Just under two thirds (65%) of marketers in the US have moved programmatic ad buying in-house or are beginning to, according to research by the Interactive Advertising Bureau (IAB).
Breaking that figure down, 18% have already achieved internalisation of programmatic ad bidding strategies, while the remaining 47% are making continued efforts, according to the survey of 119 US-based brand representatives.
With cost efficiency and transparency cited as a chief driver of these decisions among increased ad performance and better control, the research comes alongside a GroupM report revealing programmatic platforms took around 10% of ad spend passing through them to publishers.
However, while in-housing programmatic strategies could cut costs for companies and eliminate existing concerns over hidden fees, the IAB claims the process takes up to a year to implement, while a full in-house setup - from media strategy, ad operations, optimisation and stewardship - is incredibly resource intensive.
Instead, the majority will favour a “hybrid approach”, where select programmatic functions will be taken in-house or shared with partners. The particular areas that brands are looking to control are the strategic aspects, which include media strategy, establishing KPIs, data management and direct control of contracts with Data Management Platforms (DMPs) and Demand Side Platforms (DSPs).
Campaign analysis and optimisation, meanwhile, are areas which may be “kept in check” by resource limitations, according to the report, while technology related to highly-specialised programmatic functions will likely be outsourced.
While programmatic platforms themselves have felt the squeeze as more brands seek to trim down their partner bases, resulting in an up to 25% decline in fees within the last few years, it’s unlikely they will suffer from a desertion of customers in the very near future; the IAB warns moving functions in-house is not a move to be made lightly, requiring talent recruitment, organisational buy-in, complex coordination of partner contracts and staff training and orientation.
Within the study, some 13% of companies had trialled in-house programmatic but had decided not to go forward while 22% had decided to forego any development of internal capabilities entirely.
The IAB’s study for 2018 follows a similar report by the Association of National Advertisers (ANA) in 2017, which found that 35% of brands have expanded their in-house programmatic media buying capabilities and limited the role of outside agencies, up from 14% in 2016. Meanwhile, Adobe predicted 62% of brands would bring programmatic in-house by 2022.
For those brands still set on internalisation, the IAB provided a five-point checklist of considerations, including evaluating potential media performance and conducting cost-benefit analysis; creating a “ramp up” plan; practising data-centricity; establishing a tech stack, and attracting and retaining talent.