5 Mistakes Marketers Make During In-house Programmatic Adoption
To digital advertisers, programmatic has transformed from the holy grail to an effective tool to regain control over ad budgets.
Historically, advertisers’ media buying activities were handled by advertising agencies. An ad agency took a fee from the advertiser, negotiated the fixed CPM price, and bought cheaper traffic, taking the difference in CPM and putting it into their pockets. Programmatic advertising has revealed the downsides of this cooperation: lack of transparency, low-quality traffic, and fraud.
More and more, advertisers are bringing programmatic media buying in-house: nearly 47% of advertisers have already started advertising programmatically (Opens as a PDF) without relying on third-party ad agencies.
We gathered five major issues that advertisers face on their way to in-house programmatic adoption.
Low Basic Knowledge
According to an InMobi report, 90% of brands are seeking to adopt programmatic in-house, despite half of them having very basic knowledge of what programmatic actually is. Marketers, business owners, and CMOs are working with ad agencies or doing their programmatic media buying in-house, without realizing its full potential. Penny-pinching advertisers cut off the ad expenses and reinvest the money in programmatic media buying across multiple channels, but up to 20% of European advertisers failed in their attempts to bring programmatic in-house.
The programmatic advertising industry is in need of quality hires. Both brands and agencies need to grow their own programmatic guru who’ll identify the most valuable inventory, get the most out of the advertising budgets, and continuously improve programmatic ad performance. This person should also look through crucial metrics in the reports and gather audience insights to improve targeting and creatives.
In the meantime, advertisers and brands should invest their time in learning the nuances of programmatic and be able to decide on bringing 100% of programmatic in-house or use a hybrid in-house and ad agency model.
Advertisers learn quickly: Unilever announced it was able to save €500m of its ad budget by bringing certain elements of its marketing in-house. Small- and mid-size brands, on the other hand, will continue to rely on ad agencies while searching for programmatic professionals to hire for their team.
Unsettled Requirements for Ad Agencies
Programmatic in-house adoption forced ad agencies to re-think the terms of cooperation with advertisers. As well as value from ad spends, another reason companies are transferring in-house has to do with transparency and brand safety. Negotiating and buying all digital media in-house allows greater control and visibility over where advertising is placed.
Transparency and brand safety are two major reasons why brands are considering to shift their programmatic media buying in-house. Their demands for quality traffic increased: ad visibility and conversions have become advertisers' major concern.
Agencies, however, still have strong points on their side: Being connected with multiple traffic sources, they can negotiate the best price with ad networks. Those agencies who were the first to foresee the upcoming in-housing trend and lack of programmatic hires, armed themselves with qualified folks, real pros in programmatic.
Blending in-house and outsource is an essential step in advertiser evolution: it starts from completely relying on ad agencies, then moving to an ad agency and demand-side platform (DSP) and then slowly shifting the bigger part of the media buying in-house.
You don’t necessarily need to abandon ad agencies, but you should discuss maximum transparency and brand-safety.
Choosing the Right Software
If you've stepped onto the uneven path of in-house programmatic adoption, you must be familiar with the term "demand-side platform."
A demand-side platform (DSP) is an ad software that helps advertisers and ad agencies buy impressions from publishers in real-time. The best part of a DSP is that advertisers can purchase rich media, video, mobile, and native ads from one account and see unified analytics on multiple ad campaigns' performance.
Other benefits of DSPs include:
- Transparency: advertisers see all the traffic sources and evaluate each of them.
- Global Reach: access to the biggest traffic sources worldwide on mobile and desktop.
- Effective Targeting: you can attract your audience globally with 30+ precise targeting options.
- Reporting and Campaign Analytics: while ads are running on thousands of websites simultaneously, you can aggregate their performance all into one comprehensive report.
- Automatic optimization: the platform usually has built-in ad campaign optimization features (eg bidding autopilot)
The problem here lies on the desire of advertisers and ad agencies to create their own DSP from scratch. Or either way: Combine three to four DSPs to fulfill their needs.
While DSPs for advertisers simplify their ability to reach audiences across ad formats, devices, and channels, each DSP has its own set of data, and the amount of information can quickly become overwhelming. Less is more: Choose the DSP that meets all of your advertising requirements, schedule demos, and apply for free trials.
If you want a fully tailored solution, consider white-labeling one instead of building your DSP from scratch. A white label DSP allows you to get a fully customized branded solution to manage your cross-channel advertising.
Minimum Time Commitment
Shifting your media buying activities in-house, even partially, should be planned well ahead of time. If you work for the brand, the majority of your C-level buddies will undoubtedly ask "How long will the integration process take?"
Surprisingly, everyone’s expecting quick and painless adoption that will bring immediate results.
High pressure in the unexplored in-house programmatic environment may cause frustration, even to the best of us.
For brands planning to integrate programmatic capabilities in-house, the IAB recommends that they take their time. According to its recent research, setting up the internal channels may take 12 months, at the least.
If you want a quick start, consider a DSP with pre-setup traffic sources. This way you can start buying traffic the moment you integrate it.
Willful Ignorance of Fraud
Even taking transparency and brand safety off the table, fraudulent traffic remains a major problem for brands when it comes to buying traffic programmatically.
You’ll be surprised to see that fraudsters are getting smarter and even the best software can fail to protect 100% of the DSP traffic. Programmatic buys are done in an open exchange market, where there is an increased chance for bots to interfere and cause financial losses. According to Bot Baseline Report, the economic losses due to bot fraud were estimated to reach $6.5 billion globally in 2017.
Some advertisers prefer not to ask where their traffic comes from..but you should.
If you’re operating through a DSP or partner with the ad agency, make sure it thoroughly checks its incoming traffic. Run A/B tests and use third-party ad verifications in your DSP for detecting both invalid and non-human traffic. This will ultimately help you make sure that the traffic you are getting is clean.
Bringing programmatic in-house gives you improved performance, enhanced targeting options, better transparency, and control. Invest time to prepare your brand for the big shift and enjoy all the benefits of in-house programmatic.
Have you already adopted programmatic in-house? Share your thoughts by posting a comment!