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Over the past 10 years, programmatic in-housing has often been positioned as a magic remedy to aging business models that struggle with massive complexity and a lack of transparency. The growing importance of first-party data, real-time personalization capabilities, uncovering hidden opportunities for optimization, and greater clarity around fees are just some of the reasons why brands pursue this proactive, hands-on approach to media buying.
Yet, for all the hype around the movement and all the promises it offers, there are also numerous tales of marketing organizations that had to put the whole in-housing process on ice because they found it was too lengthy, too expensive, too complicated, and/or too political to pull off.
In the latest episode of our AdTech Unfiltered podcast series, founder of UpLevel Digital Media Consulting and Presidential Innovation Fellow, Raashee Gupta Erry, breaks down some of the considerations brands must make when weighing up whether to bring programmatic media buying in-house.
Here are seven of Raashee’s most keen insights:
(Answers have been edited for clarity.)
"I feel like there is this behavior of in-housing functioning as a trend. It has its ups and downs. It was really popular five to seven years ago when RTB and all these different ways of programmatic buying came into the picture. Then the pandemic hit, and I think a lot of excitement died down because people were just trying to survive—businesses were trying to stay afloat. There's also a lot of behavior change happening from the consumer adoption standpoint.
“It's a mixed bag today because there are so many future-forward changes that the market is going through, with data privacy being a very big component of that. There have been some major headwinds from both the technology side as well as the regulation side.”
“You have to operationalize your in-housing efforts to suit the landscape that you're in. And it's not just media buying. It's not just bringing people in-house, cleaning tools in-house, or bringing a transactional channel in-house. It has to be looked upon from an entire spectrum of how data is intersecting your organization—how data is flowing and outflowing.
“I've heard that some brands who had totally converted to in-house programmatic are now taking a step back. Other folks are starting to take baby steps towards it. Some people are mature. I just feel with data privacy, it becomes even more important to first understand how the data sits in your organization, how the channels are connected (or not connected), and who your players and partners are. That's when you want to take another look at it.”
“It starts with the problem/solution discovery. You have to go down to the brass tacks—to the bare minimum. You need to ask fundamental questions: ‘What are your challenges? Why are you thinking of in-housing? Why do you think it will work for you? What are some of the other solutions that you've considered?’ It’s important to do a feasibility check on all of these, because a lot of times clients might be looking at in-housing as a shiny object, or they might be looking at in-housing as a way to cut costs.
“We ask those hard questions and have a sit-down moment. We conduct an analysis on their existing state and then really understand what they’re trying to change and what the problem is. Sometimes, the answer is in-housing. Sometimes, it might be a hybrid solution. Sometimes, it might be chopping it up in small chunks and doing one part at a time. It really varies.”
“In-housing, in general, is an expensive venture in many ways. It takes time. It takes energy. It's costly. It’s disruptive to the normal organizational flow if a company has been working with agencies for a long time and then, suddenly, they want to stop that and bring things in-house. It does create a ripple effect, and it does slow down the operations—or at least make them different or disrupt them.
“We really have to be thinking about things like: ‘What's their aptitude? What's their tolerance level? What does the marketing lifecycle in their organization look like? What are their key moments, and what are their downtimes and when is the right time to do it?’ So, it really is a lot of questions at a very early stage.”
“Different organizations will be at different stages and on different scales of in-housing. Depending on where they are in the process, and what scale of in-housing they want to do, the stakeholder participation varies.
“When I did in-housing as a brand marketer, we wanted to bring this tech stack of DSP and DMPs in-house and still have our agencies operationalize it. At that point in my conversations around the table, I was talking with IT, I was talking with CRM folks, and I was talking with finance, legal, and product, because all these folks had either a direct or an indirect influence on the programs that we were going to run through the programmatic pipes. It was really important for us to bring them on board—to understand what their needs are. What are the security limitations, for example, from an IT standpoint? What are the data challenges from a CRM standpoint? HR also comes into play here, because in-housing requires you to staff up a team. A lot of conversations need to be had.”
“This, again, starts with early staged conversations in the discovery phase. ‘Why is this idea appealing to you? What are you trying to change by bringing things in-house? Do you have a fundamental problem in that you have a matrix organization and hence you need to operate a certain way? Or is it a need for speed? Or is it that you are sitting on a lot of personal data that you don't want to be sharing outside, and data privacy and security is an important component to your operations?’
“It’s important to ask those questions to then come to an understanding of what's the right balance between in-housing and outsourcing. It could be that you outsource components that are a little more standalone, as opposed to channels that are super intertwined with each other. Or you're outsourcing the operations, but you are owning the relationships, the contracts, the data, and the tech stack, and you are enabling your agency partners to be the operators of your systems. Or are you going all-in and having everything in-house, contracting in-house, having your tech relationships in-house, and hiring internally?
“One area where agencies provide a lot of value is shared learnings—they're always doing a lot of different things, and they’re constantly on top of changes. So how important is that education? How important is that outside thinking? How important is that outside-out-of-the-box creativity for your business?”
“This area is only going to get more complex, and it ties directly into media because we are seeing a lot of headwinds in terms of technology changes with cookieless solutions out there—all the browser changes and the mobile changes as well as a lot of regulation changes.
“It really is important, because data is at the center of all the media that we do in the digital world. It's important for the brands to at least understand what the privacy world looks like, the different roles that people play, GDPR and CCPA, data transfer requirements, and the data sharing and selling restrictions. Who is doing what on your behalf is very important, so even if you do in-housing, or outsourcing, you need to be aware of this and ask tough questions of all your partners and all your teams internally so that you can have a truthful, trustworthy relationship with your customers. Because once a data breach happens, customers are not thinking, ‘This is the middle party that lost my data.’ It's going to be, ‘XYZ brand lost my data!’”
To learn more about the state of programmatic in-housing today and the important role of data in the process, check our Raashee and Noor’s full conversation here.
If you’re starting to think about making changes to your organization’s programmatic advertising strategy and are looking for some guidance, our Programmatic Readiness Guide has all the information you need to set a course of action. It delves into all the elements you need to consider from a business, people, process, technology, and future-looking perspective.