What is Programmatic Inhousing?
The Interactive Advertising Bureau (IAB) defines fully autonomous in-house programmatic capability as in-housing “where the ad-serving tech stack is owned and (or) operated by the brand and integrated with media strategy, ad operations, optimization, and stewardship – all internal functions.”
In simple terms, programmatic in-housing can be defined as a brand bringing in the advertising technology to run programmatic campaigns under its martech-adtech stack and managing most ad operations internally.
There are multiple benefits of bringing programmatic advertising in-house. Brands that do so enjoy increased transparency, swift & efficient workflows, saved costs, new business opportunities, more manageable & safer activation of first party data, along with having a branded self-serving advertising platform. We have covered the benefits of programmatic in-housing in detail in one of our previous blogs.
How is the market adopting?
As per the “2020 International Report on Programmatic In-Housing” by IAB, around 21% of organizations surveyed have completely moved programmatic advertising in-house. Almost half (48%) have partially moved programmatic buying in-house.
According to the same research, organizations in the European Union are well ahead of the rest of the world, with 74% entirely or partially moved programmatic in-house.
Close to 69% of all brands have completely or partially moved programmatic advertising in-house in the US, whereas in LATAM, the figure stands at 64%.
An article on the World Federation of Advertisers cites that 60% of marketers in APAC already have dedicated in-house programmatic talent.
In short, all major advertisers across geographies are exploring the in-housing of programmatic advertising. Some are already reaping huge benefits. Unilever, for example, supposedly saved €500m by bringing its marketing tech and strategy in-house.
What’s driving programmatic in-housing?
- Increased transparency - Ad fraud and lack of trust in advertising agencies have been crucial drivers for organizations taking programmatic in-house. With the ownership of the entire platform, workflows, and data staying with you, programmatic no longer remains a Black Box. An in-house platform provides a clearer and closer view of media buying, campaign optimization, ad wastage, and fraud. With unified ad operations, marketers are better positioned to see what’s happening with their media spends.
- Push for data privacy - Policymakers across the globe are rallying to protect users’ data and regulate how advertisers are using that data. With GDPR, the EU is at the forefront of this revolution, closely followed by the US. Getting control over their programmatic campaigns will help marketing and leadership teams implement the correct data governance protocols.
- Harnessing the first-party data - Continuing from the privacy debate, digital advertising as we know it is going to change for good. Third-party cookies that have been the cornerstone of user tracking and targeting in online advertising will deprecate within a year now. Building on their ad-tech stack by bringing technology in-house or through long-term partnerships with the right technology provider to mobilize their first-party data is the number one priority for marketing and tech teams across industries.
- Accelerated digital advertising adoption - We have seen unprecedented growth in digital adoption in the last few years. This growth skyrocketed in 2020 when the physical world was shut down for all practical purposes. Traditional industries like retail are seeing drastic changes in how their customers shop. With the right set of technologies, organizations enable their customers to experience the same level of comfort and convenience online as shopping offline. This hybridization of customer experience will give way to new advertising mediums, and programmatic will be its core. Organizations are actively taking control of their offline and online inventories through integrated in-house platforms.
Obstacles in Programmatic Inhousing
Though it comes with a range of benefits, the path to programmatic in-housing isn’t free from roadblocks. In the report titled“ The State of In-housing 2020,” released by Bannerflow and Digiday, below are the top barriers in the path of in-housing for organizations -
- Lack of existing talent - Taking programmatic in-house needs resources with a wide variety of skill sets, ranging from developers to data scientists and ad-ops specialists to digital advertisers. Finding all of these skilled professionals within an organization is next to impossible.
- Not enough resources to build a competent in-house team - Hiring aides with the skill sets mentioned above can be a long and arduous process.
- Lack of internal support - Getting everyone in the leadership, marketing, data, and technology teams on board to start building your programmatic platform would again be a daunting task.
- Lack of knowledge around programmatic buying - The programmatic is constantly evolving. This is where the expertise of an agency or an external partner comes in handy. Having worked with various clients, an advertising agency or a technology provider has the upper hand compared to an in-house team.
- Difficulty to communicate the value of in-housing programmatic - Even when an organization embarks on the journey to bring ad tech in-house, justifying the cost and ROI from the system can be a difficult task.
Most of the above barriers can be overcome by engaging with the right partners(s).
Is Inhousing for You?
Inhousing programmatic advertising is a mammoth task involving a range of data, governance, and infrastructure challenges. Before starting with the blueprint, one must be very clear of the time, resources, and costs involved and proceed only once the benefits outweigh the risks of disrupting the existing processes. Owing to the high level of pressure it puts on an organization’s internal structure, according to IAB, close to 13% of the organizations pulled out of in-housing initiatives after testing.
One other way to evaluate this decision is to look into the overall costs that the organization currently incurs in programmatic advertising and the results it generates. Suppose your organization has been investing in programmatic advertising for quite some time and wants to improve it further by taking better control. In that case, you can start with the blueprint of your inhousing process.
Two factors that cannot be traded off with costs are time and quality resources. Even when your organization has bottomless pockets, creating an ad tech ecosystem from scratch can be daunting and time-consuming.
Having a partner like Kritter can ease off this journey for you. Our on-premise solution can help you build and scale your programmatic platform within months with constant support from our experts.