New IAB programmatic report shows the industry view on in-housing has finally matured
The IAB Europe recently released the 2022 edition of its annual “Attitudes to Programmatic Advertising” report. The survey consisted of approximately 1000 programmatic or media specialists from across client-side and agency-side businesses.
Significantly fewer advertisers now state they have an in-house model of programmatic trading compared to in 2021 (16% vs 50% of respondents). Instead, marketers are increasingly working with a broader range of different types of suppliers to execute programmatic campaigns (see graph above)
The leading drivers of programmatic investment included cost efficiencies (27%), and granularity of controls and transparency of reporting (22%) - showing the continued desire to minimise wastage and get greater visibility into exactly what you are buying.
Interestingly, the key barriers to investment also centre around cost and, essentially, control:
22% of marketers cited ‘cost’
18% identified ‘operational elements (e.g., measurement, performance, use of data)’
18% cited ‘hiring and training staff’.
What can we take from these findings?
There are three reasons why you might expect to see such results.
First, increased technical complexity in the market has held back progress: both in media costs and in control & transparency. The obvious place to ‘point the finger’ is at the much-needed privacy changes. The waning of cookies and the near eradication of Apple’s ID for Advertisers (IDFA) has not only led to increased media and performance costs, but it has also led to a lot of uncertainty about the direction that digital advertising needs to take. Such complexity has driven some in-house teams to look outside their owned operation for assistance – either to get answers from a consultancy, or to simply hand off the challenge to a 3rd party.
Second, incurring the high cost of large in-house teams (with additional training and hiring costs) has come under prolonged financial stress from the pandemic and the threats of global recession and higher cost of living. Reducing reliance on internal buyers allows more financial flexibility where fees paid to suppliers can be reduced in line with budget, but still having in-house strategic and technical aspects covered.
Third, the conversation about in-housing has simply matured. Five years ago, if you had your own DSP contracts and demanded full operational transparency with your agency you were well on your way there as an in-house operation. Such moves are now so commonplace, it is the norm for so many advertisers and has ceased to represent 'being in-house'.
Following this, it has felt like many saw having a fully in-house operation as the destination; the finish line of a race. It had become an objective, rather than what it always should have been: one way of organising your media function (i.e., an operating model) around what you need to do to successfully execute your media strategy.
This report is hopefully showing that the frenzy to declare one’s digital media operations as in-house is dying down. There is a more measured approach based around what the marketing function needs to achieve, and how it is best structured to do that. That means assessing all the options and discovering that you are best served fully by an agency, or through a DSP’s managed service, or in-house, or any other means – no matter what the industry talk is pushing.
You can read the IAB’s ‘Attitudes to Programmatic Advertising Report’ here.