1、 UK Programmatic In-Housing:Adoption Rate,Benefits,Depth,and Types of In-House Buying Functions Versus Europe APRIL 2019 2019 Interactive Advertising Bureau Sponsored by This report was produced by the IAB.The final report,findings,and recommendations were not influenced by external sponsors.1 ACKNO
2、WLEDGMENTS This report would not have been possible without oversight from the IAB Data Center of Excellence board members and the collaboration and financial support of our sponsor,Accenture Interactive.The final report,findings,and recommendations were not influenced by external sponsors.Board Mem
3、bers Sponsored by Additionally,we extend our deepest appreciation to all the marketers,publishers,technology developers,and service providers that have contributed their time,insight,and enthusiasm in support of this report.The Author Gerard Broussard,Principal Pre-Meditated Media,LLC IAB Contact Or
4、chid Richardson VP&Managing Director IAB Data Center of Excellence 2 TABLE OF CONTENTS INTRODUCTION.3 Executive Summary.3 Background,Objectives and Defining Programmatic.5 PROLIFERATION OF PROGRAMMATIC.6 DRIVERS OF PROGRAMMATIC IN-HOUSING.10 THE DEGREES OF PROGRAMMATIC IN-HOUSING.11 FIVE THINGS BRAN
5、DS SHOULD DO.13 NAVIGATING GDPR.15 APPENDIX.20 3 INTRODUCTION Executive Summary UK Programmatic In-Housing Report Overview This report provides survey results on brands adoption rate of programmatic in-housing,in-housing drivers,type and depth of in-house buying functions,and General Data Protection
6、 Regulation(GDPR)impact focusing on the UK within the context of four other European markets:France,Germany,Italy,and Spain.Also included are insights into the drivers and challenges of in-housing,based on one-on-one interviews conducted among UK and other European-based brand advertisers actively i
7、nvolved in programmatic buying.Programmatic in the UK-an Ingrained Buying Process Accounting for nearly 90 percent of the UKs display ad spending,programmatic is the predominant digital ad placement process.As digital marketing and advertising investments surpass other media forms,programmatic in-ho
8、using becomes attractive for brands that desire to more closely control their digital advertising strategy and outcomes.European Brand Discussion Insights These key directional drivers emerged during brand interviews:Brand Destiny Brands emphasized the merits of in-housing as a way to control their
9、own strategic destinies that lead to growth acceleration Globalization Brands with worldwide footprints are beginning to coordinate in-house efforts across markets as part of multi-year plans GDPR Impact All brands have experienced nominal GDPR impact on their businesses;according to one brand,the r
10、egulations helped to improve data quality Expanding In-Housing Beyond Display Some brands have their sights set on adding search,digital video,or social to in-house capabilities,signifying a long-term commitment to expanding programmatic functions beyond display These in-housing challenges surfaced
11、during brand interviews:Cross-Channel Strategy Disconnect One brand expressed concern about developing in-house silos where specific digital advertising channels are planned and executed in isolation(e.g.separate display and search)and across media(e.g.,digital and TV)Internal Resources For the most
12、 part,in-house staff for tactical activities such as optimization,placement,and results reporting is in short supply;media agency partners generally fill this gap 4 UK Survey Highlights UK and Italian Brands Lead European Programmatic 71 percent of UK brands and 72 percent of Italian brands are prog
13、rammatically active,above the 65 percent European norm.Meanwhile,German(48 percent)and French brands(63 percent)registered the lowest programmatic buying engagement,reflecting the heavy focus on consumer privacy in those two countries.Non-Programmatic Brands Are Planning Evaluation 53 percent of Eur
14、opean brands currently not programmatically active are likely to explore programmatic within the next 12 months,signifying further potential in-housing growth.86 Percent of Programmatic-Active Brands Have In-House Capability In-house setups are divided by brands having fully moved buying functions i
15、n-house(39 percent)versus those with partial capabilities(47 percent)involving media agency partners.At 88 percent,the UKs in-house rate reflects the European norm.GDPR Nominally Affected Programmatic Ad Spending Nearly two-thirds of UK brands indicated that programmatic ad spending actually increas
16、ed during the eight months following GDPR inception,suggesting that marketplace demand softened GDPR impact.GDPR Positively Affected Data Quality 76 percent of UK brands reported some level of data quality improvement,the highest across all five markets and likely achieved through more precise verif
17、ication of consumers who consent to be tracked and reported.GDPR Had Moderate Impact on Data Loss Only 7 percent of UK brands felt strongly that the volume of targeting data declined following GDPR inception,a level less than one half the European 18 percent norm.Drivers of Programmatic In-Housing T
18、he primary motivations for programmatic in-housing cited by UK brands surveyed were found to be cost efficiency,audience targeting,and campaign effectiveness,all of which are wrapped in brands desire to drive business by controlling their own destiny.The Dynamics of Programmatic In-Housing Brands te
19、nd to prioritize in-house resource allocations for strategic programmatic activities but favor working with partners when executing tactical and technical programmatic functions,where full in-house capability investment requirements are substantial.This strategy-focused approach maximizes brands con
20、trol at the lowest investment/cost.Strategic/Managerial Functions More Likely to Be Internal Higher-level programmatic functions,including media strategy,audience planning,and validation,establishing KPIs,data science,and direct control of contracts with DMPs and DSPs,comprised the bottom half of th
21、e list of outsourced activities.Brands Prefer to Outsource the Tactical Middle Ground The brands surveyed were moderately more likely to outsource trafficking,campaign analysis,and optimization than 5 strategic/managerial functions.Many of these tactical activities could be shared with one or more a
22、gency or DSP partners.Highly Specialized Technology Most Likely to Be Outsourced Not surprisingly,brands were more prone to outsource highly-specialized programmatic functions such as data management,technology build-outs,and training.Background,Objectives and Defining Programmatic Programmatic adve
23、rtising execution has become the norm for targeting and placing digital advertising,at scale and with minimal overhead.During the past few years,marketers have increasingly brought programmatic ad placement functions in-house.In May 2018,the IAB and Accenture Interactive issued“Programmatic In-Housi
24、ng:Benefits,Challenges,and Key Steps to Building Internal Capabilities,”a U.S.-based report that provides key insights into a wide spectrum of core in-housing aspects:the prevalence of in-housing,benefits to brands,challenges,depth of in-house functions,and the planning and building of an internal o
25、peration.The 2018 study found that programmatic strategy is most deeply integrated into their organizations,while tech stack,media tactics,and execution are outsourced to partners at data management firms,media agencies,and demand-side platforms(DSPs),respectively.During February and March of 2019,a
26、 version of the U.S.survey was conducted in five European markets:France,Germany,Spain,Italy,and the UK,which also added questions about the impact of GDPR and future programmatic planning.This report was conducted by the IAB Data Center of Excellence and aims to facilitate meaningful conversations
27、among buyers,sellers,and vendors about the current landscape and evolution of brands programmatic in-housing trend and promote informed evaluation and guidance related to this practice.The key objectives of this report are:To examine how programmatic in-housing has evolved to date in the UK To ident
28、ify benefits/drivers of in-housing practices for brands To provide detail on the types and level of programmatic in-house buying functions The insights in this whitepaper are based on a synthesis of perspectives from subject matter experts,gathered through one-on-one interviews as well as a quantita
29、tive IAB survey.Participants represented brands and presided over programmatic ad placement at their organizations.Programmatic Interpretation When asking about brands transactional activities,the survey questionnaire used the simple word“programmatic”which may be broadly interpreted by respondents
30、given the continuing expansion of programmatic across display,search,video,etc.So,brands survey responses are likely to include any programmatic activity that fell within the digital media spectrum.6 PROLIFERATION OF PROGRAMMATIC Programmatic Ad Spending:Healthy in the UK Programmatic display ad spe
31、nding in the UK continues its steady ascent and will account for nearly 90 percent of all digital display ad expenditures by 2020 according to eMarketer.This spending trajectory is similar in direction for search,mobile,and digital video.Programmatic ad buying is the de facto method for digital ad t
32、ransactions in European markets.And as digital marketing and advertising dollars surpass other media forms,programmatic in-housing becomes attractive for brands that desire to more closely control their digital advertising strategy and outcomes.Digital Diversification During our interviews with bran
33、ds,one brand marketer sees programmatic in-housing starting with display and expanding to other digital marketing and advertising forms,such as search and social media buys.“Were not just thinking about what all this(in-housing)looks like long-term programmatically,its what does it start to look lik
34、e long-term digital”a brand marketer said.UK and Italian Brands Lead European Programmatic The Ipsos MORI survey of advertisers in five European markets found that seven out of ten UK and Italian brands were currently involved in programmatic ad buying,well above the 65 percent norm across Europe.At
35、 48 percent,German brands registered the lowest programmatic buying engagement rate while Italy and the UK were far above the norm.The German Data Protection Act,considered one of the strictest in the world,has been in effect for decades and may explain 7 why reported programmatic activity is lower
36、in Germany than in other European markets.France,another market with heightened consumer privacy,was about average in terms of brands programmatic activity.Non-Programmatic Brands Planning Evaluation Across the five markets,more than half(53 percent)of brands not currently buying programmatically ar
37、e likely to investigate programmatic transactions within the next 12 months,with the UK slightly above the norm(58 percent).German brands(38 percent)and French brands(46 percent)expressed the lowest rate of interest in exploring programmatic execution,likely reflecting the degree of privacy concerns
38、 in those markets.Conversely,non-programmatic brands in Italy and Spain expressed the strongest intent to pursue programmatic in the future.8 Depth of In-Housing Programmatic Varies A fully autonomous in-house programmatic capability is one where the ad-serving tech stack is owned and/or operated by
39、 the brand and integrated with media strategy,ad operations,optimization,and stewardship all internal functions.When defined in this way,full-bore in-house operations are atypical,given the commitment of time,resources,and expertise required for most companies.For this report,in-housing is defined a
40、s having completely or partially moved programmatic buying functions in-house,keeping in mind that IAB survey respondents may take a more liberal view of qualification criteria for an in-house operation,perhaps focusing more on strategic functions than tech stack,for example.The level of in-house pr
41、ogrammatic engagement runs the gamut from full immersion of functions to hybrid setups that combine both in-house and partners for ad execution.Within the 65 percent of brands reporting to be programmatically active,a significantly large portion,86 percent across all five markets,have either fully o
42、r partially moved programmatic buying functions in-house and plan to continue this course of action.At 88 percent,the UK in-house rate was slightly above the norm.Following provides additional detail on the depth of in-housing:Completely Moved In-House Italian brands(41 percent)and French brands(43
43、percent)were more likely to have fully moved programmatic buying in-house.UK followed closely behind those two countries at 40 percent.Tried but Decided to Outsource Overall,Spain was least likely to set up an in-house operation and more apt to go the outsource route after internal testing:20 percen
44、t of Spanish brands conducted in-housing trials and decided to outsource,nearly double the brand norm across the five markets.Italy was close behind in this regard.No Plans to Bring Programmatic In-House Just 2 percent of brands across the five markets will continue to depend on media agencies and D
45、SPs to execute their programmatic functions.9 Our discussions with marketplace leaders depicted an evolutionary process of in-housing,whereby brands are situated at the crawl,walk,and run stages of development.A brand marketer,for example,will be testing in-housing in one or two markets to decide wh
46、ether they would like to move forward.The test involves these key steps:Internal Business Skill Set Review This assessment was conducted by an independent consultant to identify potential internal capability gaps and how best to fill them.Tech Stack Evaluation This process involves examining existin
47、g data management capabilities,including the types of customer,advertising,and sales data available across internal and external sources,with the goal of achieving“greater control,visibility of whats happening from a media buyers perspective,”according to the brand marketplace leader.Agency Partner
48、Selection One global media agency was chosen for the brand firms business;the process involved an assessment of how the media agency would fit with a future in-housing operation.Another brand marketer,meanwhile,has just passed the 18-month mark for bringing programmatic functions in-house,most notab
49、ly data management and media strategy activities.According to our brand marketplace leader,the first 12 months were spent putting automation in place that supports all of the buying activities,which has now freed up more time for focusing on advertising strategy.Executional tasks such as optimizatio
50、n and stewardship are carried out by media agency partners.The firm has pledged a long-term commitment to developing internal programmatic capabilities as the initiative is part of a larger plan to consolidate and globalize their website,a plan that is folded under the five-year corporate blueprint.
