Take Programmatic Advertising In-House

September 6, 2018
Contributor: Chris Pemberton

Calibrate investment to media spend, take a phased approach and leverage hybrid tactics to successfully bring programmatic advertising in-house.

The Gartner 2017 CMO Strategy Survey found that marketing leaders want to rely less on agencies and bring strategy in-house. Interest in bringing programmatic advertising in-house as a way to control advertising strategy is on the rise for three reasons:

  1. Cost savings. There’s a financial opportunity to save 15% – 30% of middleman fees paid to agencies and other parties.
  2. Strategic advantage. As marketers get better at using data to target audiences and measure campaign results, they’re more motivated to keep these lessons proprietary and within the walls of their business.
  3. Operational agility. Internal resources can react to real-time factors such as unforeseen events, competitive strikes and analytics insights faster than agencies.

“Managing programmatic advertising internally offers favorable economic and strategic advantages in data and segmentation,” says Eric Schmitt, Senior Director Analyst, Gartner for Marketers.

Align programmatic insourcing ambitions to ad spend

Before you embark on an insourcing initiative, run the numbers to validate the expected return on investment. Use your organization’s annual digital programmatic budget as a gauge. For marketers who spend less than $10 million, the risks of going in-house are greater than the potential cost savings and other benefits, so select a service provider on the basis of its support for measurement standards, transparency, accountability, real-time operations and reach.  

“Moving to a fully insourced model in one hop is a recipe for trouble.”

Marketing leaders who spend between $10 million and $50 million should think in terms of hybrid models and trade-offs. Retain an existing agency partner to handle media planning and buying so the internal team can concentrate investments on an in-house targeting segmentation framework.

The CMO Spend Survey 2018-2019

What this year’s trends mean for marketers

For advertisers who spend more than $50 million, estimates imply substantial cost savings that warrant insourcing and funding of staff, data and technology infrastructure.

Take a phased approach

Moving to a fully insourced model in one hop is a recipe for trouble. Take a gated approach that’s based on delivering incremental value and quantifiable proof points. Focus early insourcing efforts on data-centric tasks such as audience targeting and segmentation to create consistency and deduplication across channels. Reuse existing data assets and capabilities and double down on first-party data analytics to empower media planners with better programmatic targeting strategies. Build a marketing technology roadmap and get your hands on the data. If you don’t have direct, hands-on experience with your data management platform (DMP), build one now so you can get comfortable building and tracking audiences.

Offset risk with hybrid insource-outsource tactics

Many of the trade-offs and hazards of insourcing can be managed by blending in-house and outside resources. The first job is to get the right team in place. Actively manage current agencies and managed service partners for knowledge transfer. Focus on managing vendors effectively. Appoint a single vendor as “general contractor” with accountability for integration and overall service levels. Media planning requires specialized skills and is usually best left to an agency.

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