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The price of entry for programmatic

Highlights
  • For brands ready to walk the programmatic road alone, there are a few things to consider beginning with cost
  • Having the right skillset is critical
  • Great data also helps
  • Keep things simple
  • The more transactional ‘insertion order style’ business is ripe for programmatic transformation

The automation of digital media buying has been on the rise for a number of years now and the benefits of programmatic and RTB (real time bidding) are highly documented. As part of its natural evolution some of the more experienced and confident brands are ready to take the programmatic road alone with a client-side trading desk. Is this a good idea, one may ask? In two words, it depends.

The first thing to consider is cost: Many agency heads see a move to programmatic trading as an expensive undertaking; especially in Southeast Asia, where experienced people come at a premium. Yet many brands are already running elements of digital marketing in-house, such as SEO, paid search, social media and some affiliate marketing. Adding a biddable display and video component is the natural next step. It will require training because it’s a slightly different media planning skill set, but most service providers offer flexible agreements, from a fully managed service to ad-hoc support for self-serve accounts, with a hybrid in between until the in-house team is up to speed.

The transition doesn’t have to happen at once. Just as with most Agency Trading Desks, it can be built gradually over time, so the team acquires the right skills, rather than the agency buying in top talent at the outset. Meeting with some of the leading demand-side platforms (DSPs) will give a good understanding of key planning and optimisation considerations needed to effect successful campaigns.

The direct response elements of display would be a good place to start, giving you the best chance of an early ROI that outperforms the previous agency or agency trading desk arrangement. Headcount, media costs and agency fees should offer savings to offset the resource cost, but allow a grace period. You probably won’t see all the benefits on your first campaign.

Having the right skillset is critical. Whilst in-sourcing advertising automation makes sense, but media dollars can be wasted with the click of a button. It requires keen attention to detail and tactics are learned and refined over time. Navigating through the process requires smart marketers who are able to quickly learn new skills. They’ll also need a supportive and collaborative environment where they can access the right information and feel empowered to test and learn. That’s why tech savvy, data orientated businesses are obvious candidates for an internal trading desk – they’ll have the experience already in place and can hit the road running.

Having great data also helps. Being able to apply it directly through a programmatic platform will power more informed, tailored and accurate marketing. It also provides a greater opportunity to share cross-channel findings, be more agile and experiment more. Richer client data married with programmatic channels and combined with multi-touch attribution, will allow campaigns to broaden from an acquisition focus to marketing that optimises lifetime customer value or customer reactivation.

Whilst media agencies are becoming more like data companies, there are still certain data sets brands won’t want to share – another reason to bring the technology in-house. In fact, this is the crux of the matter: clients who have the scale to make their own deals will always want control over their data and technology relationships. It’s particularly the case in Southeast Asia, where the consistency of aggregated data is preferable to the fragmented data sets, trading practices and pricing structures that apply across multiple markets.

Keeping things as simple as possible is crucial. Technology should be making things easier rather than harder. If all we’re doing is adding in additional layers of complexity, then as technology providers we have failed.

For most large clients, in-house trading desks make sense. It allows brands to take control of their campaigns and react quickly when their market needs them to. They’ll need significant and consistent spend levels to deliver ROI and, as with anything new, they’ll need help when taking those first few steps. Those brands that have not yet started out on their programmatic journey should look to their media agencies to get them acquainted. Those already with some elements of their media buying executed internally, who have witnessed first-hand the benefits and returns programmatic buying has to offer, should be ready to take the next step.

Ultimately the discussion about where the trading desk sits should be focused around control over data, technology, existing trading partnerships and transparency. It’s not a rationale for disintermediation of the agency layer. For larger experienced brands their media agencies will likely play a big part in helping them facilitate digital trading and may well provide resource for them long-term. Even if they move away from this level of support over time, agencies will continue to support brands for the more high touch tent-pole sponsorship campaigns, as well as to assist with overall brand strategy and direction. So, agencies still have a big role to play, dealing with the more bespoke elements of campaigns, but the more transactional ‘insertion order style’ business is ripe for programmatic transformation and those closest to the customer data are in the best position to pull this off.

Alex Khan

Alex Khan is the Managing Director APAC at Smaato.
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