Commentary

ANA: In-House Programmatic Buying More Than Doubles, Agencies Becoming Marginalized

by Joe Mandese , December 18, 2017

A year after the Association of National Advertisers benchmarked programmatic media-buying among the nation’s largest advertisers, the percentage who say they have brought it in-house and are reducing the role of their agencies has more than doubled. That’s the top line finding of the 2017 edition of “The State of Programmatic Media Buying,” released this morning by the ANA.

The report, which is based on an extensive survey conducted by the ANA in June and July, found that 35% of marketing executives have brought programmatic media-buying in-house and have reduced their agencies’ role -- a number that's increased significantly from only 14% a year ago.

“Most respondents have one full-time staff member who devotes 100% of his/her time to programmatic initiatives, with a range of zero to 15 full-time employees,” the ANA report found, noting that the median response averaged one full-time employee.

“There are a larger number of internal staff who have at least some dealings with their company’s programmatic initiatives, however,” the report continues, noting, “A median of three employees devote part of their time to programmatic advertising as part of their regular job duties. There is a wide range within this demographic — some companies manage with none, and others have a staff of 100 who deal with some aspect of programmatic advertising.”

Based on the respondents' perceptions of its performance, the in-house trend could well continue.

Half the respondents (50%) said they were either satisfied or very satisfied with their programmatic media-buying performance, while more than a third (36%) were “neutral.”

Only 3% said they were not satisfied, while 10% said they weren’t sure.

To put that in a broader perspective, 85% of marketers say they now buy media programmatically, with only 3% saying they do not. (Ten percent were unsure.)

The top reason marketers say they are shifting to programmatic media-buying is “better audience targeting” (cited by 74%), followed by “real-time optimization” (52%) and extending their “audience reach” (48%).

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3 comments about "ANA: In-House Programmatic Buying More Than Doubles, Agencies Becoming Marginalized".

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Ed Papazian from Media Dynamics Inc, December 18, 2017 at 3:58 p.m.
Joe, I realize that you don't have the required info, but just because a third of the advertisers who cooperated in the study "have used" programmatic---even if true---tells you very little about the extent of such usage. Like is it 10% of their digital spending---or 25% ----or 50%. OK, there's a "trend" in the surveys, but that, too, does not translate into volumetrics, which are the key factor if digital agency specialists are really in trouble in this regard.
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Joe Mandese from MediaPost Inc., December 18, 2017 at 6:36 p.m.

Ed, never implied it was reprsentative of all advertisers or of total digital spending or of total media spending. The methodology and bases were disclosed in the column. I'm pasting more explicit methodology below.

We plan on covering more data from the report tomorrow or later this week, but the respondents reported that they are buying all forms of media programmatically, including non-"digital" ones like TV, radio, print, outdoor, etc., though lower percentages of analogue.

In terms of percentage of total digital budgets, respondents did report that and, as you might expect, it ranges from a few percentage points to as much as 80%.

The sweet spot seems to be in the 6% to 60% range. I will publish another charge delineating that in our next post.

METHODOLOGY

The survey was conducted in June and July of 2017, and 149 client-side marketers participated. Respondents had a median of 21 years of experience in marketing, and more than two-thirds (67 percent) reported their job level as director or above. Approximately 66 percent of respondents focus their marketing on B-to-C efforts, 13 percent on B-to-B, and 21 percent on both B-to-B and B-to-C. A total of 48 percent of respondents work at companies with annual U.S. media budgets under $100 million, and 52 percent work at companies with media budgets of $100 million and more.

Ed Papazian from Media Dynamics Inc, December 18, 2017 at 7:36 p.m.

Thanks, Joe. Any clarification will be helpful.