A new ANA survey revealed that more than a third of respondents (35 percent) have expanded their in-house programmatic media buying capabilities, and have subsequently reduced the role of external agencies that previously performed the same function.
The 35 percent figure marked a notable increase from a 2016 ANA/Forrester report that found only 14 percent of ANA marketers were reducing the role of their external agency as a result of in-house expansion.
The study also showed that while agencies still play an important role in campaign execution, most marketers prefer to set the strategy for their programmatic campaigns and own the contracts. The majority of respondents (69 percent) indicated they handle strategy and campaign direction in-house, while only 24 percent outsource the strategy and campaign direction to an agency partner.
In addition, 19 percent of respondents said they have opted in to an undisclosed programmatic model with their agency. This refers to media purchased for an advertiser that does not disclose the actual closing/winning bid prices, only the final price charged to the advertiser. This practice can hide agency margins and fees. This is a significant change from the 2016 ANA/Forrester survey, which indicated that 34 percent of respondents had opted in to an undisclosed programmatic model.
“It’s clear that a growing number of marketers are taking control of their media investments,” said ANA CEO Bob Liodice. “They’re making important changes to their programmatic buying practices to address media transparency concerns. Specifically, they’re moving sensitive responsibilities in-house and enhancing decision-making by better understanding their costs and media investment transactions. We urge all marketers to contemplate these developments and consider following suit.”
The study, “The State of Programmatic Media Buying,” also revealed the following:
- A large majority (78 percent) of respondents are either concerned or very concerned about brand safety issues in programmatic media buying.
- Companies are focusing their programmatic media buying on online display on a desktop (85 percent), followed by mobile display (74 percent), online video on a desktop (71 percent), and mobile video (62 percent).
- The top-cited benefits of programmatic buying are better audience targeting, the ability to build audience reach, and real-time optimization.
- Most respondents have one staff member who devotes 100 percent of his/her time to programmatic initiatives and three employees who work on programmatic initiatives as part of their other work responsibilities.
- Only 40 percent of respondents are comfortable about the level of transparency they receive with their programmatic media investments. Those who said they were uncomfortable cited factors including hidden costs, too many people in the middle of the transaction, and uncertainty on where ads actually run.
As part of the report, the ANA offered marketers the following recommendations for maximizing control over their programmatic media investments:
- Determine How Your Organization Will Define Programmatic Success. Set a clear path forward for your programmatic initiatives. Gather intelligence on how your peers are setting expectations for their campaigns and select your benchmarks intelligently.
- Build Internal Expertise. One of the major benefits of programmatic advertising is the ability to track the impact of a company’s investment and optimize ad campaigns in real time. But marketers can only take advantage of this when the marketing team knows how to navigate the data.
- Own the Data and Knowledge. Marketers should consider owning the contracts for the DMP, DSP, or both, and then give their agency access to the platform to run the campaigns. This gives brands more leverage to demand transparency into contracts and fees and a high degree of control over programmatic planning and execution, among other benefits.
- Understand the Tradeoffs of an Undisclosed Programmatic Model. All marketers should ask questions and fully understand the tradeoffs between disclosed (more transparency) and undisclosed (no transparency but perhaps cheaper) to make the deals that are in their best interests.