Programmatic: Is going in-house the wrong answer to the right question?

With 90% of advertisers reviewing how they buy programmatic ads, is taking the practice in-house a solution or likely to throw up just as many challenges?

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Around 90% of advertisers are reviewing and resetting how they buy programmatic ads as concerns around transparency, rebates and ad fraud rise.

That was the conclusion of a study by the WFA this week, which found in-house desks are now used by a fifth of its members, up from almost none two years ago. And use of private marketplaces where advertisers deal directly with publishers is increasing 67%.

READ MORE: 90% of advertisers looking to change how they buy programmatic ads

The need for a new approach comes after concerns over agency rebates and ad fraud. Last year, the ANA claimed senior executives at ad agencies are aware and regularly mandate controversial practices that are often not disclosed to clients. These include cash rebates, rebates as inventory credits and ‘service agreements’ for non-media services such as consulting or research.

There has also been concern over ad fraud with organisations not pressuring publishers enough to not monetise or sell fraudulent impressions, with marketers such as Unilever’s CMO Keith Weed, urging brands not to allow suppliers to “mark their own homework”.

Given that backdrop it is not surprising that brands want to know more about how their digital advertising is being bought and, in some cases, take more control. Brands such as Comparethemarket.com and Confused.com, as well as travel brands including Expedia and Lastminute.com have moved their attention away from agency-trading desks (ATD) in favour of in-house options.

“At Lastminute.com we have our own in-house trading desk. That gives us a great opportunity to take control of where our ads are placed and maximise our buying budgets.

“We also use a number of demand-side platforms (DSP) to buy inventory that overlays our own ecommerce data, making it more intelligent and allowing us to connect with customers throughout the web,” Alessandra Di Lorenzo, chief commercial officer for advertising and partnerships at Lastminute.com, tells Marketing Week.

Di Lorenzo says one of the key reasons for this move was the importance of data. Lastminute.com is increasingly buying advertising programmatically because of the ability to bid in real-time bidding tools and use its rich data to better monetise its inventory and to find and target customers when they are browsing on third-party sites.

Di Lorenzo believes the “black box model” is “no longer sustainable” and and that two emerging markets will play a “big part” in helping advertisers take control. These include private marketplaces, where advertisers can “cherry pick where ads are going and what data is attached to them” and programmatic guaranteed, which will simplify the process of media buying.

The rise of programmatic

The fact advertisers are reviewing their programmatic buying should not be that surprising given its explosive growth over the past few years. Programmatic was expected to account for around 70% of all digital display in the UK last year, according to eMarketer, and is becoming increasingly common in other media including TV.

Martin Kelly, CEO of independent programmatic agency Infectious Media,  says it makes sense for marketers to react to major changes in the industry brought about by the rise of programmatic.

“Most advertisers are pleased when they see there are options. It allows brands to assess what is right for them and their own needs,” he says.

However, Kelly warns advertisers not to be too rash when changing their strategy as there is a misconception that programmatic ad buying is like paid search.

People go in-house for more control and transparency and in some ways these are the right drivers. But in-housing can be the wrong answer to the right problem.

Martin Kelly, Infectious Media

“A lot of brands that do paid search in-house might automatically assume they should take programmatic in-house, but programmatic is a much more fragmented, messy game than search,” he explains.

Kelly warns marketers to consider all their options and goes as far as to say he would challenge anyone that takes programmatic in-house and thinks they are doing a good job, as there is much more to it.

“People go in-house for more control and transparency and in some ways these are the right drivers. But in-housing can be the wrong answer to the right problem,” he says.

Instead, marketers should focus on education and understanding what model suits them, rather than assuming that in-house is the right answer. For some, agency trading desks remain the best bet to ensure they have expertise on hand while brands with more expertise might look to independents, in-house or a combination.

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