Evolution of programmatic services in the near term

Gautam Dutt | Date: July 17, 2018

The role of independent trading desks

Recently, we have seen issues of transparency, brand safety, ad fraud and performance being consistently highlighted by marketers. However, Programmatic does help with better segmentation and targeting leading to more efficient and effective campaigns. As a result, programmatic ad spends are showing double-digit growth year on year. In the US alone, ad spends through programmatic platform is projected to be around $33 Bn this year. Programmatic digital OOH and TV have made a start in a few developed countries. One thing is clear, programmatic is here to stay and more and more media will be made addressable through programmatic platforms.

As this space is evolving, we are seeing a crystallization of services into distinct shape, size, colour. There are large global advertisers who are taking all programmatic services in-house. On the other side, there are those who let all programmatic activities be managed through their global media agency. Then there are those who fall somewhere in between these two extremes.

All inhouse has some quick short-term advantages but is hard to sustain in the long term.  Advantages are better control over the whole process and some cost savings in the short term. The key challenge is to keep evolving with the technology and the practice. For most advertisers, any one technology is not so key as to justify the time and energy that is required to be cutting edge in a sub field.

All programmatic through a global media agency provides convenience, consistency and scale at a global level. However, there are issues of trust and transparency and lack of control. Advertisers today want to see what exactly is happening and what is it that they are paying for. Most importantly they want to be sure that they are getting the best advice from their agency partners and are not paying more than what is justified. A total hands-off approach with all programmatic decisions being taken by the media agency is not a practical solution for most advertisers.

For large clients, a hybrid approach can solve some of the problems. Some part of the service can be in house. For example, better ways to capture, store and process data that the company generates. Other parts can be with the large global media agency, i.e. management of budgets across media and key platforms.

Then there are the sub parts like managing and running programmatic campaigns. There are clear advantages for advertisers in adding independent trading desk into the mix. Greater competition forces the large media agencies not to be complacent and improve their programmatic services continuously. On the other hand, independent trading desks have to try harder which leads to more ideas on how to use programmatic platforms to its full potential. Small programmatic desks can be nimbler and more responsive to client’s needs.

There might be concerns related to fragmentation and sub optimal use of programmatic platforms when multiple trading desks are involved. However, these issues are easily addressable if proper analytics infrastructure and practices are put in place. Marketers should look at their requirements and then take a call on the right mix of service providers. A one size fits all approach will not work. In an ever-evolving landscape a test and learn approach is a necessity to arrive at the right mix.