The Hot Seat: Bringing Programmatic Inhouse
This post is the first in a series of interviews with Ad-Tech professionals and mobile enthusiasts.
In just about every adtech trend report published in the last two years, advertisers and agencies bringing their programmatic efforts in-house has been listed as the most disruptive trend for the industry today. Driven by concerns over brand safety, transparency and ad fraud, advertising giants like L’Oreal, Unilever and Netflix have all opted to ditch their vendors in favour of building out their internal capabilities. But even the biggest advertisers and agencies are learning that the process of bringing their programmatic stack inhouse can be fraught with challenges, from finances and logistics to finding the right talent to manage the new technologies. Can brands and agencies really bring the same or more value than their vendors? To learn more about the trend, we caught up with Robert Weatherhead, a digital advertising consultant at Agent Wolf and Mufadal Jiwaji, Head of Programmatic at foodora.
- First things first, could you tell us a bit more about yourselves and the work you do?
Robert: In my last full time role I was responsible for all of the programmatic trading for Amnet, the Dentsu Aegis trade desk solution, in the North of England. I saw first-hand the challenges advertisers were facing with programmatic and also how these weren’t always being serviced by agencies and programmatic suppliers. Couple this with the moves in the market towards transparency and stricter measurement criteria and I believed this represented an opportunity for an independent consultancy. One who could advise advertisers and agencies on how best to approach programmatic technology and introduce it to their businesses. The role I play varies greatly depending on the stage the business has reached with programmatic. Some advertisers have tried running programmatic display and haven’t been able to make it work. So my role is to audit what they did and advise on how they can improve. Others are looking to launch some activity and want guidance on how to start out. On the agency front, it is generally small to medium sized agencies who want to introduce a programmatic offering and so here it would be conversations around product, staffing, commercial models and supplier selection.
Mufadal: I’m Mufadal and I’m responsible for programmatic display at foodora: all of the internal and external media buying that we do that’s not Paid Social. I’ve been here for a just over a year and my role has been to consolidate our marketing spend. When I joined the company, foodora was working with about 22 external networks so my ultimate goal is to bring as much of that inhouse as possible: build the team, select the right tools and put processes in place so that we can consolidate our spend in-house.
- Why do you think more brands and agencies are bringing their programmatic efforts in-house in 2018?
Robert: Control and transparency. We have seen it happen before with paid search. Once the channel reaches critical mass in terms of spend and becomes less mystical in terms of how it works, the larger advertisers will look to gain control by bringing it inhouse. When you couple this with negative news stories around transparency and potential fraud and there is a level of mistrust from advertisers towards suppliers and agencies. This further increases their desire to have control over their programmatic activity and to bring it inhouse.
- Have you dealt with many issues since you started building out your internal capabilities?
Mufadal: I think one of the biggest issues which we faced when I first joined was picking the right partners to work with. When you’re a brand, there’s a lot of unknown unknowns, so of course all the DSPs will sell themselves to you and say “we’re the best, here’s our list of features.” The same with ad servers, the same with attribution providers but you really only understand a tool once you’ve used it. In my first few months here, we spent a long time doing an RFP and really sitting down with each of these vendors and getting really detailed into their product and trying to almost overcome that first hurdle which is talking to a salesperson. Like great, here’s the commercials here’s the previews but once you get to talk to a technical person, then you can really understand the advantages of a tool.
So that was the first hurdle, I think we’ve overcome that now and we’ve selected our tools but the other challenge is just finding the people to really build the team out. I don’t know if it’s just here in Berlin, but when it comes to programmatic it’s a bit more nascent here than in the UK and so a lot of the hires I’ve made have been junior people with SEM backgrounds, not necessarily with display or programmatic and that’s fine, we need to support with training but we haven’t had people who can hit the ground running with programmatic or if they do, they’re already at a very senior role. The other thing is, foodora doesn’t neatly fit into any vertical as we’re sort of a hybrid between commerce and food so products aren’t typically made for us the way they are for gaming and ecommerce. Let’s say Zalando want to do marketing, you can market the same pair of shoes to anyone and it doesn’t matter when they buy them as long as they buy them at Zalando. But for food delivery, you’re only hungry for a very short space of time, and also your desires fluctuate. You know, you might want a pizza on a Friday night and you want sushi on Sunday night so trying to understand the human element is really hard to do programmatically.
- Why do you think managed services still exist in programmatic?
Robert: Managed services exist because there is a lack of knowledge around programmatic trading and a lack of scale outside of the larger advertisers. From the advertiser side they may want to control their own programmatic advertising, but not have the access to a DSP, or the knowledge and skills to trade their own activity. Likewise, small to medium sized agencies who want to offer programmatic display to their clients but don’t have the critical mass to invest in specialist staff or technology to deliver it. In both of these scenarios managed services fill the skills and technology gaps required.
- Is it realistic to bring all of your efforts in-house?
Mufadal: No. I don’t think so. And that was never really my aim. I think there’ll always be times when you need to scale quickly and having partners that are willing to work on that with you is invaluable. Let’s say we knew we were launching a new product to a certain market, or if we had sudden growth – for example we launched in Bologna and Verona recently and to build the campaign there takes manual work, but if you have a constant IO with someone you trust, you can get it together quickly and rely on someone else’s resources. That’s one example, the other thing is having access to unique things. There will always be companies who have access to unique products whether that’s an algorithm or inventory or something that you simply can’t buy on your own or you can’t buy at scale.
- What should brands and agencies consider before attempting to bring their programmatic efforts in-house?
Robert: They need to consider exactly what it will take in order to do so effectively. This will primarily involve expertise and technology but obviously that is simplifying it a lot. What level of expertise and what type and scale of technology is very bespoke to the individual circumstances. The first step is often understanding the potential scale for programmatically traded advertising within the business, both now and in the future. From there you can plan out a roadmap from today, to where the business wants to end up. The requirements at each stage along the way will be different and it is important to identify this.
- Any other trend or new practices you’re excited to try out this year?
Mufadal: The most exciting thing that we’re launching this quarter is a combined programmatic out-of-home campaign alongside a mobile geofocus campaign. One of Foodora’s products is a corporate platform for businesses. We have been thinking how display could support a b2b activation effort. We’ve done our research and we’ve found that it’s really just an awareness thing, people just forget. So the digital out of home campaign is going to be tested in Germany and we’ve partnered with a Dutch DSP called OutMoove who have access to various out of home SSPs like BroadSign. The test we’re going to do is to map out all the companies that have a foodora corporate account, we’ve found their offices and we’re going to programmatically buy the billboards in the foyer, in the lifts and around their building for maybe a week and we’ll be using dynamic ads so at 11 o’clock we’ll say ‘Order Foodora for lunch or dinner’ and at the same time we’re going to marry that to a typical geo fenced programmatic campaign and try to win every impression on that lat-long via our other DSP. So basically, you get to work and you see a corporate advert on your phone AND you see one in the lift and if people aren’t willing to activate at that point then we leave them alone! So I think within the food delivery space we’ll be the first ones to be doing programmatic out of home.
Whether advertisers and agencies will continue this trend of building out their internal programmatic offering remains to be seen but it seems that the relationship between brands, agencies and third-party vendors is changing. Programmatic is no longer a blackbox and advertisers are right to be concerned about their brand safety and data transparency. Perhaps the desire for increased control will force vendors to take stock and really address these concerns head on.
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