Programmatic advertising is an algorithm-driven targeting of ad units to a specific set of audiences, this is a new trend which has rapidly picked up a lot of attention especially with the marketers. Yes, programmatic is creating huge waves in the world of digital advertising and has become the new norm of this industry.
Research from Association of National Advertisers (ANA) and Forrester says, “31% of marketers have increased their in-house capabilities for managing programmatic buying”. Programmatic Advertising is also being called the future of marketing, no wonder more and more agencies and brands are turning towards taking all their programmatic activity in-house instead of working with external resources.
Well, there are multiple reasons why bringing programmatic in-house is becoming ever more popular today, and this blog aims to discuss just that.
What Is Programmatic Advertising?
Programmatic advertising has totally transformed the face of online advertising, even though there is a lot of confusion around this concept. Explaining in simple words, “Programmatic” ad buying basically refers to the use of software to purchase digital advertising. This is what sets it apart from the traditional process which involves RFPs, manual insertion orders, and human negotiations. Basically, it is using trained and intelligent machines to buy advertisements. Let’s break it down further for better understanding:
- Increased Efficiency in Digital Ad Buying
Efficiency is the most important reason for the rise of Programmatic Advertising. Earlier, digital ads were traded by human salespeople and ad buyers who were sometimes unreliable and expensive. The programmatic technology eliminates the human interventions in digital ad buying process making the entire process more risk-free, efficient and cheaper.
- Technology To Replace Menial Human Interaction
Programmatic technology replaced some of the most menial tasks that humans would have to handle. This means marketers would get to spend more of their time planning and strategizing their campaigns instead of getting bogged down in administration.
- Better Ad Relevancy
Programmatic technology allows the advertisers to target audience segments who are most likely to be interested in what they are selling. Bids for ad impressions are made in real time automatically when the system sees a cookie or mobile identifier which matches the targeting criteria set by the advertiser.
- Future Of Ad Buying
Programmatic ad buying is on the rise. Increasing number of agencies are considering buying more of media through programmatic channels. Many brands have even started building their in-house teams for handling their programmatic ad buying. Currently, Programmatic ad buying is more about online ads, but media companies and agencies are exploring new ways to sell traditional media in a similar way.
In-House Programmatic Advertising – Why Are Brands More Interested In It?
Over the last few years, programmatic advertising has evolved from being just the domain of agency specialists who work largely in isolation from the organizations they are supporting to an increasingly accessible set of technologies for brands to use themselves. Here is what’s attracting them:
- Higher Productivity
In-house programmatic functions provide direct access to key figures and fluctuations in real-time. Since the brand, have their own team of trained professionals, they can instill their company values and targets into them, develop their own real-time bidding strategies which at the end contribute to higher productivity.
- Control Of Data
Bringing programmatic in-house helps in protecting marketers’ data. Brands tend to limit access to data, even to their third-party service groups and the servers of SaaS companies.
- Financial Gains & Cost Savings
The online route from advertisers to publishers, and finally audience, is too complex. An advertiser’s digital dollar goes through multiple platforms and channels before the ad is delivered to the consumer. In-house programmatic advertising helps in cutting costs and increasing the value of bid directly to the publisher by eliminating the intermediaries.
- Accountability & Transparency
Bringing programmatic in-house gives the advertiser and marketers better control over the entire process. There is increased transparency on where the ad impressions show up and if they are viewable to real consumers, thus gaining full accountability for their ad spend.
- Long-Term Business Strategy
By taking programmatic in-house, brands are basically thinking ahead. They know that fostering in-house digital expertise which in the long run would bring several benefits, i.e. understanding of the brand/organization/vertical, proximity to the business and a deeper grip of the ins and outs of digital advertising.
Challenges Of Bringing Programmatic Advertising In-House
It is pretty much understandable why an increasing number of brands are desiring to take programmatic in-house. The level of control and transparency over the entire programmatic campaign achieved by this very move is unmatchable. But moving programmatic in-house is a very complex and challenging process. Below are some of the challenges brands cannot ignore when considering bringing programmatic Advertising in-house:
- Cost – There is a significant cost involved in acquiring complex technological infrastructure to keep up with the pace of such a rapidly growing medium.
- Finding the Right Skills – Getting the right talent in the areas where competition is fierce is another noteworthy challenge. In programmatic, there is a scarcity of top talent and at the same time, it is expensive.
- Logistics – Another demand of in-house programmatic is housing the technology and people somewhere.
- Fast-Changing Landscape – Programmatic ecosystem moves with implausible speed, and keeping up requires a lot of work.
The Rise Of The DMP In Programmatic
Marketers have been using Data management platforms (DMP) in display advertising for quite some time and now it is being applied in programmatic as well.
DMPs brings together data from varied sources, sorts it and provides enhanced insights into what it shows. For the marketers, they’re typically used to aid in segmenting audiences and show display relevant ads using cookie IDs. When it comes to programmatic, DMPs draw in data from DSPs, ad exchange and ad networks to boost the efficiency of advertising.
Publishers also use the DMPs to draw more information on their audiences to advance targeting and increase profitability in the long run. DMPs imparts a straightforward way to control the customer data, and gather valuable insights which are fuel to create more effective campaigns across all marketing channels. Here is how it supercharges Programmatic Advertising:
- Centralising Data – Collects and analyses all customer data from one single and easy-to-use platform. Data from all online and offline sources and third-party data can be easily centralized, which further helps in giving a clear view of the audiences.
- Understanding Audiences – DMPs helps in creating high-performing customer segments and detect the most valuable target audiences, from the data available (first and third-party data sources).
- Driving Marketing Success – DMPs generate deep insights which are immensely helpful in running programmatic advertising campaigns to make it more strategic and informed.
Reasons To Have Self-Hosted DMP
Taking programmatic buying and selling in-house requires answering one question – “Are you willing to forge the right partnership?” Yes, partnering with DMP is one of the most important parts of going in-house with programmatic. Here are few reasons to have a self-hosted DMP.
- Data Control – DMPs are just not about collecting silos of data, it’s about organizing it so that it can be put into effective use. DMPs also ensure data is accessible 24/7 in both segmented and raw format. Security is another important aspect, DMPs make sure the data is where it must be and not in danger zones.
- Customization – This is another huge point which favours having an in-house DMP. Outsourcing often frustrates the users to pay for features which are rarely used by them or aren’t beneficial. Having in-house DMP imparts ultimate flexibility when it comes to customization with its ability to extend or modify based on brands need.
- Speed –Few seconds wasted on data transfer can make a lot of difference when it comes to programmatic advertising. Dealing with massive audience segments and pushing campaigns across a wide range of publisher sites requires speedy actions. Self-hosted DMP makes it possible to quickly determine how resources are allotted and make sure that dormancy doesn’t lock things up.
- Data Compliance – In-house DMPs ensures that brands engage in safe data mining and usage that’s compliant legislation.
Now That You Know
In-house or outsourced – the debate on how brands would best manage their programmatic advertising remains as one of the hottest topics in the digital advertising industry. But one thing is sure Programmatic is surely gaining momentum, and now it is time for the marketers to explore the most effective way to use it for enhancing their overall marketing strategy.