Many advertisers chose to manage programmatic buying in-house, but outsourcing to an agency trading desk can be a better option for small and midsized advertisers. Here are five reasons why:
1. Skill is important when it comes to programmatic media buying.
Agency trading desks (ATDs) are specialists because programmatic media buying is their primary focus. They’re constantly running campaigns for multiple clients and handling a consistent influx of media spend. Furthermore, they focus on serving similar clients, enabling them to become experts at campaign management for a specific industry (e.g., pharmaceutical, automotive). The ATD’s insight into the success and failure of other industry players ensures that their clients keep up with the competition and learn collectively from others’ mistakes.
2. ATDs can expertly run campaigns across multiple platforms (demand-side platforms and other related technologies) at scale.
Successfully managing a large number of campaigns across platforms isn’t a piece of cake. In addition to a main demand-side platform (DSP), the ATD may have several specialists DSPs that serve as niche retargeting platforms by excelling at techniques like CRM or trigger email. The ATD will also have a couple audience data management platforms in their stack. It will use an ad server for the purpose of serving complex creatives, working with rich media and HTML5 creatives, and even for executing custom ad formats. An ad server can also be used to collect attribution-based data for reporting purposes. The ATD will need to bring performance data together on a reporting or performance aggregation platform. Operating multiple types of technologies in tandem requires knowledge about how to connect these ad technologies effectively for different types of clients.
3. ATDs benefit from the ownership and use of historical bidding data.
(This is, of course, assuming that the ATD uses a DSP that allows it to collect bidding data.) When running repeat campaigns for the same customers, ATDs can use historical data to improve performance. This becomes really handy if an ATD is working with a customer who has campaigns that are conversion focused.
If you’re training an algorithm, a certain number of positive actions are required to create an example group for the algorithm to learn, train and build a bidding model. Usually, you’ll need to accumulate at least 100 positive actions or conversions for the algorithm to learn. For a small advertiser, 100 conversions is a big number. Hence, if the ATD is accumulating historical bidding data, it’s laying the groundwork for more efficient algorithm training and launching campaign optimization algorithms that are conversion focused.
4. A small advertiser with $5,000 for display ads can accumulate some data, but it will be minuscule compared to what an ATD accumulates across its entire client base.
By managing multiple clients and aggregate budgets, an ATD learns the best places to buy and direct buy. It can also conduct better buys by leveraging different clients across an industry to achieve economies of scale. With more money to bargain with, the ATD simply has more power to reach the places a small advertiser can’t alone.
5. An ATD has tags all over the place, which is incredibly useful for collecting audience data and retargeting.
For example, if an ATD has 10 different automotive clients, it will collect a similar audience for these similar companies. If it collects a wide variety of different, smaller variables, it can start to describe micro populations within the larger automotive audience. A smart ATD will make sure its data is fed into a powerful data management platform that will make it easy to conduct lookalike audience modeling and find new, targetable audience segments. Running many campaigns is a valuable experience for ATDs. It’s an opportunity to learn as much as possible about targetable audiences. This information can help ATDs create and improve audience segments. (Individual advertisers would rarely achieve the necessary volume or scale.)
Ultimately, a smaller advertiser will find that an ATD can offer a lot when it comes to programmatic media buying.