The vast majority of major advertisers are now using in-house trading desks as part of their programmatic operations, a World Federation of Advertisers survey has found.
Working with Iponweb, the trade body surveyed 37 companies with an adpsend of about $76bn (£58bn) – an average of more than $2bn for each business – for its Programmatic, Data & Technology Global Survey 2020 and found that 84% were now using either an in-house trading desk or a hybrid “managed service” model. That figure has increased from just 21% when the WFA conducted a similar study in 2016.
While moves in recent years by major brands such as Vodafone to bring programmatic buying in-house may have once led to concern that media agencies could be pushed out, the picture emerging is of advertisers using a range of approaches, including agencies. Three-quarters (74%) of companies told the WFA that they used an agency trading desk, little changed from 2016’s figure of 72%. Almost the same number, meanwhile, now use independent trading desks (71%), up from 46% in 2016.
The research found that globally, two-fifths (41%) of global digital media investment is now bought programmatically, but there are significant differences between regions: the figure is 50% in the US, 31% in Europe and 20% in Asia-Pacific.
The WFA found advertisers increasingly aware of the need for first-party data strategies as digital media adapts to a world beyond third-party cookies, with user privacy a greater priority. Seventy-nine per cent of respondents said first-party data was business critical for audience targeting, with audience creation/segmentation and campaign optimisation both cited by 63% as business critical.
In contrast to the lower level of programmatic buying in Asia-Pacific, marketers in that region say they are more prepared than their peers in the West. Fifty-four per cent of respondents in Asia-Pacific said their first-party data was fully or significantly leveraged.
However, on a global level, only 28% said their first-party data was fully or significantly leveraged.
As well as looking at the global market, the study specifically profiled Asia-Pacific, and this has been examined in more detail by Campaign Asia-Pacific.
“Advertisers have been on a steep learning curve with the arrival of programmatic, but many are now taking greater control of the process through an expanding mix of in-house, hybrid and agency models,” Ranji David, director, Asia-Pacific, marketing services, at the WFA, said.
“Whichever model they choose, transparency of the supply chain is critical so that they can assess which elements are contributing to their business growth and marketing ROI, as outlined in the WFA’s Global Media Charter.
“Brands pushing for greater transparency and ownership over their supply chain, tech stack and buying models will quickly translate to a stronger industry and better client/agency relationships. While this might sound counter-intuitive, what this report communicates to me is that the greater interest around in-housing/hybrid models isn’t at the expense of agency models such as the agency trading desks. Instead, ATDs are evolving with client needs and delivering a service experience that improves how programmatic delivers for our businesses.”
The research was conducted in the fourth quarter of 2019 and the first quarter of 2020, meaning it does not reflect any impact from the coronavirus pandemic, which has led to increased levels of online shopping and digital media use across many markets, as well as forcing office-based businesses of all kinds to work remotely.