Hockey great Wayne Gretzky once said, “I skate to where the puck is going to be, not where it has been.” The same approach should be taken when it comes to the strategy of agencies in regards to the in-house programmatic movement.
In media there is a school of thought – a very traditional and antiquated one– that the in-house programmatic movement is detrimental to agencies because it’s threatening their position as it cuts into their market share and sphere of influence. Many agencies are making a mistake that is fatal in both the game of hockey and the world of business: they are being too reactionary.
Naturally, agencies are interested in keeping their position, as it’s perceived as being more lucrative and keeps them in control. But, what they are failing to see is that the evolution of the market is happening quickly and will not wait for anyone.
What needs to be recognized is that with the current technical developments in the market, the era of automated programmatic advertising is upon us and the opportunities for agencies are endless. To make the point clear, lets take a step back and explain exactly what the status quo is, or at least has been. Agencies have been earning from their media buying power for a long time, pushing all the buttons and pulling all the strings themselves, leaving advertisers in the dark when it comes to campaign management.
Consumer interaction however has become a data driven one-to-one dialogue. From personalized display ads to individually targeted television ads, the increasing role of structured, actionable data as a universal foundation for all interaction with the user is irreversible, and the best way to activate these opportunities is by advertisers controlling and managing their own first-party data.
To show there is room for agencies in the current landscape, let’s take a closer look at the how the market is shifting. Going In-house does not happen with the push of a button or the signing of a contract. It is a gradual transition and companies will need to achieve two key things as part of this evolution:
- All companies need to develop a strategy towards data-driven interaction and translate their company strategy to a programmatic execution plan.
- All companies need to organize and staff their operation to become capable of data activation and executing the external communication programmatically.
So what does that leave for agencies?“The world, Chico, and everything in it.” But first, agencies must refocus on the core essentials of what they bring to the game, offering a particular specialist service. As soon as an agency is willing to abandon its media arbitrage business model, it can start to see with clarity what is going on in the world around it, With the rise of Martech, which enables you to consolidate your entire tech stack through API integrations, we have a tsunami of market demand for specialist services surrounding the programmatic evolution ahead of us, and this is just the beginning of the storm ahead.
Rather than stifling advertising technological advances by (re)building closed ad networks or frightening clients with apocalyptic scenarios, as soon as we let data and algorithms optimize our trading and targeting, we’d rather see the “manual” world enforce the holistic automation by tapping into the endless consultancy opportunities. The revolution has room for all.
At the genesis of this revolution is campaign execution. Companies will license communication and advertising solutions just as they have been with CRM, Financial controlling and Supply Chain Management over the past decades. These solutions come in various shapes and sizes but all enable advertisers to target users individually and algorithmically determine the purchase price of media.
Campaign setup however, day-to-day optimization, data segmentation, and first line support as a certified software operator, is all needed once the software is licensed. Now think of integrating new supply, non-RTB media or third-party user data, specialization on the creative part of programmatic -personalized- ads, user journey mapping or algorithmic conversion attribution modeling. The current shape and division of roles in the markets of SAP, Salesforce and Oracle teaches us that the in-house trend unlocks new greenfields for all types of consultancy. The world is still yours to conquer!
And the greenfields horizon looks broad and distant. What already started this year with integrating additional 1st party data silos such as CRM or revenue management data, will develop in the coming years towards a full-enterprise resource planning around data-driven and algorithmically optimized external communication. And consider this, we are all new to this. Present adoption of data activation offers you future pole position in applying data-integrated communication to fully align with a company’s core strategy.
Advertising companies are not looking for an agency trying to keep them in yesterday’s market equilibrium. Your clients want and will tap into the evolution sooner or later. Even if today they still believe in walled selections of hand-picked inventory and on brand experience index figures based user engagement. Let us all look ahead and embrace the dynamics and complexity of a connected digital universe, learn it yourself by doing it for others, and pick your opportunities of tomorrows value addition.
After all, we may end with another Gretzky quote, “you miss 100% of the shots you don’t take.”