Perhaps one of the more taboo topics of discussion amongst us agency folk is the threat that brands will one day buy all their digital media without us. I have encountered a certain amount of defensiveness over the years from peers unwilling to accept that this trend might play out. For the purposes of this article I will try my best to remain unbiased and present both viewpoints. The first being that brands will indeed bring more of their media buying capabilities in house and require the services of agencies less. The second that digital media planning and buying is a complex and specialist service that only agencies can provide.
Let’s look at some of the trends first. 45% of brands are now buying their paid search in house, up from 38% in 2008 55% of brands do their SEO exclusively in house and a massive 70% of brands manage their social media by themselves (Econsultancy UK Search Engine Marketing Benchmarking Report 2012, May 2012). Some of the biggest brands in the US (i.e. Experian) now handle all their display media buying without an agency. I myself have worked with many brands showing an appetite to buy media themselves.
Are the advancements in technology influencing this change? More and more media inventory can be purchased through self-service platforms. This is bringing the advertiser closer to the media source than ever before. Google has made in-house media buying too easy by removing the buying power element and providing one common global platform to buy on. Display too is being democratized in the same way. Through one DSP I can access inventory across a multitude of ad exchanges at the touch of a button. With Facebook owning 30% of display inventory and now flirting with ad exchanges one could pretty much cover the entire online population through 3 buying platforms. In this world of ‘plug and play’ what’s to stop savvy brands from doing it themselves? All they need is the relationship with the technology vendor, some smart in house traders and some occasional consultancy to keep them on the right path.
On the flip side of this there are many barriers for advertisers to bring everything in house. The challenge with display in particular has always been fragmentation and complexity. DSPs and ‘plug and play’ solutions are not the right approach for all brands. The truth be told many agencies struggle to make a margin from display media buying. More complex services like rich media tracking and implementation, dynamic creative testing and ad serving, attribution and measurement, coupled with the more mundane yet necessary components that include faxing IOs, billing and reconciliation, trafficking (I could go on and on) are all massive deterrents to brands thinking about going it alone. If agencies struggle to make a margin why would a brand want to take it on alone? There’s also the other challenge of finding talent in such a niche market, hiring good digital planners is very difficult, even in the US where the market is more mature. I don’t think these complexities are going away any time soon. We’re a long way off from having a single media trading and work flow platform. Until then many brands won’t want the headache of exclusive in house digital media buying.
In the future I think it’s very realistic that more brands will bring all their digital media buying in house. The trends speak for themselves. The agencies that will thrive will have more to offer than smart people and buying power; brands will always want incredible technology and useful data. Agencies will have to adapt to this and provide something more proprietary and bespoke. The next few years are going to be very interesting for us agency folk.
