Programmatic In-Housing: The Dynamics of Ownership & Control Programmatic In-Housing: A question of cost or investment?

Yesterday, in the 1st part of this blog series we explored the trend of Advertisers and Agencies ‘in-housing’ their programmatic media buying. We found that the factors involved in this concept are structured around 2 areas of ownership and 6 areas of control. If you missed the first part, please catch up here to give context to the below.

The 2 scenarios we were about to discuss were where the Advertiser has outsourced the Media buying to either an Independent Digital Trader or their Agency of record.

The direct implications for the Advertiser are the same regardless of whether they use an Independent Digital Trader to execute media buying or use their Agency. Either way, they gain control of Transparency, Data and Tech, but cede that of Media, Talent and Operations.

An Agency has no involvement if the Advertiser outsources media buying execution to an Independent Digital Trader. However, if it is the Agency that executes the media buying, this presents a unique sharing of control. Media, Talent and Operational control is with the Agency. Data and Tech control is with the Advertiser. Yet, Transparency is shared. Admittedly, the same would be true for an Independent Trader if their role was supplanted in place of the agency in this arrangement. However, an Independent Trader is likely to have no application for the benefits that such transparency affords, beyond programmatic activity itself. Whereas, the Agency is likely to have involvement with other channels of the Advertiser where there may be such opportunities for application.

In short, complete ownership of both contract and execution is the most beneficial arrangement for the owner, whether it be the Advertiser or the Agency. It is also, the least beneficial for the other party in any 2-way relationship. So whilst a split in control is not the theoretical ideal scenario for any party, the sharing of Transparency offers a unique case of the benefit that collaboration affords when the theoretical ideal is not attainable.

All else being equal, Agencies can point their Advertiser clients towards the higher return of collaborative transparency that their wider ranges of services afford relative to Independent Traders. However, they first need to convince their Advertiser client that all else is indeed at least equal. Particularly in terms of their competence and innovation in the field that the Independent Traders claim specialisation in.

The elephant in the blog post is: “Why wouldn’t each of the parties enforce their, presumably, ideal scenario of complete control?” We will explore this topic in the 3rd Part of this blog series tomorrow.

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