Nearly half (49%) of all advertising agencies undertake programmatic media buying with their own technology, while 34% combine their own with third party technology, and 17% rely exclusively on third-party offerings.
Agencies in Europe, the Middle East and Africa (EMEA) lead the way, with 58% in the region relying solely on their own technology; this drops to 56% for North American agencies and 33% for those in the Asia-Pacific (APAC).
The report by ExchangeWire, in association with IPONWEB, reveals that agencies that take greater control over their programmatic technology achieve superior performance across a number of key media buying and measurement criteria.
When asked to rate their performance across a number of programmatic tactics, the research reveals that agencies using their own technology exclusively saw a performance rate of 50% when implementing data activation, compared to 31% of agencies not using their own technology.
The importance of agency-publisher connections was also recognised, with almost two-thirds (63%) of agencies using only their own programmatic media buying technology reporting major improvements in their ability to build relationships with publishers.
This compares to 33% of those that do not use their own programmatic buying technology.
Programatic ecosystem knowledge
The ability to understand the programmatic ecosystem is a key differential, particularly in EMEA, where 51% of all agencies say this is the case, compared to 26% in North America, and 33% in APAC.
Perhaps unsurprisingly, agencies that own their own technology (54%) were more likely to believe that this is a key differential than those that do not (41%).
Delivering on targets
Agencies owning their own technology are revealed to be more ambitious when it comes to the targets they’ve set themselves for the year. They expect their technology to deliver more, including combatting ad fraud, improving campaign measurement, and continuing to expand their relationships with publishers.
Barriers to ownership
Despite the clear benefits of programmatic technology ownership, there are some barriers to more agencies taking this route.
When evaluating whether to build their own ad tech stack or use a third party, agencies that don’t currently exclusively use their own technology cite cost of set up (71%) and cost of maintenance (67%) as the main deterrents.
However, these reasons are also revealed as key considerations for agencies that opted to build their own technology, indicating that, with experience of both options, they regard owning their own technology as more cost efficient to using a third party.
“Agencies that own and therefore control their own technology stack have the competitive edge thanks to better performance across a range of programmatic touch points. Owning technology also gives an agency better visibility of clients’ campaigns, enabling them to drive up ROI,” expressed Brian Fitzpatrick, general manager of demand solutions at IPONWEB.
“Owned technology also gives agencies the transparency across the ad tech supply chain that is increasingly being demanded by clients; as a result they are better equipped to tackle issues such as the tech tax, ad fraud, viewability and brand safety.”