In 2019 Marketers Will Be Massively Turn Their Marketing Strategy to In-House

For a while now, programmatic has been something that brands could not live without, or, literally speaking, advertise without. Programmatic provides companies with a cheap route to buy automated ads and a way to place them where the target audience can see them best.

Advanced and handled by agencies, programmatic advertising has been available for brands for over a decade. All that advertisers had to do is to launch a campaign on programmatic platforms, pay commission for software rent and fees established by network participants. However, a few years ago the industry started to notice that companies are actively taking programmatic in-house. Is there an explanation for such a phenomenon, and is this strategy right for your business? Let’s take a look.

The “black-box” situation

In-house programmatic has managed to find its way into a lot of big-time marketing conferences, as well as, into the tech stacks of companies who are specializing in adtech. Throughout this whole period, before in-house appeared, the companies entrusted their media budgets to agencies and tech providers, who in many cases, inflated prices and personal commissions.

The problem with programmatic chain is that it is very complicated because there are so many players involved. Think about it, you have one platform for advertisers, another platform for publishers, the Ad Exchange, which connects the advertisers to the publishers, and let’s not forget about the entire platform that gathers and manages the data for digital marketing initiatives.

As you might have imagined, the more people involved in the process, the more expensive it becomes. However, don’t expect the advertisers to give you any specific numbers in terms of pricing because all they will be able to tell you is the price for 1000 impressions. Exactly how the money you pay is divided among all of the parties involved in the network is shrouded in mystery.

According to the Entrepreneur, around 70% of advertiser’s ad budget goes to ad network which negatively impacts the incomes of both publishers and advertisers. The lack of transparency is one of the biggest problems in programmatic advertising for all parties involved: publishers, advertisers and media buyers.

The industry-wide search for the solution

Given the problems mentioned above, the in-house approach is quickly gaining steam. According to the IAB (Interactive Advertising Bureau) advertising research held in 2018, almost half of advertisers (45%) is completely or partially involved in in-house programmatic. The ANA survey revealed the top reasons why media-buyers report the readiness to convert to in-house programmatic next year:

• Better audience targeting (74%)
• The ability to optimize in real-time (52%)
• Increasing campaign reach (48%)

Now, that in-house solutions gained scalability, smaller advertisers, agencies, and media-buyers have the opportunity to immerse themselves in custom programmatic solutions too. Companies of various sizes have started to realize that in-house technologies and data they receive with in-house approach are not only able to save their media-budgets, but also provide the new level of control and transparency over all internal processes.

GDPR and personal data

Ad industry experts know, in order to serve the targeted ads, the customers’ personal data is absolutely necessary, and the effect from advertising will only be as good as targeting allows it to. However, given the latest string of data breaches, customers are increasingly reluctant to hand over any personal information. A potential solution could be telling customers what data you will be collecting and how you plan to use it. This will also be useful given the new GDPR regulations enacted recently.

Since customers are weary of handing over any personal data, why would they share it with a media agency? Thus, the main advantage of in-house media buying is that brands collect information from users directly. The brands can eliminate the middleman, which allows retaining customers’ personal information without adding any extra parties in between.

Does it work for everyone?

While it may be tempting to bring advertising in house, it is important for you to set clear goals and understand exactly why people are retaking control over programmatic. If you would like to make media buying more effective, then online advertising in-housing is probably right for your brand. At the same time, it is important to have a comprehensive strategy and understand all of the internal processes that the company should go through.

There will be a lot of heavy lifting involved if you would like to take programmatic in-house. However, if you decide to build a solution on your own, the results are promising to pay off essentially in the long run:

• You will have the ability to access internal databases quicker which will allow you to make rapid adjustments if the situation changes. This way, you also can customize the technology to fit the individual needs of your brand and business objectives.
• Since you will have all of the statistics available, it will give you a full picture of customer behavior. Your marketing team will have all of the tools and information they need to craft a message that is directed towards a particular audience.
• Reduced time for your campaign to launch, thus eliminating the time wasted on planning, design, confirmation, and many other processes.

The cost of implementation

While many businesses are taking marketing strategy in-house, the cost of decision remains to be the main concern for the majority of entrepreneurs. Once upon a time, an in-house solution was only available for the big brands like Unilever, however, today it is a completely flexible decision that adapts to any company’s needs and budget.

The customization is valued like never before, and that’s why the majority of programmatic solutions are so costly. Even though DSPs serve as the data aggregators, they do not obtain audience data from second or third-party resources, therefore you need a data management platform to optimize the online media buying campaign. A basic data management platform could cost around $60,000 a year. In-house programmatic is an individually developed solution. If a brand needs additional targeting capacities, the in-house provider will always suit the product to the client’s objectives to grow their unique competitive advantages.

The last word

With all of the shifts on the market that we have observed recently, it is becoming more and more evident that companies are making all the right moves to stay ahead of the competition. Programmatic buying is a fast-paced environment where you are either getting ahead or falling behind.

Ultimately, the choice is yours regarding whether you should rent programmatic software or move it in-house. However, one thing is certain, you should do your due diligence and find out exactly what resources such a move would require and if it will be able to save you the problems of your brand in particular.