Advertisers Prefer to Leave Tech Building to Their Vendors

Advertisers Prefer to Leave Tech Building to Their Vendors

Some programmatic functions work best when outsourced

Ever since digital ad dollars started shifting toward programmatic, advertisers have flirted with the idea of bringing their tech and data operations in-house. While advertisers would like more control over their data management and ad buying contracts, they seem pretty content with leaving ad ops and building technology to their vendors, according to a study by the Interactive Advertising Bureau (IAB) and Advertiser Perceptions.

A survey of 119 US media decision-makers in April 2018 found that just about 30% of respondents preferred to build tech or do ad ops in-house. The other 70% or so said they either work with a partner or would prefer to work with a partner for tech and ad ops.

Building tech and managing ad ops is often expensive, time consuming and difficult to find adequate talent for. Programmatic functions like owning demand-side platform (DSP) contracts, which about half of respondents preferred to keep in-house, don’t take nearly as much investment as the tasks that advertisers want to outsource. The IAB/Advertiser Perceptions report stated that the high rates of outsourcing with tech and ad ops reflect “the need for brands to control for excessive capital expenditures and talent recruitment when establishing in-house capabilities.”

It also specifically examined programmatic functions. Among the entirety of digital advertising, programmatic is often outsourced more than other tasks. In a January 2018 survey of 120 CMOs worldwide by marketing consultancy NewBase, 43% of respondents said they outsource their programmatic efforts. No other marketing function had a higher outsource rate.