Online advertising is an important component of many brands’ marketing plans, and advertisers will spend more on interactive media than on broadcast TV this year, according to the IAB. But brands can no longer enter into digital agreements that lack visibility into how much of their money goes toward working media that accomplishes their goals.
I have written before that advertisers need to be proactive in pushing for transparency in programmatic buying. When advertisers start digging into transparency with their digital teams, they may not like the answers they get. Fortunately, those unsatisfied with the status quo and looking to take matters into their own hands have options.
Option #1: Manage through contractual terms. Introducing transparency via contractual terms with the agency of record to cover trading desk arbitrage and data rights is a straightforward way to handle things. The benefits are fairly obvious: This maintains the current workflow structure and provides easy access to programmatic technology. Contractual management also allows advertisers to own their data. Many systems that manage data for marketers pool the information with other marketers -- in other words, the competition.
But even by doing this, marketers are limited in their visibility into all arbitrage opportunities. Trading desks may be connected to an agency, but they operate
separately, with limited insight. Supply chain complexity also plays a factor -- by introducing language at the agency level, you have the agency’s word, but not everyone else’s
Option #2: Build an in-house technology solution. Marketers could always go the independent route by refusing trading desk services and building an in-house technology stack. In doing so, they simplify the supply chain, take control of their data and remove trading desk fees and arbitrage. Even the agency benefits by sitting closer to the entire media plan.
The main drawback here is cost. Building and implementing this technology takes a great deal of time, and it also requires expertise in the ever-evolving field of advertising technology. Once the stack is developed and operation, the brand needs an in-house team to manage the system and make decisions. The development, rollout, and additional head count require a major investment.
Option #3: License programmatic technology directly. The final route is for the advertiser to contract directly with a DSP and DMP. This is more appropriate for advertiser who lack the budget to build in-house, or whose agencies aren’t fluent enough in programmatic to make contractual guarantees.
This route allows advertiser to choose their vendor and maintain rights to their data, just as if they had built their own stack.
The downside here is that the agency of record may resist working with the technology of the advertiser's choice. It also requires strategic leadership from the advertiser.
Amid all of the controversy surrounding online advertising, it only makes sense for brands to take back some of the control to maintain transparency. Every scenario has its pros and cons, and many decisions may come down to the size of the brand and its interactive marketing goals. Advertisers should weigh their options, and decide which is the best fit for them.