Over the last two years we have increasingly moved to in-house management of programmatic platforms and are firmly biased in favor of DSPs (programmatic Demand-Side Platforms) that we can run ourselves.
There has been a lot of debate over outsourced programmatic vs. in-house and I want to be clear on the difference. Yes, we are an agency, so from our client’s perspective this seems like an outsourced solution, but this is different than “managed” programmatic run by the programmatic firms themselves.
Here are the reasons we choose to become experts on the programmatic platforms we manage rather than to rely on the expertise of the DSP/Ad Networks themselves.
1. Financial Control
I am talking about the financial control of the outcomes of marketing, not spending the budget. Ad Networks and DSPs are very good at spending ad dollars, but not very good about prioritizing strong financial outcomes as it might mean not spending the whole budget. We are fine underspending a budget if we feel it doesn’t add value to our clients’ bottom line.
2. We Have a Better Financial Lens
Because we manage to financial KPIs, we have the deep financial and holistic view that allows for better decision-making in all ad networks. The DSPs/ad networks simply don’t have the decision-driving financial information for making informed choices. It is just not possible for them to know how to do what is right and when to do it.
Case in point: One of our clients had Amazon run an Amazon DSP campaign for them. We then ran the same test managing the choices in the DSP ourselves. Yes, we spent less than they did, but we made far more money at the end of the day, moving from a total loss at Amazon’s hands to significant profit in ours. You simply can’t make money in digital if you don’t measure against financial KPIs.
3. We can manage risk in testing
With our holistic view we often don’t have to put the same size budget into testing a programmatic audience compared to when that is managed by the DSP/ad network. This is because we can set up tests to look for Out-Of-Channel effects in brand search and direct visits as part of the test protocol. Most of the time we cannot do these lift-based analyses inside the DSPs themselves.
The second part of risk management is in knowing explicitly what choices are being made in audience selection. It is quite common for DSPs being managed internally to not be transparent about audience choices. In addition the managed service staff may have no insight into audience targeting performance in other networks in order to make informed decisions.
4. Data quality
While it should be apples-to-apples on the data side in terms of what you get out of a DSP when managing it in-house vs. through a managed service, it is often quite different. We have seen multiple times that the data availability from a managed service campaign is far, far less than what is available when managed in-house. Things we would consider basic, such as audience breakouts may not be available.
We’re always going to be biased in favor of better data, as that makes for better decisions.
5. Coordination and Timing
Working with any managed service can sometimes feel like a game of Telephone. Even when the correct action items are taken, there is often a delay that is more than that expected. Whether timing is based on correcting for performance or coordinating messaging with other programs, you want as much control as possible for seamless execution. You also need the accountability be able to know what happened when. While this might seem to be driven by client reporting, it is actually most important for the accurate interpretation of performance data. Again, we’ll err on the side of data cleanliness, thank you.
In the end, we get better results when we can control the decisions in the programmatic exchanges. Since our results are stated in financial terms to our clients, there is no arguing something working or not working. The control, trust, clarity, and transparency we get by operating programmatic in-house is a clear win for us and a clear road map for our future.