NEW YORK: Two-thirds of brand marketers purchasing digital ads programmatically have moved all or some of that function in-house, according to new research.
The Interactive Advertising Bureau (IAB) and its Data Center of Excellence surveyed 119 US-based brand executives representing media decision makers across all titles and 16 major ad categories.
They found that 18% of programmatic buyers had already moved all programmatic buying in-house, while 47% had begun the process and planned to continue further down this path.
Around one fifth (22%) had no plans to change their current arrangements which rely on agencies or DSPs, while the remaining 13% had trialled in-housing but reverted to outsourcing to partners.
The main reasons for bringing programmatic in-house were ROI attribution (cited by 47%), better audience targeting (44%) and campaign effectiveness (44%).
In addition to these observations, the paper, Programmatic In-Housing: Benefits, Challenges and Key Steps to Building Internal Capabilities explored the hurdles involved, noting that the programmatic in-housing transition typically requires at least a one-year commitment, complex coordination of partner contracts, staff training, and more.
“If brands are going to bring programmatic in-house, they need to understand both the benefits and pitfalls,” said Orchid Richardson, Vice President and Managing Director, IAB Data Center of Excellence.
“This research makes it clear that a significant percentage of brands have already moved in this direction – and we can expect that more will follow suit.”
The study further noted that programmatic in-housing can be defined in degrees of programmatic capability immersion rather than absolutes.
“Most marketers prefer to be selective about which in-house capabilities they stand up versus going the full-service route, which would require extensive resources and may disrupt focus on current business operations,” it said.
WARC's monthly Global Ad Trends report recently estimated the cost of the 'tech tax', money paid to middlemen in the programmatic chain, at $30bn worldwide last year.
Sourced from IAB; additional content by WARC staff