In-house or vendor-based programmatic advertising? There is no one-size-fits-all solution

There has been much conversation in recent months over the assertion that in-house programmatic will provide brands with more cost-effective and transparent programmatic media buying. Whether here in VentureBeat or in other industry publications, we’re seeing a lot of varied opinions.

The truth is, there is no one-size-fits-all solution.

To assume you need to be “in-house” or “vendor-based” to achieve success with programmatic is not forward-thinking. The smartest course of action is a hybrid approach: an informed, technical, in-house team paired with a set of strong, specialized and integrated partners (with a defined attribution model beneath it all).

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Today’s programmatic expert not only needs to be up-to-date on the latest trends and technologies, but he or she needs to be looking beyond them and planning for what’s coming next. The industry is evolving too rapidly for any one person to tackle it alone, or without the support of their organization. Bringing programmatic in-house requires a fundamental change in the way we think and market, and it’s a decision to be made over months and years of careful planning and strategic hiring.

When considering making this move, organizations must weigh the decision from all angles, including:

Data

At the very core of programmatic is the ability to hone massive amounts of data to build powerful audience profiles and apply them to efficient media buying. Only with the proper data can you even begin to consider the right segmentation strategy and targeting needed for a successful program. We hear a lot about “big data,” but what programmatic experts need is actionable and fresh data. A programmatic program requires insights, analytics and behavioral information to help identify and target the appropriate consumer in the most efficient and effective way.

In other words, using just your own online and offline data set is typically not sufficient.

The scale of reliable first-party data needed to be successful is typically a privilege enjoyed only by ecommerce giants that compile amounts of data incomprehensible to smaller retailers. One way marketers can attain this same scale is by sharing data with other retailers by participating in a data co-op or exchange. Managing such a resource might very well require a different skillset than your current team possesses.

Do you have access to this level of scalable data? Are your professionals equipped to obtain, analyze and optimize it? How will they maintain it?

Great data scientists are a rare breed – and it’s incredibly difficult to find someone who can both analyze the numbers and think strategically about how they relate to your media campaign. If you have that person in-house, cherish them. If not, you’re probably not ready to take programmatic in-house.

Transparency and fraud

One of the most immediate issues pushing brands to bring programmatic in-house is a demand for increased transparency to improve viewability and thwart digital advertising fraud. Given the complexity of these issues and the ever-changing technology landscape, it’s tough to know who to turn to for answers to help achieve your unique business goals and obtain the highest return on advertising spend. Most everyone in the industry is grappling with this issue, so unless you understand the ins and outs of programmatic, it’s not likely something you want to tackle alone.

Sure, you’ll have more control over your media campaigns, but you may not have the data and insights to identify bots and other fraudulent characters that may be affecting them.

As an immediate solution, marketers should ask their partners the tough questions related to transparency, fraud and data. Often, the “behind the scenes” is immensely complicated, which is the benefit of having a trained professional on the front lines. The right partner can help you understand the “how and what” of your campaign.

Also, fraud can often be combatted through the careful analysis of both the audience data and the media campaign activity. If you really want to fight fraud and you want more transparency, ask questions about where your money is going and who’s seeing your ads. Be sure you’re not only working with partners that have their eyes peeled for fraudulent behaviors, but that are using a third-party verification service to evaluate the legitimacy of your campaign impressions.

Cost and people

While initially the idea of taking digital advertising in-house may seem more cost-effective, it is actually quite costly to recruit a specialized team and establish an internal program. It is also crucial that data and creative are refreshed constantly to optimize effective campaigns.

It takes a team (not a single staff person), as well as a healthy budget and months or years of planning, to get a suitable program up and running. Does your organization have digital DNA to take on this role and execute it as effectively as an external partner? For many brands, going fully in-house simply isn’t viable. The solution may be providing one to two specialized internal team members with the necessary, integrated partner resources you can trust in order to effectively and efficiently reach target consumers and your revenue goals.

When it comes to determining the right mix of in-house and vendor support for managing programmatic ad buying, no silver bullet solution exists for every brand. Brands employing a strictly in-house approach will face a hefty price tag and a steep learning curve. While it is definitely beneficial to have a professional within your organization who understands the ins and outs of digital advertising and can direct some of the analysis and media buying, campaigns require a team to continually optimize and adjust in real-time.

The swiftest and most successful brands will find the best balance employs a hybrid approach of highly engaged in-house professionals, as well as outsourced resources that can complement that thinking and provide ongoing analysis and direction.