5 Essential Questions to Ask Your Programmatic Buying Agency
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Programmatic advertising has changed the media landscape for buyers, publishers and advertisers at a rapid pace. Once considered an emerging buying strategy for banner formats only, it is now being employed across almost all digital channels and has begun moving into the offline world with television. It is the fast growing segment of digital marketing, projected to account for 83% of all digital spend by 20171.
So, it’s no surprise that programmatic was dubbed the “2014 Marketing Word of the Year” by the ANA.2 However, the very same study also found programmatic to be a term that everybody uses but few understand. Amidst all of the chatter, the pros and cons proliferate. Agencies are rushing to develop technology that sets them apart, while many clients have concerns about the level of transparency and agency cost associated with this “exciting new world.”
Programmatic buying, while game changing in its ability to target and optimize digital investments, comes with less transparency and higher management costs than clients are used to having. In fact, recent analysis has shown that as much as 60% of a programmatic ad buy is allocated to “middle man” transactions3. Client concerns are compounded with fear of kickbacks, arbitrage and fraud. In total, the ANA estimates that advertisers are losing up to $9.5 billion each year due to fraud complexity and lack of media transparency. So, how do you find and keep a programmatic partner you can truly trust? Here are five questions your programmatic buying partner should be able to answer:
1. Are you truly technology agnostic?
With the constant propagation of ad tech vendors, from data to DSP, you need to know how much experience your programmatic agency has with potential partners and what their process is for choosing and verifying the right one for your needs. They should be able to demonstrate their knowledge of all potential partners and agnosticism in choosing a team that will make your dollars work to their fullest potential.
2. What is your process for detecting fraud?
One of the biggest requirements for a successfully executed digital media buy is the minimization of fraud. While ad tech partners will help, your agency should also have a proven process that supplements the technology. Their efforts against fraud detection should be as rigorous in programmatic as they are in direct-to-publisher buys.
3. How big is your wallet?
Many believe that size and scale are not as critical for buying programmatic media as they are in other channels. Why does it matter how much you buy if the pricing is biddable? It’s important to remember that, at the end of the workflow map are a group of publishers. Those publishers have relationships with media firms that are driven by clout more than they ever have been before. And the other players, the program and data providers, also have a healthy respect for scale. Clients whose agencies have more money in the marketplace may benefit from improved technology, proprietary data, new beta tests, reduced pricing, and premium inventory access. So, while scale is important, talent is critical. Which leads to the next question….
4. How deep are the skills of your team?
In this fast changing world, experts are hard to come by and even harder to keep. Many larger media firms are better equipped to invest in talent who have the experience and skill required to navigate this complex landscape. However, scale is not the only determinant of talent. And sometimes, buying smarter can be even more important than buying bigger. Here are some of the key skills you should require on your programmatic agency team:
- Audience Segmentation Experts: They can work with you to make data-based decisions about your target profile, message and frequency when determining the best parameters for the DSP.
- Data Engineers: They understand how to manipulate first and third party data to provide advanced, actionable insights.
- Media Strategists: They can optimize beyond the algorithm. Strong media strategy will not only tell you what the metrics mean for your business, but what the right metrics are in the first place.
Integration between the negotiators, optimizers and analysts should be excellent and demonstrable. In a world where ads are being served up in milliseconds, there isn’t any time for a status meeting to figure out the best next step.
5. How well can you explain your remuneration and what are the options?
There is so much for agencies to be transparent about – from arbitrage to trading desks to media rebates – and with transparency comes trust. Most agencies will be willing to provide transparency around their compensation and, to the degree possible, how your media dollars are being invested – if you ask the right questions. For example:
- Can they describe, in detail, every item on their invoice?
- How much are they paying the DSP and other ad tech partners?
- Is it an option to contract with them directly?
- Can they include contractual provisions that require rebates are returned as cash, and will there be full disclosure of media vendor payments?
- What is the final revenue being paid to the agency for their labor and how does that break out in an hourly fee?
While these conversations can be difficult to have, clients have a right to know, and are only prudent if they ask the questions. Often, it helps to have a third party mediator who understands the landscape and can help pave the way for a productive conversation.
About The Bedford Group
The Bedford Group is an Atlanta based Marketing Management Consulting firm that has been in operation since 1986. It has built its reputation on marketing organization support, agency search and relationship management and strategic marketing consulting. Unlike traditional advertising consultants, The Bedford Group looks beyond traditional marketing disciplines to solve complex, enterprise-wide issues for efficient resource management and improving marketing ROI.