I’ve seen quite a bit written about the dramatic industry shift to advertiser-owned, in-house programmatic strategies recently. Netflix and Stubhub have captured headlines for their respective moves to “in house.” In a Mediapost article this month, my respected partner on the sell side presented some provocative data from Index Exchange suggesting that the traditional programmatic operating models (agency, trading desk and programmatic networks) are flat lining, or even seeing their share decline.
Simply looking at the raw data without context creates a misleading picture for how the buys are being executed
Matt Thornton, Google Canada
If you only analyze the raw exchange data at the surface level, you’ll buy into the concept that brands are quickly taking programmatic ad buying operations in house. In fact, all that we’re seeing in this data is “who” is buying but not “how” they’re buying. What I’m seeing in my role from the buy side at DoubleClick is a much less dramatic move towards in-house programmatic operations, but a very focussed effort from brands to take control of their data.
This could very well prove to be the programmatic utopia for Canadian advertisers seeking to gain all the transparency and control that data ownership will deliver. But it may not generate the scale they need to justify the investment it would require to bring programmatic operations in house. Simply looking at the raw data without context creates a misleading picture for how the buys are being executed.
When talking about in-house programmatic, we can’t lose sight of the fact that Canada is a market where the skills required to execute well are still scarce. Programmatic is a space that is often compared to search marketing — auction-based bidding with similar KPI’s, but much more robust and fast moving. To successfully connect with your audience across screens and formats, there is a lot to get in front of (viewability, verification, fraud, programmatic direct, reserve, the list goes on and it’s on and it’s only going to get longer).
With an industry in constant motion, what we’re seeing is advertisers taking ownership of the data but leaning on the expertise of their agency or trading desk to operate the strategy.
So why am I throwing a wet blanket on everyone’s excitement about insourcing? I’d argue this is the advertisers’ opportunity to have their cake and eat it too. The panel topic we could not get away from in 2014 was transparency. It’s still here in 2015, but without the same air of discord. Advertisers who require transparency have options, and one of those options is to take control of their data. For a marketer, control of your data has many benefits, not the least of which is portability as many advertisers these days work across a complex matrix of agency and platform partners.
This brings us back to the proverbial chart that shows marketer-driven programmatic volume headed “up and to the right” and everything else in a flat line. The agencies and trading desks have as large a role to play in the “up and to the right” as they do in the flat line. Sure, the Netflix and Stubhub’s are out there, and you can bet we’ll see some good examples of true insourcing in Canada. However, more commonly what we’re seeing is the agency pivoting to a service model that supports that brand in its strategy to own and control their data in a transparent programmatic buying model.
Without the right partnerships, marketers risk falling behind the pace of innovation and keeping the cupboard stocked with the right talent to maintain an edge on their competitors. This is creating a growing opportunity for agencies to build out programmatic and analytical expertise around platforms the advertiser controls. It’s taken some time, but we’re now moving out of the skills desert we were in 12 months ago. Programmatic centers of excellence are emerging in Canada and they’re being built within the constructs of forward thinking digital agencies.
Marketers have never had better options when it comes to delivering on the promises of programmatic buying. Getting ahead doesn’t require an insourcing investment case. It’s about choosing the right partners and assuming control of the data. The raw data can be deceiving without context, less deceiving if you own it.
Matt Thornton is the head of advertiser and agency media platforms at Google Canada
