A new media model built for transparency
Programmatic is becoming the dominant digital ad placement process. On a journey toward advertising that is more accountable, productive and harmonious with branding, marketers are increasingly turning to programmatic buying for placing digital ads. Advances in tracking and measurement systems, analysis techniques, and precise audience targeting have helped make programmatic the norm for digital advertising.
The dynamics of programmatic in-housing
Brands are increasingly in-housing their programmatic efforts to various degrees. IAB’s survey of 119 U.S. advertisers found that 70 percent of brands are currently involved in programmatic ad buying, either in-housing their ad buying operations or utilizing a media agency.
Complete in-housing of all programmatic operations is less common. Instead of having complete ownership of the ad-serving tech stack, media strategy, ad operations, optimization, and stewardship, brands typically only in-house a partial amount of programmatic buying functions. Companies usually opt for a hybrid strategy in which they handle high-level and strategic functions internally and completely outsource, or work with partners, for other functions. In-housed capabilities often include media strategy, establishing KPIs, data management and direct control of contracts with data management platforms (DMPs) and demand-side platforms (DSPs). Limitations in time, resources and expertise lead many brands to outsource technology initiatives.
An IAB study of brand advertisers revealed the following among brands who are involved in programmatic buying, which represent 70 percent of all advertisers surveyed:
Challenges to consider
In-housing programmatic functions attracts brands seeking to improve ad performance, ROI and cost savings. The process of establishing these capabilities internally can reveal limitations in time, resources and a concern about interrupting organizational structure.
On their in-housing journeys, industry leaders have cited several critical challenges. The time commitment required to stand up a strong programmatic capability in-house is about one year. Brands may also need to coordinate several contracts for each entity involved in their programmatic efforts. The in-housing transition also presents a need for talent recruitment, staff training and an understanding of how programmatic functions will synthesize with other digital advertising activities.
About the research
The insights in this report are based on a synthesis of perspectives from subject matter experts, gathered through one-on-one interviews and a quantitative IAB survey of 119 U.S.-based brands. Participants represented brands and presided over programmatic ad placement at their organizations.