Programmatic Trading – It’s not one size fits all

With the exponential growth of programmatic some brands are having conversations about “moving in house”, using their own trading desks rather than agencies’. Foxtel is a stand out success in doing so, plus a number of others have had rumblings.

Given much of the press conjecture, one could be forgiven for thinking agencies and brands sit on opposite sides of the fence from each other.

Some of this conversation comes with good reason. Technology is tearing down many barriers to entry, and the velocity of opportunities is only accelerating. Moreover, certain parts of agency-land, and the underpinning technology, has created mistrust by being opaque to the direct questions brands are really concerned about: where are my ads shown, are they actually seen and what is the real value of what is paid?

I, however, think much of this mistrust can be combatted. As agencies, we should be earning the right to be a trusted advisor to the brands we work with, helping them build and use the system(s) right for their businesses, and gain the huge benefits programmatic trading affords in the here-and-now, as well as the future opportunities.

Before we get into the right or wrong approaches, it’s important to cover the broad models we’re talking about:

Agency Trading Desk – our very own Accuen team here within Omnicom or the Xaxis, Cadreon, Vivaki, Amnet of the world. These teams are business units within the agency holding groups and, in general, act as an extension of the agency’s planning and buying team. This is broad brush strokes, they each have their own working models and USPs but you get the picture – brand dollars are managed by a resource that is an extension of the agency account management team.

Client-assisted / hybrid trading desk – These desks are a tailored solution set up specifically for a single brand, but housed and staffed by agency staff. They will almost certainly take advantage of the agency group buying power, but are integrated into the brand’s own team as well.

In-house – the name on the tin tells it all: while the brand may still lean on a media / creative agency for certain elements, they have employed a full team of traders on site to manage their activity and minimize their use of an agency.

So which is right? Well, leaning on the old proverb about giving a man a fish, I can’t just tell you there is a single approach. Every brand should be asking some clear questions of themselves, and building a trading model that fits their needs:

Scale of activity – There isn’t a direct correlation between dollars and resource requirement, but it is true that running large numbers of small burst campaigns or high value always-on activity requires more resource than a one-off run-of-network buy, to set-up, run and optimize. Do you only want to test a few dollars here and there or are you looking to run all your digital programmatically?

Complexity – Campaigns are more than just the dollars committed. The complexity built-in will guide the amount of touch needed. Are you doing some general prospecting- style display ads, or multiple retargeting, 1st and 3rd party data strategies across multiple product lines?

Managing changing opportunities – With new technology and data points being made available every day, do you have the time, manpower and willpower to continuously test and learn, audit and make the most of these opportunities? Scale also helps here, do you have the clout to be offered betas and first-to-market opportunities?

While programmatic is currently only really covering display, mobile and video, will you be ready to take advantage when TV, radio and out of home go programmatic?

Resource – Be honest here. I’m not saying that agencies are the biggest draw here, but as a brand if you’re thinking about building a trading desk in house, are you set up to hire, develop and retain the talent required to not only build, but keep this activity running? I can speak from experience to say the people you hire today will be looking for clear, quick progression. Are you set-up to offer this variety of role?

Data – Quite simply, do you have lots of your own customer data which can be made actionable with or without an agency, or do you need to rely on external data sources?

Above all, asking these questions should result in the transparency that seems to be often overlooked in the marketplace. All three models have their pro’s and con’s dependent on what you’re trying to achieve and the way your marketing operation works. For some, the quick turn-around, responsive resource, buying power and off-the-shelf data an agency trading desk can provide will be right.

For others, a model where the brand works with the agency to build a tailored solution will be the correct balance of data protection with flexible resource. Finally, for some, where the brand has sufficient buying power in market, can attract and nurture talent and has the time and will to build something from the ground up, doing it in-house has huge potential benefits.

For me, the most important thing is for the conversation between agency and brand to happen in the first place, in an open and transparent way. The agency role is to understand clients’ business needs and help build the solution that works, not offer a cookie-cutter.

 

This article was first published in Mumbrella: http://mumbrella.com.au/so-you-want-to-take-your-programmatic-in-house-303004

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