Agencies that own their advertising technology have better programmatic performance (IPONWEB research)

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49% of agencies rely on own advertising technology for programmatic media buys
New research from ExchangeWire and IPONWEB indicates ad tech ownership improves agency performance
Nearly half (49%) of all advertising agencies undertake programmatic media buying with their own technology, while 34% combine their own with third-party technology and 17% rely exclusively on third-party offerings.

Agencies in EMEA lead the way, with 58% in the region relying solely on their own technology; this drops to 56% for North American agencies and 33% for those in APAC.

The figures are key findings of new research by ExchangeWire, in association with IPONWEB, which surveyed 129 professionals working in programmatic media at marketing agencies across APAC, EMEA, and North America. It goes on to reveal that agencies that take greater control over their programmatic technology achieve superior performance across a number of key media buying and measurement criteria.

The research report, Agents of Change: The Rise of the Programmatic Media Agency, was undertaken to explore the challenges and opportunities the shift to programmatic media trading is creating for agencies, the impact this has on their relationships with clients and publishers, and how they are leveraging technology to create differentiation and provide new value to partners.

It provides clear evidence of the benefits to agencies of owning and operating their own technology. Asked to rate their performance across a number of programmatic tactics, agencies returned verdicts of very strong as follows:

Programmatic tactic Agencies using their own technology exclusively  Agencies not using their own technology exclusively 
Data activation 50% 31%
Creative optimization 46% 20%
Audience segmentation 41% 20%
Campaign measurement and analytics 50% 18%
Measuring incremental impact of media buys 48% 27%

 

Agency-publisher relationships

The importance of agency-publisher connections was also recognized, with almost two-thirds (63%) of agencies using only their own programmatic media buying technology reporting major improvements in their ability to build relationships with publishers. This compares to 33% of those who do not exclusively use their own programmatic buying technology.

 

Programmatic ecosystem knowledge

In addition, the ability to understand the programmatic ecosystem is a key differential, particularly in EMEA where 51% of all agencies say this is the case compared to 26% in North America and 33% in APAC. Perhaps unsurprisingly, agencies who own their own technology (54%) were more likely to believe that this is a key differential than those that do not (41%).

 

Delivering on targets

Agencies owning their own technology are revealed to be more ambitious when it comes to the targets they have set themselves for the next year. They expect their technology to deliver more, including combatting ad fraud, furthering omni-channel, improving campaign measurement, building customized algorithms for individual client buys and continuing to expand their relationships with publishers.

Discussing the research, Brian Fitzpatrick, General Manager of Demand Solutions at IPONWEB, says: “Agencies that own and therefore control their own technology stack have the competitive edge thanks to better performance across a range of programmatic touch points. Owning technology also gives an agency better visibility of clients’ campaigns, enabling them to drive up ROI.

“Owned technology also gives agencies the transparency across the ad tech supply chain that is increasingly being demanded by clients; as a result, they are better equipped to tackle issues such as the tech tax, ad fraud, viewability, and brand safety.  And, as illustrated by the research, it helps agencies build the all-important links to publishers and inventory.”

 

Cost benefits of technology ownership

Despite the clear benefits of programmatic technology ownership, there are some roadblocks to more agencies taking this route. When evaluating whether to build their own ad tech stack or use a third party, agencies that do not currently exclusively use their own technology cite cost of set up (71%) and cost of maintenance (67%) as the main deterrents. However, these reasons are also revealed as key considerations for agencies that opted to build their own technology, indicating that, with experience of both options, they regard owning their own technology as more cost efficient to using a third party.

Hugh Williams, Senior Data Analyst, at ExchangeWire says: “Committing to any technology ownership is not a decision to be taken lightly. Our research with IPONWEB looks at the intricacies of the ad tech ecosystem from the perspective of delivering strong programmatic performances; it aims to enable agencies to make informed decisions about their modus operandi and subsequent investment.”

 

Note: The research was conducted by ExchangeWire between 4 May and 2 June 2018.

ABOUT IPONWEB

IPONWEB is an industry pioneer and world leader in the engineering and operation of advanced advertising systems for publishers, advertisers, agencies and innovative technology companies. With more than 12 years’ experience driving innovation in programmatic, RTB, and ad tech, IPONWEB is the ‘behind the scenes’ technology provider that many of the world’s leading industry players rely on to successfully power their media and data businesses. Visit www.iponweb.com to learn more.

ABOUT EXCHANGEWIRE

ExchangeWire tracks global data-driven and programmatic advertising, media buying trends, and the ad tech and mar tech sectors. Delving deep into the business of automated media trading and the technology that underpins it across multi-channels (online display, video, mobile and social), the site aims to keep readers up to date on all the latest news and developments.

ExchangeWire provides opinion and analysis on the following sector companies: specialist media buyers, ad traders, ad networks, media agencies, publishers, data exchanges, ad exchanges and specialist ad tech providers in the video, mobile and online display markets. 

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