According to the IAB report released in May, 65 percent of brands have already taken programmatic advertising in-house to one extent or another (48 percent of them have done it partially, and 18 percent – fully). Social media and search engine marketing are the top services that are handled in-house, as stated by the marketers surveyed by the Association of National Advertisers.
So, it seems like agencies providing programmatic advertising services may soon run out of clients.
What we should do is analyze the key reasoning behind it. Why do more and more brands go in-house?
Let’s find out.
What Does “In-House” Mean?
Going for programmatic in-house, you’ll need to understand that “in-house” means different things to different brands, especially when it comes to programmatic buying. So does “in-house” mean that your employees do every single part of the job?
Well, there is no universal answer. When some brands go in-house, their employees work directly with a DSP. Others employ agency’s services to come up with the programmatic ad strategy, but their employees are the ones executing them.
All in all, going in-house (a.k.a. switching to insourcing) means that your employees are responsible for carrying out the programmatic buying-related processes to a certain extent. This extent is completely up to you.
3 Key Ways In-House Programmatic Buying Benefits Brands
Bringing programmatic in-house must be beneficial; otherwise, it wouldn’t have become a trend. No brand would do anything against its own self-interests. So, it’s obvious that companies like Vodafone, Sprint, and Netflix saw an opportunity and took advantage of it. Let’s see what key perks programmatic in-housing has up its sleeve.
Fewer Middlemen = Reduced Costs + Improved Performance
Cutting costs and increasing the return on investment are the top priorities for any brand, and this rule drives them to try taking programmatic in-house. Although the costs behind going in-house are high, this endeavor results in 15 to 30% in cost savings as brands minimize or stop paying middlemen fees.
Reducing the role of middlemen has a healthy impact on the efficiency of your efforts. As one interviewee told IAB, the impact brands get from digital spend (calculated based on marketing mix models) starts getting better within one year after in-housing begins.
Full Control & Transparency
In 2017, YouTube found itself in the middle of a digital ad scandal: world-known brands’ ads turned out to be shown next to extremist content. Two things got clear: brands need to watch the ad buying more closely and improve the targeting accuracy to ensure brand safety.
In-housing allows brands to gain greater control over what is going to happen and how by cutting out potentially unreliable third parties. Besides, using customer information for more accurate and detailed targeting can be taken to the new extremes if you go in-house. You (and your customers) won’t have to be concerned about the (mis)use of personal data by an agency partner – and this is a big deal in the world of GDPR compliance.
Reducing the role of external agencies is also beneficial for the brand’s adaptability. When the operations are carried out within your organization, you can make changes to your campaign in real time. Besides, you can get the most out of A/B tests as you can run more of them per month. This allows brands to achieve the better performance we’ve mentioned above.
The trend is clear – more and more brands are going to opt for in-house media buying. This is a common turn of events: once the technology becomes familiar and mature enough, companies start switching from employing the help of third-party providers to taking the matter in their hands.
Programmatic in-housing is by no means a piece of cake. It is a long costly process that will pay off only if approached wisely. So, if you’d like to make sure of it, reach out to us. Find out what IDAP has to offer.
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