Dive Brief:
- Forty-nine percent of ad agencies rely on their own technology for programmatic media buys, while 34% combine their own technology with third parties and 17% rely on third-party technology, according to new research findings from ExchangeWire and IPONWEB, titled “Agents of Change: The Rise of the Programmatic Media Agency.” Agencies in the EMEA region relied most on their own technology, with 58%, followed by 56% in North America and 33% in APAC.
- Nearly two-thirds of those using their own technology for programmatic media buying reported improvements in their ability to build relationships with publishers. Knowledge of the programmatic ecosystem is a key differential, said 51% of EMEA agencies, 33% in APAC and 26% in North America. However, 54% of those who use their own technology believe it’s a key differential versus the 41% that do not.
- The research also found that 71% cite cost of setup as a potential roadblock to building their own technology versus using a third party. Sixty-seven percent cited cost of maintenance. Agencies also revealed that owning their own technology was more cost effective than using a third party.
Dive Insight:
The research highlights the growing tend of marketers taking more ownership of their programmatic media buying as they seek to improve performance and transparency across the digital ad supply chain. Agencies that used their own technology reported improved abilities to build relationships with publishers and stronger performance in data activation, creative optimization, audience segmentation, campaign measurement and the incremental impact of media buys.
Brand marketers are also moving programmatic buying in-house, suggesting that agencies' programmatic offerings are capturing only a portion of clients' media-buying needs. Interactive Advertising Bureau survey released in May that found that 65% of brand marketers that purchase digital ads programmatically have either moved these functions in-house or plan to continue internalizing the functions. When brands are outsourcing, it is typically for highly-specialized programmatic functions such as technology build-outs, ad operations, data science and algorithm development, per the report.
By 2019, nearly two-thirds of all digital display ads will be programmatic, reaching an estimated $84.9 billion, Publicis Groupe Zenith projections show. Marketers clearly see bringing programmatic buying in house or developing their own technologies as a solution to some of the challenges that they’ve faced with digital advertising, including transparency and better measurement capabilities.
Challenges exist, however. Marketers often lack control over where their ads appear with programmatic buys. And, the transition to in-house programmatic buying takes a time and resources commitment, and the IAB released a checklist to help marketers overcome these challenges.
