Adoption of Self-Serve Platform Operation by Advertising Agencies
"Change is the only constant in life."
Heraclitus, a Greek philosopher, declared this universal truth in the 5th century. With the rapid advancement of technology starting in the early 19th century, the overall societal and commercial pace of change only continues to accelerate.
Digital media is in a constant state of disruption due to the persistent advancement and adoption of technology. As the rate of technological change continues to accelerate, the digital media ecosystem is the link of the marketing chain that is most affected, and thus most rapidly evolving.
Inherent industry contexts, including the cost of labor, media value inter-mediation, and pricing arbitrage, position the digital media ecosystem for inevitable and continual disruption by technology and platforms.
With more than 7 trillion digital display ad impressions available in 2016, software platforms have evolved to circumnavigate the vast and fragmented pool of digital media. Automated media execution processes leveraging technology and data, aka programmatic advertising, now power over 65% of digital display media execution.
Performance, control, transparency, and intelligence are a few of the key benefits of running a programmatic platform in-house.
Advertising agencies are currently responsible for choosing and managing marketing and advertising service providers at 83% of companies and selecting technology providers at 71%.
Despite the clear advantages, the majority of agencies are still reluctant to “pull the lever” and fully operate a media execution platform in-house. Many agencies cite real and perceived challenges centered around resources, cost, and risks, but these barriers run in parallel with the actual benefits.
As the initial investment and ongoing operational costs of operating platforms (aka “self-service”) have fallen significantly, the rewards of in-house platform operation now greatly outweigh the risks enabling agencies to capture value, drive performance, and strategically position their businesses for sustainable growth.
There will always be a case for specialization, thus there will never be 100% adoption, but this progression will continue to disintermediate the “media chain”, and those who operate platforms stand to gain the most.
Interested in learning more about programmatic adoption?
Download Choozle’s whitepaper which outlines the history of adoption, disruption of media, benefits of in-house, barriers, and next steps.