Commentary

What Kinds of Marketers Need Self-Service Programmatic?

Programmatic ad buying is now an integral part of every digital advertising operation, to the point where we’re seeing many brands making internal investments, bringing in resources to help them understand the ecosystem. As a result, they are beginning to take control of their operations with a self-service model. Just this summer, we’ve seen Zipcar criticize the way agencies buy media while embracing the levels of transparency they get from managing their own programmatic.

This is a great advancement and evolutionary step for programmatic, and it's the right decision for certain advertisers.

But no matter how popular the in-house, self-serve trend gets, it isn’t necessarily the right choice for every marketer. In fact, what marketers may actually be looking for are just higher levels of transparency.

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Many dipping their toes in self-service are better suited sticking with a managed service offering, or at least a hybrid model. To decide what’s right for them, marketers need to look at their campaign goals, their teams, and what they’re actually trying to get from a self-service model.

Let’s start with one of the most common benefits of self-service: transparency.

A growing number of brands use self-service models because they feel they’re being taken advantage of when it comes to margins. But while transparency is a very clear benefit for the entire market, it’s not exclusive to self-service. That’s right – transparency is available, if marketers want it.

Transparency on margins is a good thing. It helps marketers hold their partners accountable, and it helps them understand how they arrived at their campaign results. The market is headed toward dynamic pricing, with great degrees of variation in programmatic margins, which fluctuate to meet specific campaign KPIs.

Often campaigns can operate in negative territories in order to get the overall campaign to its goal. This works both ways for marketers, and without flexibly the locked rates could end up having a negative result. Sharing this kind of pricing information simply shows the marketer what kinds of results were achieved and how the programmatic partner stayed within budget to achieve those results.

Results are what marketers really want – real insights they can take from their programmatic campaigns and leverage on other platforms. They likely don’t want lists of thousands of URLs that carried impressions during a campaign delivered to them. Instead, they want to know how much they’re paying margins, and they want some sense of performance in correlation to data sets.

With that in mind, it’s safe to say that the majority of advertisers would benefit from a managed services offering, or at least a hybrid model. A team of experts pulling the right levers can make all the difference, and that gets lost when a brand moves to self-service too quickly.

There are a few advertisers that truly need the smallest margin possible on media – those are the only operators who should explore a pure self-serve model. Simultaneously, huge ecommerce operations like Amazon have the capital to build their own systems and reduce margins. But very few digital advertisers are as big as Amazon.

To benefit from self-serve, the direct client needs a team that understands that space in its entirety and knows which levers need to be pulled and the data sets that need to be leveraged. It’s similar to NASCAR, where every car is theoretically a stock model, but the driver makes all the difference.

And while nearly everyone thinks they’re a good driver, there’s a monumental gap between a pro and an amateur. In programmatic, the pros know how to drive their own cars and they understand the nuances required to get the best result.

With that said, the market won’t remain this way forever. Direct marketers are already building in-house programmatic teams. In the next five years, we’ll see enough top talent migrate from the technology side to the brand side, giving marketers the knowledge and experience they need for in-house teams.

Marketers will undoubtedly get smarter about the programmatic space, and they’ll evolve as their needs change over time. But right now, rather than try to bring the operation in house and pull all the levers themselves, a majority of advertisers could benefit from a hybrid model focused on dynamic CPM pricing and transparency.

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