In-housing programmatic: the role of trust and transparency is key

In-housing programmatic: the role of trust and transparency is key

In-housing is increasingly being positioned as the silver bullet to the aging network agency models, which are riddled with middlemen in digital and a corresponding lack of transparency, driving advertisers’ desire to take back control.

However, despite all the clouds of hype, it’s hard to find enough proper, actionable information on the process of in-housing, or how to do it effectively and sometimes to even understand it really means.

Ahead of his appearance on the ‘In-Housing Programmatic: Time for the Truth’ panel at Programmatic Punch UK this December, Vincent Tessier, brand and agency lead EMEA of MoPub, a Twitter company, chats to The Drum about the state of play in programmatic in housing, the role of data in the process and how comfortable brands are with the emerging programmatic platforms.

Programmatic disruption is creating a fourth era of digital, with programmatic advertising spend now accounting for more than 80% of digital ad spend. What is the state of play when it comes to in-housing programmatic?

In-housing is definitely on the front page pretty much every day, and the topic is probably making a disproportionate noise compared to the reality of things. There are various reasons why it is such a hot topic at the moment, but I believe it will calm down as marketers start taking back control and it will become the norm.

Marketers are thinking about and evaluating in-housing for various reasons, including more transparency, trust, cost efficiency, data ownership, dynamic creative optimization (DCO), and efficiency — these are all legitimate reasons. Digital and programmatic have changed the way brands buy media in such a profound way that it reshapes the whole value chain, and that includes the role of media agencies themselves.

On their end, media agencies are working hard to:

  • Create new consultancy business units and new approaches to serve and work closely with advertisers that want to explore and implement in-housing initiatives — what is now called the service layer.
  • Reassure, rebuild trust, and adapt to a new reality around more transparency and openness, in order to continue to operate their media buying, which is what we call the hybrid model. What has changed for sure is the advertisers’ understanding and knowledge about digital and programmatic: advertisers know what they want and what they don’t want, and that definitely changes the balance of power.

When it comes to in-house programmatic, is it only a global auto brand or an FMCG that may have the scale to do this, but the vast majority will still rely on their agencies?

For a full in-housing initiative where the advertiser operates the media buying themselves, yes, it is typically only for large advertisers with large global budgets such as Air France and Vodafone for example.

On the other hand, you have large performance advertisers such as e-commerce, gambling, or gaming advertisers who usually have successfully internalised search engine advertising and social years ago, and see a DSP as just another channel to internalise. The main blocker really is expertise and human resources, both hiring and retaining.

What is the role of data in the in-house programmatic process?

The role of data is central. Owning the data and making sure that the data collected as a result of your media campaign remains your own asset is absolutely essential. This is a set of data that you will be able to analyse, get insights from, and integrate further into your own tech stack for more use cases. The merger between adtech and martech that we are all witnessing these days is key here. Putting a data strategy in place that helps your media activation, your site-centric data, and your client CRM data is absolutely key. And owning your DSP seat is absolutely essential for this.

The emerging programmatic platforms are in OOH and TV, how comfortable are brands when it comes to these new frontiers?

I think that advertisers are very comfortable with traditional media channels being available programmatically. I don’t see why an advertiser would think it’s a bad idea to be able to automate and target efficiently on all media channels. For years, digital media has brought accountability and measurability to online media activities, so it is a natural movement for campaign targeting and measurement to also evolve on other channels. The question is more how fast these channels are adopting technology and programmatic.

Even when the technology and the pipes are ready, there can be many blockers around legal, commercial, or organisations. For each channel, when we are talking about transforming a whole sector, this takes time. The OOH industry has been evaluating and working on automation and programmatic tests and proof of concept for years, and I feel that things are accelerating now: inventory is being made available, platforms are connecting to each other.

Discussions of programmatic and in-housing have begun to broaden in the past few years. What are your views on a hybrid in-housing approach emerge where brands take more ownership of strategy, measurement and budget assignment but outsource buying to agencies and other suppliers?

This is where there are many nuances to in-housing. For an advertiser, it is clear that owning your own DSP seat is very easy and makes a lot of sense, from both a transparency and data ownership perspective. In my experience, I now see a lot of media agency trading desks operating on their client seats. This was a first milestone; the next step for an advertiser is usually to own its ad verification contract. In this scenario, the media agency is still operating the media buying. For advertisers who are really going on the in-housing road, which basically means operating their media buying themselves — a lot want to but very few successfully manage to, for many reasons.

Another trend we see emerging is the bidder as a service complemented by the ‘bring your own algorithm’ concept; this makes a lot of sense and tailors the machinery to an advertiser-specific needs and KPIs. The eventual next step is owning the technology, either building or buying it, but we are talking about only a handful of advertisers worldwide for whom this makes sense.

MoPub are a partner of Programmatic Punch UK, which takes place on December 2 in London. Tickets for the conference cana be purchased now.

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