In programmatic you can throw a party, but let someone else do the planning

Consider this comparison. You’re hosting a massive marketing industry dinner, or maybe a high-stakes fundraiser with influential guests. Success is mission critical. But instead of manually researching and then inviting guests one by one and pouring over food preferences, dietary requirements and seating dynamics for weeks, you realize you need expert help and decide to act. Soon a professional event planner is on the case, rapidly analyzing thousands of variables, conflicting schedules and logistics to prepare the ideal guest list, beat seating chart politics and bring the entire event in on budget. In essence, that’s programmatic advertising.

But unlike our example to outsource the thousands of event planning variables to a professional, there’s a growing trend for marketers to attempt to bring programmatic advertising in-house. This has been driven in part by the desire by marketers to align programmatic advertising with their brand’s first party data, while also gaining greater control over the buy and placement process. It’s a solid goal but sadly, a surprising and complex lift for many brands, it turns out. An Accenture Interactive Study agrees, showing the number of companies who try this, but then end up outsourcing some or all programmatic work back to agencies, is actually as high as 62%. That’s caused by lack of tech expertise, overwhelming data management challenges and crucial talent shortages. So, given this, the question we’re looking at this month – and it’s an important one – is this: “are marketers under-estimating what a programmatic agency brings to the table.” The short answer is almost certainly “yes.” Here's how I see it.

Appetite doesn’t equal success

It’s logical to assume that, ideally, any data-centric practice like programmatic should stay close to the data source. But Forrester estimates that, out of those marketers that have tried to bring the practice in house, only 23% of companies are satisfied with their overall programmatic performance. The IAB (Interactive Advertising Bureau) reports there are critical contributing factors to failure. 67% of marketers who attempt in-house programmatic cite tech, expertise and talent as major roadblocks to success. Programmatic advertising requires deep expertise across all data analytics, real-time bidding (RTB), fraud detection, and platform management (like demand-side platforms and data management platforms). It’s this complexity that often overwhelms in-house teams and while marketers may have the appetite for more control, it can be easy to underestimate the scale, technological investment, and demands required to run successful programmatic campaigns.

How the right programmatic firm can boost the bottom line

First things first, the right agency really, really matters. Especially because the programmatic playing field is growing so fast. We’re on track, according to Statista, to see a global programmatic industry valued at $726 billion by 2026 – up from $1.5 billion in just 2022. That’s a staggering 48,300% jump – if that was even real math. As marketers pour more and more budget into programmatic vehicles, it’s great news for agency opportunity, but for those brands, vying for the best deals and ad vehicles in a highly competitive marketplace, that really means pressure to secure and deliver-on increasingly high-value ad placements. Ask yourself if your in-house team has the network and negotiating power needed to fight this and can they gain access to premium ad inventories in this kind of climate?? Or could the buying power of a specialist agency make your budget work far harder and smarter?? Take the case of Heineken in 2019, introducing the much anticipated Heineken 0.0 into an alcohol-free drinks market that was already drowning in soda brands, energy drinks and non-alcoholic beers. By partnering with the right programmatic firm, the brand saw enormous returns: a reach of 10 million targeted consumers, a jump of 32% engagement compared to previous campaigns without a partner, a 20% saving on their ad spend, awareness of 25% with key demo’s, and most critically, access to game-changing, premium ad inventory not available on open ad exchanges. A win in anyone’s book.

Bank on other benefits?

Programmatic firms bring other benefits too:

· ? Transparency: One of the other biggest challenges in digital advertising is the lack of transparency in media buying. And it’s big business too. Lack of transparency is the reason why global consumer products manufacturer Proctor & Gamble slashed their ad spend by $200 million in 2017. The move saw a switch to stringent controls, ad quality and monitoring of performance metrics. In programmatic, real-time monitoring, reporting and evaluation is baked into the process from day one with the right agency partner.

· ? Fraud protection: According to Juniper Research, ad fraud cost advertisers $68 billion globally in 2022, with ads being delivered to fraudulent sites and bots. It’s the reason Uber saved $100 million in their annual ad spend by working with a programmatic partner and sophisticated fraud detection technology to get to the bottom of the problem.

· ? Cost-Effective Buying: Programmatic advertising agencies have a distinct advantage when it comes to cost-efficient media buying. These agencies manage large budgets across industries and clients, which gives them enormous leverage when it comes to negotiating with platforms and publishers. By pooling clients' buying power, they secure lower CPMs (cost per thousand impressions) and better placements than almost any brand could negotiate on its own. Even global brands like Adidas can see returns. The leader cut ad costs by 15% but saw a 10% increase in return on spend (ROAS) through more efficient programmatic buying.

· ? Expert Knowldege and Advanced Technology: Running a successful programmatic campaign requires a deep understanding of the ecosystem, as well as access to advanced technology such as demand-side platforms (DSPs) and data management platforms (DMPs). Programmatic agencies bring a wealth of knowledge and tools to the table, ensuring campaigns are executed with a level of sophistication that is difficult to achieve with an in-house team.

Last word

Of course, there’s an argument for the cohesiveness of in-house disciplines, but as you consider your programmatic needs, know this: 84% of U.S. digital display ads in 2023 were programmatic. So for those marketers considering agency or in-house options, the pace of growth, penetration of programmatic ads, and the depth of knowledge, nuance and network firepower programmatic success now demands, one thing is very clear. There’s strength in numbers.