Deutsche Telekom Utilizes Hybrid Models in Programmatic Ad Strategy

It’s clear that programmatic advertising isn’t going anywhere anytime soon. But precisely what the landscape will look like in the future is a little less clear. The answer may lie in the hybrid model.

Until now, agencies have played a core role in the programmatic buying and selling of digital advertising space, but professional opinion is shifting in this regard. Several concerns, such as media quality, safety, and profit margins are leading businesses throughout the industry to question just how necessary the agency role is as we move through 2019.

An Ongoing Trend

Back in 2017, research from ANA identified that 35% of the companies they surveyed had expanded their in-house programmatic media buying capabilities. This increase of in-house buying was paired with a sympathetic reduction in the use of external agencies, showing that the statistics weren’t the result of increased buying overall, but a rebalancing of the internal/external dichotomy. This was up 14% from the previous year.

Fast forward to 2018 and, according to the World Federation of Advertisers, 45% of researched companies stated their intention to further internalise their programmatic media buying over the coming year.

Now we find ourselves in 2019 and the pattern looks set to continue. While this may seem like the death knell for programmatic agencies, it may not quite be time to go into that good night just yet.

Hybrid Programmatic Models

In order to understand what to expect from the future, it’s important to get a fix on the reasons for this change in programmatic policy.

Many businesses want a greater degree of control over their programmatic media, which they feel can be best achieved by moving away from agencies and bringing things under their own roofs. A high proportion of brands also feel that agencies can be somewhat nebulous and opaque in the way they measure campaigns and don’t believe they necessarily always have the ability or technical capabilities to create accurate reports in this area.

However, there are still a lot of brands who can see the value in agencies, even if that value is found in a slightly diminished role when compared to times gone by. These brands recognise that there are strengths and weaknesses inherent with in-house and agency programmatic buying and want a way to leverage the advantages of each while avoiding the pitfalls.

This is where hybrid models come in.

“For example, a brand may be strong in data management but doesn’t have the talent or knowledge for programmatic optimisation,” said Co-Founder and CEO of Infectious Media, Martin Kelly. “Or a brand might have assembled an optimisation team but doesn’t have the resource or publisher relationships team to support them. Specialist agencies or even consultancies prove their value by delivering individual, modular services that integrate with the advertiser’s own capabilities in a hybrid model. We have worked with Deutsche Telekom in exactly this way, acting as digital transformation consultants within a hybrid arrangement that blends in-house and specialist agency skills.”

As with any business the decision to employ a hybrid model comes from a deep understanding of your brand’s own capabilities. It’s a fact of life that one cannot always do everything oneself. If your boiler breaks down, you call a plumber, but you don’t employ a landscape gardener every time the lawn needs mowing. It’s important to know which jobs your company is equipped to handle in-house and which may benefit from outsourcing to an agency.

Final Thoughts

In the end, it’s all about making the decisions which will give your business the very best chance of success. If you feel an agency can handle part of the programmatic role better than your own people, then start those conversations and find out.

Even big brands such a Deutsche Telekom aren’t afraid to seek the assistance of outside agencies when they feel the company will benefit from the added specialist experience.

“As part of Deutsche Telekom’s recent introduction of an innovative and progressive media operating model across its European footprint, the company has appointed Infectious Media as digital media transformation consultants,” said Head of International Media Management and Digital Transformation for Deutsche Telekom, Gerhard Louw. “Infectious Media will consult on the topics of data and technology strategy and set-up to keep the telecoms giant at the forefront of data-driven advertising.”

Hybrid models are set to be a hot topic at Programmatic Pioneers 2019, to be held in May, at the Twickenham Stadium, London. Please download the agenda today for more information and insights.

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