Commentary

The Catch-22 Of Programmatic In-Housing

Brand marketers are putting programmatic to good use, but they may not be putting it to use well.

Just under half (40%) of programmatic spending goes toward branding campaigns, per a new Econsultancy report produced in partnership with Quantcast, but there are some barriers preventing even more investment. The finer details of the “barriers” are below, but here’s the connective tissue: Marketers are still unsure how they should carry out programmatic campaigns.

This creates a problem, because it’s one thing to use the technology, but it’s another thing entirely to use it the right way.

Econsultancy and Quantcast interviewed client-side digital professionals, agencies and vendors, and surveyed over 100 senior-level marketers in the UK and U.S., for the report. MediaPost’s Research Brief already covered the key findings of the report in great detail.

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Nearly two-thirds of survey respondents (64%) cited increased efficiency as a main reason why they are turning to programmatic for branding efforts. Reduced overall cost (58%), real-time optimization (56%) and the ability to use first-party data (52%) were also highlighted as the leading draws of programmatic.

“However, it is clear that there are still some barriers that must be overcome to enable further investment,” Econsultancy warns.

Over half (57%) of those surveyed said there is a “skills gap” with programmatic -- i.e. more training is necessary -- but despite this admission, nearly half (41%) say they are doing programmatic advertising exclusively in-house.

Perhaps this is because marketers hold “reservations over the control they cede in using programmatic,” to quote Econsultancy. About one-quarter (23%) said “data privacy” is holding them back from spending more via programmatic, while 16% cited a lack of transparency and 13% take issue with brand safety concerns.

It has become quite the catch-22 for many marketers: They want to keep as much control as possible, and the best way to maintain control is via in-housing. However, they may not have the required skills to in-house effectively.

As with any such dilemma, the chips fall somewhere in the middle. Why else would 57% of marketers think there’s a significant “skills gap” when it comes to using programmatic technology, while 41% do programmatic in-house?

Sure, it's technically possible that the 41% of respondents saying they do programmatic in-house were the exact group of people that didn’t cite “skill gaps” as a problem, but it would be a little green to assume that.

At last week’s OMMA Programmatic Display conference in New York, Netflix’s Kathy O’Dowd, global director of programmatic marketplace and channel development, said Netflix does its programmatic buying in-house for many of the reasons cited above: transparency, control, etc. But she also acknowledged that “it takes a lot of work to do [in-house programmatic] well.”

At the bottom of that article, Seth Ulinski, senior analyst at Technology Business Research (TBR), commented: "It is a big commitment to insource, but [there are] plenty of benefits for those with the grit, time, and resources.”

According to Econsultancy’s survey, marketers seem to have the grit and time, but they readily acknowledge that resources are an issue. Unfortunately for them, “resources” might be the most important component.

The Econsultancy and Quantcast report can be found here.

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