Marketers Expanding In-House Capabilities For Programmatic Buying: ANA Study

Role of External Agencies Declining

NEW YORK (Dec. 18, 2017) — A new ANA survey revealed that more than a third of respondents (35 percent) have expanded their in-house programmatic media buying capabilities, and have subsequently reduced the role of external agencies that previously performed the same function.

The 35 percent figure marked a notable increase from a 2016 ANA/Forrester report that found only 14 percent of ANA marketers were reducing the role of their external agency as a result of in-house expansion.

The study also showed that while agencies still play an important role in campaign execution, most marketers prefer to set the strategy for their programmatic campaigns and own the contracts. The majority of respondents (69 percent) indicated they handle strategy and campaign direction in-house, while only 24 percent outsource the strategy and campaign direction to an agency partner.

In addition, 19 percent of respondents said they have opted in to an undisclosed programmatic model with their agency. This refers to media purchased for an advertiser that does not disclose the actual closing/winning bid prices, only the final price charged to the advertiser. This practice can hide agency margins and fees. This is a significant change from the 2016 ANA/Forrester survey, which indicated that 34 percent of respondents had opted in to an undisclosed programmatic model.

“It’s clear that a growing number of marketers are taking control of their media investments,” said ANA CEO Bob Liodice. “They’re making important changes to their programmatic buying practices to address media transparency concerns. Specifically, they’re moving sensitive responsibilities in-house and enhancing decision-making by better understanding their costs and media investment transactions. We urge all marketers to contemplate these developments and consider following suit.”

FINDINGS
The study, “The State of Programmatic Media Buying,” also revealed the following:

• A large majority (78 percent) of respondents are either concerned or very concerned about brand safety issues in programmatic media buying.
• Companies are focusing their programmatic media buying on online display on a desktop (85 percent), followed by mobile display (74 percent), online video on a desktop (71 percent), and mobile video (62 percent).
• The top-cited benefits of programmatic buying are better audience targeting, the ability to build audience reach, and real-time optimization.
• Most respondents have one staff member who devotes 100 percent of his/her time to programmatic initiatives and three employees who work on programmatic initiatives as part of their other work responsibilities.
• Only 40 percent of respondents are comfortable about the level of transparency they receive with their programmatic media investments. Those who said they were uncomfortable cited factors including hidden costs, too many people in the middle of the transaction, and uncertainty on where ads actually run.

RECOMMENDATIONS
As part of the report, the ANA offered marketers the following recommendations for maximizing control over their programmatic media investments:

• Determine How Your Organization Will Define Programmatic Success. Set a clear path forward for your programmatic initiatives. Gather intelligence on how your peers are setting expectations for their campaigns and select your benchmarks intelligently.
• Build Internal Expertise. One of the major benefits of programmatic advertising is the ability to track the impact of a company’s investment and optimize ad campaigns in real time. But marketers can only take advantage of this when the marketing team knows how to navigate the data.
• Own the Data and Knowledge. Marketers should consider owning the contracts for the DMP, DSP, or both, and then give their agency access to the platform to run the campaigns. This gives brands more leverage to demand transparency into contracts and fees and a high degree of control over programmatic planning and execution, among other benefits.
• Understand the Tradeoffs of an Undisclosed Programmatic Model. All marketers should ask questions and fully understand the tradeoffs between disclosed (more transparency) and undisclosed (no transparency but perhaps cheaper) to make the deals that are in their best interests.

METHODOLOGY
The survey was conducted in June and July of 2017, and 149 client-side marketers participated. Respondents had a median of 21 years of experience in marketing, and more than two-thirds (67 percent) reported their job level as director or above. Approximately 66 percent of respondents focus their marketing on B2C efforts, 13 percent on B2B, and 21 percent on both B2B and B2C. A total of 48 percent of respondents work at companies with annual U.S. media budgets under $100 million, and 52 percent work at companies with media budgets of $100 million and more.

A copy of the full report is attached.

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ABOUT THE ANA

The ANA (Association of National Advertisers) accelerates growth for marketing professionals, brands, and the entire industry. With a mission to shape the future of marketing, the ANA sets the agenda for the industry, connecting its members to unparalleled expertise, industry-leading resources, and an influential global network. Representing over 1,600 companies — including 1,000+ client-side marketers, 600 marketing solutions providers, and 20,000 brands — ANA members collectively influence $400 billion in annual marketing spending. By championing the 12-point ANA Growth Agenda and the CMO Growth Council, the ANA drives actionable change, empowers marketers, shapes the marketing ecosystem, and delivers exceptional experiences at every touchpoint. Since 1910, the ANA has been setting the agenda for industry transformation. It enables marketers to advance their ambitions, make better decisions, and create lasting impact for their organizations and the industry.

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