THE BLOG
12/30/2014 12:37 pm ET Updated Mar 01, 2015

Programmatic Ad Buying: To Ad Agency or Not? That Is the Question

Programmatic advertising has been a term that been around, but a lot of folks still don't fully understand what it means. Most advertisers are sick of hearing about it, because it's something they've understood for so long and has become a buzzword as of late. If you're considering programmatic advertising, there's one big question the c-suite must ask themselves -- ad agency or in-house?

Most businesses have an ad agency or similar business purchase their advertising for them. They pay a premium for that -- usually a 15-17 percent upcharge -- for that medium to be bought. Imagine being able to buy advertising based on hard data, delivering the right ad, to the right person, at the right time. That's what programmatic advertising is. You'll be able to use algorithms and predictable behavior to buy advertising. The model is intended to reduce your advertising costs while giving you more power over where your ads are displayed.

The immediate question c-suite leaders must ask themselves is this: do we bring programmatic ad buying in-house, or continue to use an ad agency? With the ability to do it themselves, ad agencies will have a much tougher time justifying their upcharges to clients.

Then there is the other side of that. A business can ad buy themselves, but they will have to have the expertise in-house, and that may require hiring additional staff if current team members don't fully understand programmatic ad buying. It's all a matter of understanding where your strengths are and where there are opportunities for help.

Fortunately with programmatic ad buying, the data being used allows marketers to advertise smarter. Companies still have the choice to throw millions of dollars behind ad campaigns that target the masses, but the question now is: why? It may have worked in the past, but marketing and advertising is getting smarter and leaner. Companies like Google, AOL, and Starbucks are already in the fold, and media outlets like New York Post and The Wall Street Journal are already setting aside space for premium programmatic ads.

In all fairness, we've seen the word 'programmatic' more and more, given the rise in digital advertising. Now it's a matter of how far programmatic will be able to be expanded beyond what we call traditional online advertising. As programmatic ad buying moves towards the forefront, it's critical that c-suite executives remember that all advertising and marketing requires a human touch, and that programmatic buying isn't an opportunity to automate everything - to fix it and forget it. It's an opportunity to use data to it's fullest while in turn allocating budgets to where they should go -- promoting your product to the right people at the right time.