Whether in-house, outsource, or anything in between, agencies can – and do – help

John Wittesaele is president EMEA at Xaxis.

Programmatic is now mainstream – expected to account for almost 90% of digital display ad spend in the UK next year – so brands naturally want to understand it better and gain more control over how their advertising budgets are spent.

To achieve this greater level of understanding and control, many brands are taking steps towards in-housing programmatic. An IAB study conducted across multiple European markets revealed that 86% of programmatically active brands already have some in-house capability. As well as providing the opportunity to learn about the programmatic space, in-housing can enable brands to standardise part of the stack, retain control over their valuable first-party data, and own direct contracts with technology vendors such as demand-side platforms, ultimately increasing transparency.

But, first, we need to be clear: the question has never been about whether an advertiser should in-house or outsource programmatic buying, it has always been about which of the many pieces of this immensely complex and evolving process should sit where. And the answer to that remains: “It depends.”

All or nothing?

Often seen as an all-or-nothing move, the in-house question is never so simple. Like many digital advertising concepts, the definition of in-housing is nuanced and depends on how far brands want to take independent efforts and where they want to rely on specialist partners. The majority of the brands that reported in-house capabilities in the IAB study were only taking small steps with partial capabilities involving media agencies.

The study showed that, as programmatic has gained a much greater share of media investment, brands are most likely to bring strategic pieces like data strategy and goal setting into their business. Other pieces like third-party audience data, brand safety, ad verification, and algorithmic modelling remain almost exclusively provided by specialists. But even on strategy, agencies – whether small independents or major media agencies – still rightly find themselves as valued consultants.

Depending on a whole host of factors, advertisers are re-evaluating the right mix for them. They can choose to maintain some functions internally, outsource others, and also take a middle-ground approach where experienced agency employees are embedded into their organisation to facilitate programmatic execution and optimisation.  

Agencies have irreplaceable assets

While partial in-housing can bring multiple benefits to brands, they have a day job to do and programmatic is not usually a core job function. While the prospect of in-housing can be attractive, nobody can deny that agencies are able to deliver valuable assets crucial for media effectiveness – whether programmatic or otherwise – including differentiated technology platforms, extensive networks of publisher partners, and attractive employer brands that draw media talent and expertise, who then work across sectors, clients, and markets.

Brands may employ strategists and performance analysts in-house, but they are still highly likely to use agency partners to access a wealth of experienced developers, engineers, ops managers, traders, and data scientists, with only the very biggest brands able to effectively recruit and support these functions in-house. Even then, purpose-built AI and machine learning technology – and the people required to build and use such tools – are now crucial for competitive advantage in programmatic, both for developing strategy and driving value.

It is a rare advertiser that is willing or able to build and maintain this kind of industry-specific innovation.

Agencies are evolving, always

While agencies are still by far the most significant programmatic buying point, the role of an agency is changing. Only client-driven agencies or providers of any sort will thrive, and that means adapting services and solutions to meet clients’ ever-evolving needs.

So, while agencies with an all-inclusive, outcome-driven model can drive the greatest value, the complementary and consultative services that offer expertise and advice around problematic topics, such as the execution of data audits, the implementation of attribution and measurement, and the use of machine learning algorithms in the decision-making process are also important.

Sometimes the agency role will be to support a brand on the path to bringing programmatic buying more deeply into their business – particularly if this will ultimately provide the most value for the client.

In a world where brands are spending vast sums of money on programmatic advertising, there are very valid reasons for bringing key pieces in-house. But there is no better qualified partner to help them understand if and how such a process could work – nor support them before, during, and after – than their agency. So, whether in-house, outsource, or anything in between, agencies can, do and will continue to help.

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

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