Nearly 50 percent of agencies exclusively use their own tech to enable programmatic trading, according to a research released by IPONWEB and ExchangeWire, though a slim majority still use third party tech to some degree. The study predicts more agencies will shift to only using their own tech in the coming years too as they seek to improve upon the way in which third parties have handled issues like ad fraud and brand safety, issues which they say are tempting clients to in-house the process themselves.
ExchangeWire polled 129 respondents working in programmatic media for marketing agencies across the world to measure how an agency’s reliance on its own programmatic trading tech affects its business.
The majority of agencies (51 percent) still use third party tech to some extent to perform programmatic buys, either relying on it entirely or using it alongside their own tech. Overall, 34 percent said they use a combination of their own technology and third-party tech, 17 percent said they only use third-party tech, and 49 percent said they exclusively use their own technology.
Use of proprietary tech for programmatic buying is highest in the EMEA region, where 58 percent of agencies surveyed exclusively use their own tech. Over half (56 percent) exclusively use their own tech in North America too, where only 8 percent are completely reliant on third parties for their programmatic trading. While only a third of agencies exclusively use their own tech in the APAC region, the study says this is to be expected as Western agencies tend to be earlier adopters of new technology, and that APAC agencies will likely catch up in the next couple of years.
Those agencies which have shifted to only using their own tech for programmatic buying report that doing so has improved performance in a number of areas.
Fifty percent ranked the performance of their campaign measurement and analytics as ‘extremely strong’, compared to just 18 percent of those using third party tech. Meanwhile 50 percent of agencies using owned and operated tech said their data activation was extremely strong, compared to 31 percent of those working with third parties. Performance in audience segmentation, creative optimisation, and measuring the incremental impact of media buys were also all rated much higher by agencies using their own programmatic tech.
Gautham Maediratta, COO APAC at Mindshare, said this is driven by industry solutions in many cases falling short of what agencies need. “Very few third party data providers offer a granular view into how segments are defined from a recency, frequency and statistical relevance perspective,” he said. “In those areas it becomes hugely beneficial for us to have internal data activation and audience segmentation tools like [m]Platform.”
Proprietary programmatic tech also appears beneficial for building publisher relationships. Almost two-thirds (63 percent) of those who exclusively use their own technology said that programmatic media buying tech has improved their ability to build relationships with publishers, compared to 33 percent of those who use third party tech.
The report argues that this could be a significant way for agencies to differentiate themselves, since 49 percent of respondents said that access to a greater number of publishers is one of the most important benefits of programmatic buying for their clients.
The greater transparency associated with owned and operated programmatic buying tech could also be a way for agencies to sell themselves. “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,” said Brian Fitzpatrick, general manager of demand solutions at IPONWEB.
While the research demonstrates a range of benefits for agencies building or buying their their own programmatic tech, cost is the biggest deterrent. Of the agencies surveyed who have decided to continue working with third parties for programmatic buying, cost of maintenance and cost of set up were listed by 71 percent and 67 percent respectively as primary reasons for their decision.