Dive Brief:
- WPP CEO Martin Sorrell called in-house programmatic buying—where companies bypass agencies for their automated ad buys—a “short-lived trend," according to the Wall Street Journal.
- “The sense we’re getting is clients are finding it very difficult to do even after a short period of time,” Sorrell said on an earnings call with analysts. WPP projects its own programmatic buying unit will reach $1.1 billion in sales this year.
- Recent research from the Association of National Advertisers found 79% of surveyed advertisers reported buying programmatic ads last year, up from 35% in 2014.
Dive Insight:
Taking programmatic buying in-house saves marketers agency fees and also allows them to keep control over their first-party data, but Sorrell disparaged companies going that route. "You only see it move in-house when companies are faced with really very serious economic conditions," he said.
Sorrell claimed that marketers have issues with retaining talent and investing in necessary technology when buying programmatically in-house. The ANA research found 31% of respondents had increased in-house capabilities to oversee programmatic.
Regardless whether bought in-house or by an agency partner, programmatic still faces questions about fraud and transparency. Marketers are aware of the fraud risk, with 70% of ANA survey respondents that bought programmatic ads last year reporting they were concerned about higher levels of bot fraud.
The ANA estimated that advertisers wasted about $7 billion on online ads that people didn’t see last year. At the same time, programmatic ad spending continues to grow with eMarketer estimating it will increase almost 40% this year to more than $21 billion.
