Show Me the Money? The Cost-Benefit Of Taking Programmatic In-House
By: Rachel Eckerling, Programmatic Director, Mediavest | Spark
The question of whether or not to bring a programmatic practice in-house is a big decision for many brands, and one that should be carefully evaluated before any action is taken. Far too often, companies consider this shift to be relatively easy, and a huge cost-saving measure; however, in practice, this is rarely the case. Measuring the true costs and benefits of moving programmatic in-house requires brands to consider not only the cost of moving talent from the agency, but the additional employees that are required to maintain a top-of-the-line programmatic operation. Further, its necessary to evaluate the impact that this shift will have on current staff, along with the loss of agency buying power and resources.
The Talent You See
The most visible resources that brands see and interact with are the day to day teams who handle campaign execution. When a programmatic team is overseen by agency partners, brands only pay for the resources needed based on planned investment levels. Bringing programmatic in-house also requires the hiring and training of full time staff; in many cases, multiple team members. If a company only pays for a percentage of programmatic talent with an agency relationship, the financial impact of bringing on full time talent may be costly.
It’s also no secret that programmatic talent is highly coveted in the marketplace, and companies must compete with agencies and the ad tech community to attract these skilled employees. As a result, firms will often look to hire only junior level traders to keep costs in line.
While a junior employee can get campaigns live, without oversight from senior level programmatic staff and continued advancement opportunities, brands are likely to see execution errors that could impact the company financially and contribute to higher turnover.
The Talent You Don’t See
When determining resources for an in-house programmatic team, many companies tend to consider the execution team as the only additional staff members that are needed. In actuality, there are typically a myriad of behind the scenes team members who contribute to the overall success of programmatic campaigns that may not have the same visibility as execution team members.
This additional talent often includes (but isn’t limited to) the following:
· Senior programmatic staff that train and provide guidance to junior team and lead education efforts across the company
· Legal teams that negotiate contracts and addendums with platforms and data providers
· Finance colleagues who facilitate billing and reconciliation for all programmatic vendors
· Analytics experts who interpret campaign data and extract learnings
· Tech pros that analyze and create quality standards for all tech and data used
· Data management and strategy people who manage the relationship between brands and data management platforms (if one exists and the staff isn’t already in place), lead ingestion efforts across the company, and work with execution staff on data utilization for campaign execution and optimization
· Ad operations employees who facilitate ad trafficking, creative assignment, ad verification, and other technical responsibilities
Impact On Internal Resources
Depending how many new programmatic staff members a company can bring on financially, existing employees would theoretically need to take on new tasks and assume additional hours to ensure that an in-house transition goes smoothly. This may cause more strain on resources that are already operating beyond capacity. The primary department that these additional tasks would fall on is likely Marketing. These team members would need to dedicate additional time to interview, onboard, and train incoming hires — in partnership with their colleagues in the legal, finance, and technology departments. These practices would then require training on how this theoretical change impacts their departments and programmatic processes, and would require knowledge on asking critical programmatic-related questions that drive favorable negotiations.
Negotiating for One Versus Many
Beyond resources, many companies also risk missing out on first-to-market opportunities, industry advancements, and new ideas that come from having programmatic operations live at an agency. The buying power of an agency holding company provides brands with access to opportunities that they may not receive otherwise. These include, but are not limited to:
· Cost-savings from holding company-level rates for platform licensing, accessing and onboarding data, ad serving, and ad verification
· Access to multiple platforms and data providers, Alpha or Beta opportunities with these providers, and proprietary processes and tools developed by the agency
· Knowledge sharing and expertise across verticals within an agency inclusive of cross-team sharing of tactics, platforms, new channel advancements, troubleshooting and best practices
Implications of Not Weighing All Factors
Whenever companies consider bringing ownership and accountability of all programmatic planning and execution in-house versus sticking with an agency model, it is certainly a lot to think through. Without a solid plan of action in place, brands run the risk of being taken advantage of, missing out on cost-savings and creating media waste. The programmatic landscape is evolving and advancing at such a rapid rate, taking the extra time to carefully consider your brand’s approach to the space and carefully evaluating the risks is absolutely imperative.