Going in-house is Low Risk and High Reward

Blog post   •   Sep 08, 2014 10:58 CEST

When it comes to investing, a key principle is low risk, low reward and high risk, high reward. When it comes to taking programmatic display in-house, the opposite characteristics are true. It’s actually a low risk, high reward set up. Let me explain why this is true.

6 question to ask yourself before going in-house:

Here are six questions an advertiser should ask themselves before going in-house.

  1. Why should I go in house? 
  2. What do I need to go in-house? 
  3. How should I go in-house? 
  4. What kind of implementation framework should I start thinking about? 
  5. What happens when I succeed? 
  6. What happens if I fail?

Why should I go in house?

If you have been thinking about going in house, you are probably feeling hesitant about it. Programmatic is still in it’s infancy, so it’s completely fine to feel a bit uncertain. If you check all or some of the following boxes, then your thinking is miles ahead of many buy-side programmatic participants.

I want to guarantee receiving total transparency I have or will have valuable data to activate, but I want to keep it close to home I am concerned about my 3rd party partner doing audience selling on my cookie pool I would love to raise my teams programmatic competence and data discipline I am not sure if my current buy-side partner puts my bidding strategy ahead of my competitions

What do I need to go in-house?

The first thing you need is a sufficient spend level. If you buy at least 50 million programmatic impressions per month and plan to grow, then going in house becomes a viable strategy.

The second thing you need is a platform built for in-house programmatic display advertising. It should have the following features:

DSP bidder with an explainable algo DMP for audience segmentation DMP for data ingestion Easy to use creative banner templates and custom banner creation Ad server for counting what you buy and access to the raw server logs Transparent reporting that shows cost and media breakdown, and any extra billable units related

How should I go in-house?

There are two general approaches. Ready-to-go-today and Stepping Stone. The first approach is for advertisers who already have a good plan. The second approach is to take in-house in two steps. First, partner with a transparent platform partner and pay fixed managed service fees over a given period as a stepping stone to going in house. The key objective is to build a time-bound in-house plan into your managed service deal with milestones around team formation, education and comfort level to fly from the nest. The second step is to implement it.

What kind of implementation framework should I start thinking about?

Whether you’re ready to launch an in-house program today or prefer the stepping stone approach, you’ll need an implementation framework either way. You should work with with your transparent platform partner as a consultant or use your own consultants. No matter how you go about it, your implementation plan should take the following steps:

Set high aspirations for your in-house programmatic investment. For example:

Our in-house team is going to be known as the premier programmatic experts in the industry.

Get quick wins, get early wins. These are relatively easy goals to accomplish in a relatively short time period:

Pick the right transparent platform partner Recruit a core internal/external team Pick a team manager Define what you expect from this team Provide the tools and guidance to meet your expectations.

Set a few signs of momentum that you expect to see by certain points in time. Since going in-house is largely driven by cost savings, you’ll know for certain if this objective is materializing or not. Another important sign is seeing others in your industry follow your bold path to recapture the competitive advantage you now enjoy. Lastly, you know a sign of momentum when other non-programmatic marketers in your company ask if they can join the forefront of your company’s marketing future.

Sustain the impact. This simply means that when your team is up and running, and you’ve realized your signs of momentum, your in-house team can now run on its own and thrive.

What happens when I succeed?

If you follow the previous four points, the payoff in terms of savings will be big and should materialize over a short time period. You will have gained total control over your display spend and will truly be in the 99th percentile of programmatic knowledge, and will keep paying dividends as programmatic expands into other mediums such as TV, radio, OOH and IoT.

What happens if I fail?

There is a very low likelihood of failure with rationale goals, hand-picked talent, aligned incentives and a transparent technology partner. If you default back to a managed service or even a trading desk, you will now be in the drivers seat. This is precisely why taking programmatic in-house is low risk and high reward. It’s a rare window of opportunity to gain a privileged asset and competitive advantage.

As Henry Ford said, “Whether you think you can, or you think you can't--you're right.”