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Moving programmatic in-house

18/11/2014

Companies are increasingly considering whether there are better options for programmatic marketing than outsourcing it.

As the use of digital technology in marketing has grown, so too, inevitably, has the outlay of cost and labour. This being the case, it is a wise company that asks whether or not it is managing this part of its marketing in the most cost-effective and beneficial way.

For many enterprises, the obvious route to go down has for some time seemed to be outsourcing. That way, it has been able to make the most of specialist skills among people who know their algorithms and their software inside out, while having the nous to put them to best use when triggering them according to the events such marketing campaigns focus on.

However, this programmatic landscape does not have to be done by using managed and outsourced services - and some have begun to ask if there are not better alternatives, including bringing such operations in-house.

Indeed, last month, the World Federation of Advertisers (WFA) published its own guidance on how each brand can make the most of programmatic marketing techniques.

Managing director of the body Stephan Loerke remarked: "This guidance is designed to continue that process and ensure that WFA members learn from best practice and are able to develop the transparent solutions that digital media buying requires."

The WFA report said this understanding was of great importance as companies can gain many extra benefits by asking the right questions, "through to the more complex process of negotiating individual contract terms right through the technology stack they chose to use". According to the WFA, even a small tweak to the system in place can "deliver significant improvements in terms of data ownership and marketing performance".

That may come as a significant eye-opener to companies that use programmatic marketing, which now accounts for ten per cent of global digital media investment, at least according to the 43 biggest-spending marketers from around the world surveyed by the WFA. The outlay of these marketing departments totals $35 billion (£21.7 billion), with 44 per cent aimed at digital display. This figure is twice the 2013 spending level and is expected to increase further, with 83 per cent anticipating more investment in video and 77 per cent predicting more spend on mobile.

It is precisely because such large sums are being spent that it is increasingly important for companies to ask if they are getting enough bang for their buck. If the answer is no, there is a clear case for bringing matters in-house. And for many companies, the answer is emphatically negative; with many outside providers enjoying large profit margins without creating the efficiencies their clients are seeking.

The theory behind that is simple enough: a marketing department should have the best understanding of the company's own brand, its products and its customer base. If the digital skills to implement a programmatic system are in place, that can be calibrated according to the precise needs of the enterprise at any given time.

In practice, the judgement on whether or not to bring programmatic in-house depends on a number of issues. Not every firm will have sufficient resources and headcount to do this. Moreover, finding the staff with these skills can be difficult as they are relatively scarce.

Ultimately, the judgement depends on having a strong relationship with an agency, so that it works hard for the client to get the best outcomes.

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