Unbundling ProgrammaticHow brands can control their own destiny

Disruptive changes have been happening across many sectors, no more so than the digital transformation of marketing through programmatic advertising and its focus around data, analytics and reporting. And transformations haven’t stopped, especially in such a technologically driven sector!

As marketers have become increasingly comfortable with programmatic, the model is being questioned and the main reason for this is, again, data – especially ‘biddable’ media traded through automated means, with constant optimisation and efficiency.1

Media agencies have in the past taken care of all larger advertiser’s media, as it was progressively bundled over the years. But now some advertisers are starting to selectively unbundle.1

The changing landscape of NZ media

Total digital advertising in NZ now represents 40% of all media in 2019.* It’s dominance and growth are set to continue.

Programmatic represents 46%^ of display, social, video and native, with new media emerging – Audio, connected TV - and digital billboards not far away!

*Source: Nielsen Media Spend NZ 2019 – The changing landscape of NZ media^Source: IABNZ 2018 Q4 Revenue Report

Total Digital

40.3%

NEW ZEALAND ADVERTISING INDUSTRY REVENUE REPORT 2018

Savvy marketers now realise automation, analytics and insights are the key to understanding the customer journey. And successful companies are now using data to craft world-beating customer experiences.2

No longer satisfied with being a passenger they are demanding improved control and transparency of their online advertising. Social marketing, content marketing and search were the first to be taken in-house. Now it’s Programmatic’s turn!

Moving from the cabin into the cockpit

Drivers of Programmatic In-housing3

While some brands may succeed in bringing 100% of their programmatic in-house, others may fair better with a hybrid solution by defining the media spend and objectives in-house but outsourcing day-to-day execution and specialised expertise to a digital partner.

The benefits of unbundling programmatic and going in-house:

• Data ownership/control and understanding the customer journey

• Cost efficiencies and transparency

• Improved performance and ROI

• Better control of targeting, audiences and inventory

• Greater control of brand safety, fraud and viewability

• More agile and responsive

• Full accountability and focus on brand goals

There are 3 options/models for brands to consider for unbundling and for greater control over their destiny:

1. 100% Collaboration – Brand, Programmatic Specialist and Adtech partners work together on all aspects of media planning, buying and analysis. Typically, only a fixed margin model will deliver the transparency and costs efficiencies required.

2. Shared Success –some things are taken in-house (client owns the platform accounts, media budgets, strategy and identifying success metrics) but others are outsourced like programmatic planning, buying, optimisation, analysis and reporting.

3. 100% In-house – All programmatic tech, planning, buying and analysis is done by in-house teams.

Questions to Consider3

Marketers may want to take all or some services in-house for many reasons. Before deciding if bringing programmatic in-house is the right solution for your organisation, answer these important questions to gain some perspective.

1. What marketing services are you looking to bring in-house?

2. What’s your plan to source and retain programmatic talent?

3. What have you done to level up your team’s skills?

4. How will you keep up with industry trends, new tech and tactics?

5. Programmatic requires advanced data science and tech, so how will you integrate those?

6. Do you have the support of senior management with an appetite to invest?

7. Do you have a feasible media budget to justify the returns?

Setting the Trends: Spotlight on the US Market4

70% of brands have moved to establish in-house marketing services – from social, influencer, content marketing, creative and programmatic

79% of in-house agencies have in-house video production

90% still use external specialists

58% of all the work is done in-house

30% have in-house programmatic capabilities

49% established in-house capabilities in the last 5 years

To bring programmatic in-house, online advertising spend (excluding search) will need to be in excess of NZ$2m a year to cover the additional resource requirements. Considerable buying power is required to compete in the programmatic market place. Plus the significant cost of technology, data and talent.

The challenge that in-housing poses requires a transition of at least one year and a commitment to talent recruitment, organisational buy-in, complex coordination of partner contracts and staff training.

In addition, brands also have to think about sustaining this valuable resource in a market that is constantly evolving, with new tech, tools and techniques introduced all the time.

Recruiting and retaining talent is a serious challenge, especially in the NZ market. There is a very real shortage of skilled

programmatic specialists and those that are on the market are usually lured to big agencies with big money, varied responsibility, multi brand campaigns and new toys. These are important dimensions to a programmatic buyers role. They don’t like to be stuck with one brand - restrained from experimentation, innovation and limited number of verticals.

If you manage to get this far in setting up your programmatic capability, the next challenge is managing growth. Specially managing workflow (increased projects) and scaling efficiently/managing the resources.4

In the US and UK, in-housing is taking the form of a hybrid structure or shared success model. It’s usually a tailored arrangement with an appropriate partner, selecting the individually services needed, which can be effectively integrated with your own internal capabilities whilst retaining control of the platform accounts, data and transparency.

Determining factors

It’s a fact of life that one cannot always do everything oneself. If a hot water cylinder breaks down, you call a plumber, but you don’t employ a landscape

gardener every time the lawn needs mowing.

The point is that it is important to know your internal capabilities and what you realistically can handle in-house and which tasks you need to out-

source to specialists.

Be Extraordinary

We offer 2 models for those brands who wish to unbundle their digital advertising:

1. 100% Collaboration – Brand, Programmatic Specialist with Adtech partners in place, working together on all aspects of media planning, buying and analysis. A fixed margin model that delivers transparency and costs efficiencies.

2. Shared Success – the client owns the platform accounts, media budgets, strategy and identifying success metrics. We provide the programmatic planning, buying, optimisation, analysis and reporting. With this hybrid model, our staff are typically imbedded into the client’s business.

Acquire has helped some of NZ’s leading companies assess the options, conduct a cost-benefit analysis, create a ramp up plan, establish a tech stack, integrate data sources and provide the right talent to successfully create a customised, hybrid in-house programmatic solution.

For more information, or to discuss your options, please contact:

Anthony Ord STRATEGIC DIRECTOR

Mob: +64 27 649 9198

Email: ant@acquirenz.com

Zane Furtado PROGRAMMATIC DIRECTOR

Mob: +64 27 2 834 443

Email: zane@acquirenz.com

Acquire is NZ’s extraordinary programmatic trading desk. We specialise in providing clients with programmatic solutions that best fit their goals, capabilities and desire to control their online destiny.

References:1. Nick Manning, MediaLink. The ‘how, what and why’ of in-house agencies. WARC January 20192. Qrious. Mood of Marketing 2019. In association with the Marketing Association.3. Lindsay Downing. Why Bringing Programmatic In-house isn’t an all or nothing choice. Goodway Group 2019 4. ANA. The continued rise of the in-house agency. October 2018