Programmatic In-House (Brands) Vs. Out-Of-House (Agencies)? Actually, Both Are Needed

Programmatic brand advertising is already producing amazing business results. Billion-dollar brands like American Express are revealing they want to go 100% programmatic, and P&G has announced 75% of its digital ads will be programmatic this year. These top global brands are investing internally (in-house) as well as externally (outhouse, from agencies) with their ad spend. These investments make sense when we think strategically of programmatic as automation, not just a method of media buying.

Agencies have announced big programmatic technology deals and have increased their investing to match their customers’ automation and programmatic media expectations.

Experts in programmatic believe in-house buying by brands plus value-added services from agencies are both needed to realize the huge potential of programmatic.



There are five reasons why it’s a good idea for brands to handle their programmatic efforts both in-house and with agencies. Let’s start from the top.

Costs (Opportunity & Savings)

Cost savings are pretty straightforward. Programmatic reduces double fees from the agency and the usual technology partner costs.  Building programmatic teams for brands’ in-house trading desks is costly in the short term. However, it pays for itself over the long run.  

Agencies have become more transparent with their costs. They have more experience with technology partners and can make more fluid commitments on behalf of their brands – which translates to more savings for the brands. Brands can then spend more time optimizing, measuring, and driving outcomes in this very fragmented digital ecosystem.

Big Data (Divide and Conquer)

The biggest opportunity and challenge will be using big data to power programmatic exchanges.  The key is for brands to bring their best first-party data into the exchange, and for agencies to secure publisher first-party data. Dividing and conquering can solve the data ownership issues (in-house) and media quality measures (agency) to build on the combined force’s historical performance. Together the brand and agency can tame the technology, bring third-party data providers, and provide strategy, advice and context that algorithms and machines cannot fulfill.

Better Outcomes (KPIs)

Programmatic is thought of as the intersection of the three Ts: technology, targeting and teamwork.  The brand and agency can help ad technology partners think not just about efficiency, but outcomes and KPIs as well. More cooks in the programmatic kitchen are needed to ensure that KPIs and results are achieved.

Technology Development (Buy & Sell Side)

More technology talent is required as Madison Avenue exchanges adapt to look more like Wall Street trading.  Agencies have tremendous experience working with publishers directly and the sell-side of ad exchanges, which is priceless for programmatic. The brands have invested a lot of time and resources working with agencies and media-buying systems to bring strategy, goals, and creatives into the ecosystem.  Together, brands and agencies working on both sides of media trading are optimal to keep up with the technology.

Competition (Change is Good)

The advertising industry is getting stronger as many of the top brands build in-house programmatic, data, social, mobile, and video media teams.  Agency trading desks, new data organizations, new media teams, and big partnerships within the technology industry have made agencies even better.  Transparency, trust, and communication issues can be overcome with new business models, better service, and help to secure a sustainable programmatic marketplace.   

5 comments about "Programmatic In-House (Brands) Vs. Out-Of-House (Agencies)? Actually, Both Are Needed".
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  1. Ken Nicholas from VideoAmp, October 14, 2014 at 5:30 p.m.

    Lots of generalities here with no specifics that I see, respectfully saying, including on why "both are needed." Also, for those that sell into Ad agencies around the world...I'm thinking the term 'Out-of-House' might have read better than the word actually used in the title?

  2. Chaya Hendrick from SmartMetric, Inc., October 14, 2014 at 9 p.m.

    With automated advertising buying becoming smarter and with large corporations looking at deploying in-house programmatic is not this a huge threat to the revenue model of most large agencies?

  3. Skip Brand from bbd (branding big data), October 15, 2014 at 12:35 a.m.

    My central tenant on why brands and agencies should work together on programmatic brand advertising is: (1) sharing costs, (2) working together on big data (3) combining efforts provides better outcomes, (4) technology development is needed on both the buy (brand) and sell (agency) side, and lastly (5) dividing duties in the short term. I can provide more specifics in future articles since brevity always has me edit many of them out. I agree with your comment about the title and will change it back to the original: "Programmatic In-House (Brands) versus Out-House (Agencies: No! Both Are Needed." Thank you for your thoughts, comments and challenges.

  4. Skip Brand from bbd (branding big data), October 15, 2014 at 12:39 a.m.

    I agree with you. I believe large and small agencies that assist and work with the global brands, and have in-house programmatic buying will fair well if they: (1) assist with dynamic creative, (2) optimize content in the ad units, (3) work with earned and owned media programmatically, and (4) provide strategic guidance. I believe the agencies that are embracing programmatic offer even more value as partners not vendors.

  5. Ken Nicholas from VideoAmp, October 15, 2014 at 12:27 p.m.

    We will look forward to those articles/post's as they arrive!

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