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Taking programmatic in-house: What you need to know

Taking programmatic buying in-house is becoming increasingly common but there are a number of things to consider before making the move.

Taking programmatic in-house is an increasingly popular option for marketers. According to Pivotal Research Group analyst Brian Wieser, 15 of the top 200 US advertisers have taken media-buying in-house due to their ability to buy programmatically.

“This appeared to us as a relatively significant escalation from the last time we explored the topic,” Wieser says. It is not clear when he last explored the topic, but brands such as Procter & Gamble, L’Oreal and RB have all brought at least some aspects of their programmatic buying in-house.

Still more are reconsidering how they buy. According to a study by the WFA, 90% of advertisers are reviewing how they buy programmatic ads.

Yet it is by no means the easy option. Although in-housing may provide brands with more transparency over where programmatic ads are placed and greater understanding of how their budget is being spent, some companies simply don’t have the expertise to do so.

There are also different ways of in-housing. For some brands it means setting up their own agency trading desk and using that to deal directly with demand side platforms (DSP). For others it involves bringing on board an ad tech partner or an agency consultancy.

Unilever, for example, has a dedicated unit within its agency Mindshare called Ultra, which works solely on its programmatic interests. In contrast, Reckitt Benckiser has opted for an internal programmatic team, while Lastminute.com has its own in-house trading desk

“At Lastminute.com we have our own in-house trading desk. That gives us a great opportunity to take control of where our ads are placed and maximise our buying budgets.

“We also use a number of demand-side platforms (DSP) to buy inventory that overlays our own ecommerce data, making it more intelligent and allowing us to connect with customers throughout the web,” Alessandra Di Lorenzo, chief commercial officer for advertising and partnerships at Lastminute.com, says.

Besides the model, there are a number of other questions brand need to consider before working out if going in-house is the right solution for them.

Assess business capabilities

Some companies simply don’t have the capacity or budget to make in-house work effectively so checking your business’ capability and what can work for you individually is important.

Brands that use search in-house might automatically assume they should take programmatic in house but marketers must understand that it isn’t this straightforward.

“Programmatic is a much more fragmented messy game than search. In-housing can be the wrong answer to the right problem,” warns Martin Kelly of Infectious Media.

Marketers should plan ahead and consider their business capabilities, both present and future, and make sure their budgets and business structure is suitable or can be adapted to an in-house strategy in the first place.

Stick to budgets

Preparation is key when going in-house. You will now be collecting and managing your own data so you need to make sure you learn new or different ways to set up campaigns. Having a team that is prepared and understands in depth how programmatic advertising works will ensure that you stick to budgets and don’t carelessly waste funds.

Hire the right talent

The move will introduce new roles so you need to either hire new staff or invest in the right sort of training to up-skill current employees. Failing to do so could mean inexperienced employees don’t budget properly or are unsure of how to make the most of first-party data later down the line.

The talent pool can also be quite limited in programmatic media so understanding the qualities you are looking for is important.

Nespresso relies mainly on its agencies to work on the buy and Sophie Dufouleur, global content and social media group manager at Nestlé Nespresso, warns about the talent shortage.

“It’s very heavy to have programmatic in-house. You need to have the right team and there’s a shortage of people who understand programmatic,” she explains.

Programmatic also requires different types of skills. Here, people need to understand data, as well as consumer behaviour.

“As well as being analytically and technically literate, they need to be curious about the human element of why people behave the way they do,” says Lastminute.com’s Di Lorenzo.

Get others on board

If other members of the team are not on board it can prove problematic, particularly between different departments. Some departments, for example those in finance, may object to the initial cost involved in investing in the right technology to work effectively in-house, as it can be a pricey investment. It is therefore important to have all members of the team on board and to make sure they understand how the move will benefit the whole business through sale, ROI and customer satisfaction, not just the marketing department.

“Having the right staff will help to educate others internally, ensuring the organisation understands what programmatic buying is and what its benefits are,” Di Lorenzo explains.

This could also break down internal silos, bringing tech and creative teams together to produce better results.

Experiment and learn by testing

Though it is important to get the whole team on board, prepare your business strategy and hiring, it is crucial you experiment, especially in the early days. Different models will suit different companies so by testing new tactics and strategies early on you can adapt your business model to see what works for you.

You should perform tests with smaller budgets first to work out what is working well ahead of time.

Personalisation is also key when it comes to programmatic and as your company develops or your target demographics change, so to should the way you deal with your programmatic ad buying. As you prepare to adapt or make changes to your business model so will your focus and budgets.

Make the most of first-party data

One of the main benefits of going in-house is the fact you can make the most of your own first-party customer data, knowing it is safe. However, in order to do so you need to make sure you have the right teams in place who really understand how programmatic works and how to analyse and deliver personalised messages to the right people and in the appropriate manner.

You should look into what is working for individual groups rather than your customers on a wider scale. This is something that will continue to change and will need to be constantly analysed and explored.

Keep innovating

As with any other form of marketing you must ensure you keep up to date with the latest innovations and trends. This is even more important when you go in-house as you will no longer be relying on agencies to keep up-to-date for you and this can require a big budget.

You will also need to refresh your actual campaigns by monitoring performance and trying new things rather than just simply relying on what has worked in the past.

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by  Rachel Gee
source: Marketing Week

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