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How to steer your adtech ship through the coming storm

Cadi Jones, commercial director EMEA at adtech software experts Beeswax, is often tasked with demystifying digital advertising for marketers. Here, she lays down how adtech firms can weather coming regulatory and cookie changes soon to rock the industry.

We're all steering our programmatic ships in a time of inclemental weather. Aristotle had a line or two to say on such matters all those thousands of years ago. “We cannot direct the wind. But we can adjust the sails.”

In 2021, for digital marketers, the weather forecast is strong and changeable winds for the foreseeable. We need to become competent sailors pretty rapidly in order to avoid being blown off course.

These gusts have been whipping up for some time. In 2020, the relationship between adtech vendors and clients saw concerns about supply chain transparency, data protection and regulations rise. Media agency practices hit the spotlight against a background of continued interest in and rising demand for in-housing. At the same time, agencies and brands dealt with the impact of the pandemic including intermittent cuts to ad spend, fast-changing creative needs coupled with a dramatic growth in e-commerce and news and online video consumption.

User behaviour is the prevailing wind that we cannot ignore. And there were two key air streams that continue to be driven by changes to user behaviour. Firstly, digital video, and connected TV saw huge growth, driven not only by user behaviour but from brands seeking greater flexibility in terms of budget and creative messaging - both crucial elements when there was so much out of brands’ control with lockdown rules and restrictions changing rapidly.

Secondly, GroupM’s eCommerce Forecast issued in December proved that the pandemic accelerated ecommerce. It expects online retail to reach 27.3% of China’s total retail sales in 2021. More surprisingly perhaps, the next country with the biggest adoption of online retail is the UK , forecast to reach 19.9% next year, with the US predicted to come in at 16.2%.

So why are these factors driving brands to consider in-housing? In challenging economic times most brands look to outsourcing as much as possible, however, in-housing does not need to be costly. If you think of in-housing as being control over the governance of your digital media buying, the number of ways you can achieve this are multiple. And, at least to a certain extent, it allows each brand to be the captain of their own ship, in these blustery times.

Agility

We’re in the middle of a period of huge change at a macro, societal and economic level – but also within digital marketing. As almost all media has become digital media, with video, audio, and OOH getting there too.

While strategic and long-term media planning still adds massive value, with campaigns no longer needing to be bought and planned at annual up-fronts, allocating a greater percentage of budget to timely activations can deliver better results.

Some brands choose to enable these capabilities through a brand specific agreement with their agency, ensuring they have flexibility of execution built in. Others work with partners to set up an in-house agency to focus on creative messaging and content and in others more on media execution.

What’s clear from the last year is that the brands who have agility at the core of their marketing function are best placed to respond to and capitalise on these changes.

Transparency

In-housing’s rise was initially a reflection on the ’undisclosed margin’ world of programmatic. However, programmatic advertising does not automatically include hidden fees, or an “unknown delta” as PWC and ISBA termed it.

Programmatic advertising is simply the automation of the selling and buying processes of digital media space. And the technology is merely a tool; you cannot blame programmatic itself for the undisclosed margin.

Demands for greater transparency have often been interchangeable with demands for lower pricing, or for transparency for transparency’s sake. What sophisticated brands are now interested in, though, is transparency as a mechanism for gaining competitive advantage.

By understanding, transparently, what your tech partners are doing, you can drive value – rewarding the partners who are driving the best results for you in a way that aligns with your values – and penalise the ones that do not.

So you do need access to the granular data that will allow you to understand the decisions that are being made for you, and for your brand – whether those decisions are being taken by a black box algorithm within a legacy DSP or by a human working with the campaign tools that they have access to. But it’s not just about access to the data, it’s the time, energy and focus on putting that data under the microscope and assessing it.

Understanding the impact of targeting data that’s being used, the creative variations, as well as the impact your team and your technology partners have, means that you can set your brand up for success.

Regulation

There were some spectacular fines issued in 2020 in relation to advertising and data privacy.

The Italian regulator topped the European rankings, with almost €70m in fines in 2020. At a superficial level, some brands want to create their own paper shield.

Increasingly, there is closer collaboration between marketing leaders and procurement, legal, security and information teams. Marketers want to actively understand how they can achieve their objectives while respecting the regulatory environment, and if they’re able to do this now, and can develop their skills, they’re at an advantage over their competitor set.

Those that lean in to the regulatory environment, and carry out the due diligence on their prospective partners, are seeing this as an opportunity, an advantage for the future.

Competitive advantage

At Beeswax, the biggest area that we see brands wanting to explore as part of their in-housing strategy is around customising their bidding strategies.

In legacy DSPs, as the bid request arrives in the DSP’s bidder, it decides, on behalf of each of their customers, whether or not they will place a bid, and the value of that bid. Many brands have now reached a level of sophistication where they understand that leaving that decision to the platform, to make on their behalf, without any visibility into the logic behind that decision, leads to decisions being made that turn out favours the platform’s parent company (as well as, hopefully, the marketer). Effectively, marketers have been giving free reign to the platforms to make more money for themselves.

In moving to a custom algorithm model, a brand is able to understand how their own algorithm works, and ensure that it is optimising to where they see value. It is at the heart of taking responsibility for your advertising spend, whether that is purely to drive higher profits and cost efficiency, or whether there are also ethical decisions at play.

Talent

Finally, there’s historically been the assumption that it’s hard to find good talent if you in-house, that brilliant, smart digital marketing people would not want to work in commuter belt towns where brands have their head office, instead of in a fancy agency building in Soho.

I’m sceptical about whether that was ever really as off-putting as people think. I wonder if simply the brands were not looking in the right places. But even if it were a key factor, surely the great levelling 2020 work from home experiment has loosened up the views of even the most traditional brands, to demonstrate that their digital marketing workforce does not need to be constantly office-based.

As brands are embracing in-housing more, and it no longer simply means operating a social media account, people who work in digital advertising are drawn to what this might mean. Working collaboratively across different functions to agree on everything from contracts to cookie policy is something that most agency-based people would not get the opportunity to do.

I predict more will be take up the help and steer the ship in the next year.

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