Hybrid trading desks: the future of brand-agency relations?

As programmatic ad buying reaches a tipping point, Nick Reid, managing director of TubeMogul, asks if brands should be taking tech in-house.

If we believed the hype, we’d be forgiven for thinking that the world’s largest brands are all packing up their toys and leaving the media agency playroom in a bid to regain control over their media buying initiatives.

According to a recent polling of marketers from 43 brands by the World Federation of Advertisers, brand use of media agency trading desks has declined from 81% in 2013 to 69% in 2014. In real terms, that’s only six brands departed. On the other hand, when you consider that the 43 brands in question have a combined annual advertising spend of £21 billion, there is still a huge investment being focused on utilising programmatic trading.

So what’s going on? This year, programmatic ad buying has finally reached a tipping point following the 291% growth across EU countries during the past 12 months. Brands are now seeing the true value of utilising software to drive greater scale, more transparency and buying efficiency when its comes to reaching their target audiences and customers.

They are also looking at ways in which to manage, control and exercise their first-party data to track, record and retarget their target audience, but this has ultimately resulted in a requirement to manage multiple data points and partners.

For brands, having multiple agency and vendor relationships means finding the best solutions and partnerships to drive results. Unfortunately, for many this also means a lack of overall campaign frequency, differences in reporting and ultimately a lack of efficiency within a process that is meant to automise and streamline media buying.

This challenge has prompted an ambition on the brand-side to consolidate and control both data and a variety of buying partners through software, something that offers the greatest transparency and control.

In response to this, agencies have been forging closer working partnerships with ad tech providers in order to provide brands with this more holistic solution to media-buying. So forward-thinking advertisers are jumping at the opportunity to centralise their operations, ideally through one software platform.

Brands like Mondelez, Lenovo, and Unilever embody this by building global partnerships that enable their agencies and technology partners to work together in a more productive and efficient way. Digital technology is quickly unifying once-separate media channels, and by choosing the right technology partner, brands are able to drive this on a global level, while still retaining choice over partners and agencies in different regions.

In this scenario, we see that rumours of the agency’s demise have been greatly exaggerated as they continue to play a crucial role in driving operations on a regional and global scale.

Increasingly brands are expanding from the use of programmatic as a tool for DR, to utilising software to deliver on brand objectives and spend. This will continue to increase and scale as they look to reach their audiences across screens – not just on desktop and mobile, but also TV.

These consumers don’t differentiate by channel, and so they should be targeted as multi-screen audiences. Advertisers are looking to communicate brand awareness in this way and in doing so, are relying on their agencies to influence and analyse the customer journey. It’s about influencing prospects and generating brand data that can be analysed for greater consumer insights.

Brands now understand that measuring performance through last click or last view isn’t making the most effective use of their data, giving rise to an inevitable demand for an attributable change in the programmatic buying landscape. Media agencies are driving this change by introducing these hybrid trading desks, which sit centrally in their once siloed outfits.

It allows the brand to own their own data, maintain full transparency in pricing, performance and delivery whilst retaining the agency’s deep-rooted relationships with publishers – with the additional benefit of keeping a close proximity between brand’s programmatic and more traditional media strategies.

Eventually ‘programmatic’ as a term will disappear as software becomes the centralised way that all media is bought, offering a solution that suits all parties.