5 Essential Things to Know Before Bringing Programmatic In-House

Yesterday, you were OK with putting your money into the pockets of ad agencies. You didn’t know how programmatic works, so this seemed to be the only viable way to survive in the terra incognita.

Today, you’ve cleared things up, wormed your way into the industry, and crave more control, transparency, and cost-efficiency. You are ready to bring programmatic in-house, but the intention is not enough to succeed. Despite the benefits of programmatic in-house adoption being acknowledged by 24% of surveyed marketers, there is also a less-than-stellar side of this decision.

In this article, I’ll give you an unbiased look at the issue to gear you up for tomorrow’s programmatic revolution. Learn these five essentials and get prepared to walk through the thorny path already traveled by Netflix, Unilever, and other big players.

1. Building a Programmatic Platform Is Not That Simple

Some brand executives consider in-housing a simple migration from the protectorship of ad agencies to free-floating with the use of a self-serve DSP. However, using a self-serve DSP implies several drawbacks — marked-up bid prices, no opportunity to use custom SSPs, and no unified analytics for several ad serving platforms. As of 2019, brands use 2-3 self-serve DSPs on avg. to mitigate the negatives of each and get access to different traffic sources.

Full-on in-house programmatic starts where you have your own AdTech stack and no middlemen involved. But have you ever built branded software for your company? If you have, then you already know how much it takes. Creating a DSP is usually reserved for enterprise-level software development, where initial investments exceed millions of dollars. Not every company can afford this here and now.

The halfway mark between developing an ad tech solution and swinging from one self-serve DSP to another is to buy a white-label DSP. With a white-label DSP, you pay a technology fee of several thousand dollars per month and get a ready-to-use and customizable platform at your disposal.

A white-label DSP unites all traffic sources under one roof, cuts up to 30% of your monthly expenses, and becomes a one-stop-shop for campaign analytics and optimization. Such abilities make it a “true” in-house programmatic tech stack that doesn’t require spending a boatload of cash on its development.

2. Aside From an AdTech Solution, You Will Need an In-House Team

Less work done = more money spent. You spare yourself from hiring media buying experts being under the wing of an ad agency. Taking your own programmatic journey, you understand that good specialists don’t fall out of the sky, and it takes a while to find and retain them.

Brands like Bayer or Ally say that bringing programmatic in-house saved them around $10M in the first six weeks (Bayer) and 25% of ad spend in a year (Ally). But wait: those are big names in global business, their HR’s inboxes are overflowing from loads of emails coming from every other industry’s prodigy.

If you’re not sure whether this is going to happen with your inboxes, it is better to prepare in advance. Start seeking staff months before dealing with software, as you risk seeing all your hard work go down the drain. In addition, you can reduce babysitting by choosing platforms with automated optimization algorithms, so your team could have a little breathing room.

3. In-House Programmatic Is About Data Management

Data is scary. If you’re bad with numbers, the data management part probably won’t be your cup of tea. You’ll have to collect, aggregate, and analyze gigabytes of data at your homegrown advertising agency. This is a large responsibility, as well-made programmatic campaigns are often data-driven.

The demand-side platform can be supplemented by a data management platform to utilize third-party data about your audience delivered from across the web. A white-label DSP itself may collect bidstream data, which can be another source of third-party information about people who see your ads.

All idolize data, but that’s entirely nonsense unless you have people who understand how to turn this data into productive actions. Thus, bear in mind that it is a good idea to hire at least one Data Science expert to aid you.

4. Fraud Still Remains a Problem to Address

Average fraud across all ad networks is 15.17%. At 34 of the worst ad networks (you never know which one is the worst before try), the fraud rate reaches at least 55%.

Using any DSP, even a self-serve one, you cut the risk of fraud significantly. Ad agencies and networks often resell ad placements between each other, so the original source of traffic may be lost. DSPs reduce the number of intermediaries through which the ad request passes, connecting directly to the publisher. Moreover, you can identify under-performing sources very quickly thanks to real-time analytics. The chance to fall prey to fraudsters is therefore lower.

Yet, the DSP itself is by no means a way to shield you 100% from bot invasion. Bots constantly get upgraded and are becoming more capable of getting past security measures (if the DSP has anti-fraud protection). To make sure your fantastic campaign results aren’t fake, use third-party tools for bot detection.

5. A Long-Term Programmatic Strategy Is a Must

According to the IAB report, 44% of people expect improved ROI, 34% hope to increase cost-efficiency, and another 44% think that in-house programmatic will enhance their audience targeting.

In-house programmatic adoption is still not a cure-all. White-label DSPs have all the features to help you thrive, but the backbone of your success is a well-defined strategy. The necessary steps of its development are:

• Setting your long-term advertising objectives (brand awareness, sales, in-app purchases).
• Defining the right audience to target (may be different for each campaign).
• Categorizing each campaign by type and identifying the best performing one.
• Making up compelling creatives that resonate with the end-user.
• Choosing relevant sources of traffic for ad placement.

Just like a kitchen knife in the hands of a child, an in-house programmatic tech stack does no good in the hands of people who don’t know how to handle it. The conclusion is that: team, strategy, and education come first, and then the technology will follow.

Read more: AI vs. AI: The Digital Arms Race to Fight Fraud