings or is the trend a result of the growing realisation that technology is redefining the media buying industry?

Marketers are under intense pressure to justify their investments against hard business KPIs. I’m pretty sure that many would be hard-pressed to deny that cost savings is a major driving factor when it comes to in-housing efforts.

But it is also important to remember that these touted savings will not be immediate. Advertisers still need to invest in the right talent, solutions and processes to enable a successful programmatic in-housing effort. The capital outlay can be significant depending on the needs of the brand, but the longer-term gains certainly have the potential to exceed this initial investment.

Technology has without a doubt redefined the media buying industry. It has transformed what is possible from a capabilities and opportunities perspective. However, the key barrier to really taking advantage of these developments is the catch-up game the media industry is still playing when it comes to evolving their business models and assignation of value to the work done. Is there still a need to put billable hour charges next to reporting when it is technologically possible to generate a report with just a few clicks?

When brands such as American Express not just talk about it but actually take their programmatic in-house, what do you think is really happening here?

They say that those brave enough the take the first step into uncharted territory will reap the lion’s share of rewards. Brands like American Express exemplify that first mover spirit and also fit the typical profile of an optimal in-house programmatic candidate – A major brand that operates on a global scale, with deep wells of data and a team that holds significant digital experience. They took the function in-house because they were confident they could reap the most benefit in this way.

The fact is that in-housing programmatic remains a relatively new trend yet to be truly tested within an organisation’s operational realities over time. I only hope that moving forward, more brands see in-housing as a viable move for gaining deeper understanding of their digital advertising efforts.

Is it a time for brands to re-examine how they should engage with their agency partners in this programmatic era?

Agencies still have a role to play in this programmatic era but I believe it is long past time for brands to re-examine how they engage with their agency partners, especially when it comes to programmatic.

Technology has enabled advertisers to do so much more, but the framework within which the work agencies do is valued and subsequently compensated for, hasn't changed. Are brands asking the right questions of their agency teams? Are they maximising the expertise and insight that these practitioners can bring to bear in solving challenges and achieving brand objectives?

As more and more buying goes programmatic should we be questioning the actual role of an agency?

Definitely. The first question being – what is the biggest value an agency partner brings to the table? It’s their strategic expertise, their wide-eyed lens on industry verticals and consumer trends. It necessitates a return to the very essence of “advertising magic” that many have built lasting legacies on. Programmatic is merely the technology which enables automated buying and richer insights. The business of advertising should not be about pulling levers and charging by the hour for it. It can and should be so much more than that.

Are we entering a time when there is very little role of specialist skills, or when advertisers need little help to navigate the complex media landscape?

Navigating complexity will always require specialists. People who have devoted time and effort to understanding just how all the pieces fit together – or at the very least what is and isn't possible.

We’re still in an era of flux, though the end game becomes clearer each day. For the next few years at least, advertisers will still need help as the marketing function broadens and becomes ever more integrated with business outcomes.

Powers will appear at Programmatic Punch in a Fireside chat on the pros and cons of in-house programmatic. You can purchase tickets for this event now, which will take place on 4 December at The Brewery, London.

Ctrl Shift is a sponsor of Programmatic Punch