In late January, P&G announced it is moving more of its media planning and buying capabilities in-house, cutting their agency costs and taking more ownership and control of their spend. And it appears P&G is not the only advertiser considering this approach.
A recent survey by the ANA found 35% of brands have expanded their in-house programmatic media-buying capabilities and limited the role of outside agencies, up from 14% in 2016.
In addition, our in-house research found that 84% of advertisers want more control over their programmatic advertising, while 73% don't believe that agencies accurately measure campaigns bought programmatically.
The number of brands that will bring programmatic fully in-house is limited. The majority of advertisers will find they still need the expertise of an agency or partner. In fact, 96% of the advertisers we surveyed see the need for agency help with programmatic. But current events and changes in the industry should influence the way that brands work with their agencies going forward and should have both parties rethinking the model.
It's no surprise that brands are keen to bring buying in-house. Worries over brand safety and ad fraud dominated the headlines last year, and this can be seen as the natural response of brand owners.
Big companies are frustrated they can't find agency partners that can leverage their data adequately.
In the past, being a large brand owner meant that you could work with a major agency network and be confident you were receiving the best volume rates. Programmatic buying has leveled the playing field so that the market leaders must look to the quality of their data to give them an advantage. Buying power is only meaningful if you know how to execute on your data assets.
If brands can’t find an agency to deliver this kind of service, why wouldn’t they hire the expertise and create their own programmatic directive?
But is this all-or-nothing approach doing more harm that good? Every brand team has different strengths and weaknesses across programmatic tools. For example, one brand may have a strong analytical data team, yet doesn’t have the talent or knowledge for programmatic optimization. Or a brand that has built an optimization team internally doesn’t have the strategic resource or supply trading team to support them.
These are key skills that are worth buying in from a specialist agency, which lends itself to a hybrid model.
Brands should demand a tailored arrangement with an appropriate agency — selecting only the individual services that they need, which can be effectively integrated with their own capabilities. This hybrid approach also applies where brand owners are trying to alter current agency arrangements.
Brands should request a better deal from agency partners, revisiting contracts and inserting audit clauses, or switching to partners that grant full data access. For agencies, its important to proactively address advertisers’ concerns by offering full transparency and working with partners that can effectively prove the value of programmatic.
The future of brand/agency relationships should be a hybrid one that blends the best capabilities of advertisers and brands. The agencies that can adapt to this flexible, hybrid approach, which caters to advertisers’ specific requirements, will be build a more effective and sustainable working relationship with brands for the long term.
Blending the strengths from both brands and agencies will result in success for all.