By Michael Kalman, CEO of MediaCrossing
Programmatic advertising is a lot like Formula 1 auto racing: The technology is powerful, but in order to actually win races, it needs to be driven by seasoned experts. Just as a weekend racetrack enthusiast couldn’t ever hope to beat one of Lewis Hamilton’s lap times even in the fastest car, so too can unprepared brands get the execution wrong when they try to get behind the wheel themselves.
The topic of in-housing has been front-of-mind for the programmatic advertising industry for some time now. According to a recent report from the IAB, Sixty-nine percent of brands have either partially or completely moved programmatic buying of the display, video and/or CTV in-house.
As programmatic technology has become cheaper and more effective, there is a temptation to bring this practice in-house as a cost-cutting strategy and sever agency relationships. Is this approach leading to a short-term financial win, but a long-term financial burden?
In order to make in-house programmatic work, most brands will need to not only get buy-in from existing stakeholders like media, IT and finance but also hire or train expert practitioners of this extremely technical skillset. Programmatic is not a learn-on-the-job practice. Agencies have tried-and-true processes and experts at a fraction of the cost-benefit of training new employees.
The Pandemic Shake-up on Resources
During the pandemic of 2020, numerous mid-market consumer brands have limped along, switching their media and sales channels to digital and ecommerce ad hoc in an effort to stay afloat. Many companies that cut back on their advertising and operations in 2020 are likely to see an uptick in 2021 as Covid vaccination continues, and they’ll be moved to resume advertising in a changing landscape.
If the pandemic has taught us anything, it’s that agile companies are the ones best suited to adapt to rapid change. We’ve been experiencing a K-shaped recovery and if you look at the top of the K – the companies who are surviving – you will see that they were all very agile in how they approached their survival strategies. Having an outsourced programmatic agency can help companies course-correct fast since they can alleviate additional internal pressure to perform and they tend to have more experience managing crisis scenarios.
The Case for Outsourcing Experts
Think of health clubs, spas, cosmetic surgeons, optometrists and the countless other businesses that will need to re-engage with their customers as life returns to normal in 2021. Add these businesses to those that have felt the pressure of consistent demands of goods and services, providing customer support and meeting needs during a global crisis. If a company doesn’t have an existing dedicated digital marketing strategy, they’re far better off relying on the subject-matter-experts who can continue to drive strategy and provide the backbone to support innovation for brand goals. If the company has ventured to manage programmatic and performance marketing in-house, they’re inundated with putting out fires as the pandemic squeezes teams to operate with reduced resources, often with the pressure of increased output on increasing tangible direct revenue figures. This leads to high employee burnout, turnover, and ultimately reduced efficacy of campaigns.
If companies try to bring programmatic in-house without the requisite expertise, not only are they likely to waste substantial money and time with poor targeting and execution, they’re also likely to lose market share to the competitors who enlisted top-level expertise to get in front of customers and leverage a year’s worth of pent-up demand for their services.
Moving Forward with Lean, Data-Driven Actions
An unfortunate mistake we are seeing as teams adjust to the aftermath of 2020 and venturing into the unknowns of 2021 has been a stop and pause approach to advertising. The stop-and-start approach, while attractive due to perceived limited risk, sets brands up poorly in the long-run. The stop-start-relaunch process eats up time, resources, and generates messy data for executives to understand the market and brand’s performance during a time where data can be the difference between turning a profit or folding completely during this time.
As we enter 2021 the technical landscape and speed of the news cycle, it’s become incredibly difficult for brands to manage platforms/advertising effectively in-house. Increased pressure on budgets and restricted resources lead to the necessity that marketers trust established professionals. The digital advertising agency is not dead, it is an essential extension of marketing teams as part of an ecosystem that needs to remain adaptable to survive.