Commentary

Programmatic Media-Buying Rising, Especially In-House

by Joe Mandese , October 15, 2018

Two big studies being released this week indicate programmatic is having a profound effect on media planning and buying, including one from the Association of National Advertisers and another from IPG Mediabrands’ Magna unit.

According to the just-published ANA report, a majority of the nation’s biggest advertisers say they now handle at least some of their media planning and buying in-house, and programmatic appears to be one of the big factors. According to Magna’s soon-to-be-released report, programmatic media-buying volume is slightly bigger than what was previously thought and now represents the majority of media-buying.

The ANA’s study, “The Continued Rise of the In-House Agency,” finds that 78% of the 412 ANA members responding to a survey conducted in August have brought at least some of their advertising services in-house. That’s up from just 58% when the ANA conducted a similar study in 2013.

Programmatic media buying, as well as search, appear to be big factors. While the ANA did not ask how many members were handling programmatic media buying in-house in 2013, the 24% of the 2018 respondents said they handle at least some of it in-house today.

Significantly, 17% said they have brought their programmatic media in-house from an external agency.

The study also found significant growth in the in-house handling of other media options that are managed heavily via programmatic interfaces, including social and search.

The share of ANA members claiming to handle at least some of their social media planning and buying in-house has grown to 40% in 2018 from 28% in 2013.

SEM (paid search engine marketing) has grown to 30% in 2018 from 28% in 2013.

SEO (search engine optimization) has grown to 28% from 22% in 2013.

9 comments about "Programmatic Media-Buying Rising, Especially In-House".

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Ed Papazian from Media Dynamics Inc, October 15, 2018 at 10:38 a.m.
Of course, Joe, but mainly for direct response and sales promotion functions---not very much for branding campaigns or national media planning and buying.
Reply

Alvin Silk from Harvard Business School, October 15, 2018 at 11:01 a.m.

Ed:
Do you have data trend over time inbudget allocation to brand-building?

Joe Mandese from MediaPost Inc., October 15, 2018 at 11:08 a.m.

@Alvin Silk: There is some detail about brands in the full report:

https://s3.amazonaws.com/media.mediapost.com/uploads/ANAinhousereport.pdf

Michael Hubbard from Media Two Interactive, October 15, 2018 at 11:39 a.m.

I'm not surprised at all by the perception that people are trying to move some services in-house... But what surprised me was actually the creative services being moved in house in the report itself. It said that only 4% did NOT do digital creative in house, yet (depending on the exact category), it was around 57% did digital creative for display/video ads. The advent of data at everyone's finger tips, I still think that's the greatest opportunity is to be able to move creative on the fly - so would have thought the other 43% would have been on board! Maybe some have dynamic creative in place, and therefore didn't think it fell into that category - but a little surprised, as agencies don't care for doing banner ad projects, and clients can see the importance of relative creative in a timely manner.

Ed Papazian from Media Dynamics Inc, October 15, 2018 at 12:41 p.m.

Alvin, because the standard sources lump all "ad spending" together without a way to determine what is pure branding, pure DR or sales promotion or a mixture of both, I have not seen any hard data on this, let alone trend info. It is my opinion based on what I see, however, that if you separate national ad campaigns from local and had branding-only ( or mainly ) dollar allocations for the types of ads you normally see on TV as well as magazines and radio, the bulk of these---the vast majority---are handled by traditional agencies, not in-house. Moreover, there is little effort ---or intention---by branding advertisers to attempt to duplicate the agency expertise---particularily in TV "creative" and time buying/media research, with in house counterparts. Nor are "consultants" really moving into this area.

Jack Wakshlag from Media Strategy, Research & Analytics replied, October 15, 2018 at 3:57 p.m.

Advertisers know the programmatic space is a cesspool of fraud and waste that agencies haven’t really addressed. Why should they? Agencies get paid the same for a fraudulent impression as for a real one. Only the advertiser suffers. Ed, wouldn’t you want to take this over yourself too? The advertiser is the only one who really cares.

Ed Papazian from Media Dynamics Inc, October 15, 2018 at 4:30 p.m.

Jack, too many advertisers refuse to involve themselves in the media function as they regard it as boring and numbers-driven. In my experience, brand managers and CMO's tend to dictate their key media plan elements---especially the media mix-----then set their media watchdogs on the agencies to ensure they are buying what was dictated well. As regards digital media, it's fairly obvious by now that this indifferfence has led to a lot of badly spent dollars and, I'm sorry to say, by many digital agencies cheating uncaring clients via bloated fees, kickbacks, etc. I have not seen this degree of agency carelessness or guile in traditional media dealings, however. Yes, it's the advertiser whose money fuels the system and one would think that the CMOs and other client bigwigs should care....but in my opinion the ones who really care are the sgency pros in media and other departments who try to caution their clients and educate them---to no avail. In short, the clients don't get a free pass---in my book.

Jack Wakshlag from Media Strategy, Research & Analytics replied, October 15, 2018 at 5:05 p.m.

We agree that the agencies haven’t don’t their job here. There is no incentive for them to do so apart from losing the business to an internal agency who should care more. Clients don’t need to do this for traditional media where “the air is clean.” I see this as advertisers getting fed up.

Ed Papazian from Media Dynamics Inc, October 15, 2018 at 5:22 p.m.

Jack, I think that we do agree about digital media agencies having, in many but not all cases---bilked unwitting advertisers---something that is not generally the case with traditional media, which, as you say, is basically "clean". However, I would note that advertisers who are now "fed up" about digital media and taking many of these activities in-house should have paid much more attention to what was really happening---fraud, ads not being viewable, ridiculous "tech tax" fees, etc. long ago. Sadly, they treated digital media just like traditional media---by staying aloof ---and they paid a huge price for their lack of involvement.