Today's marketers have been expert jugglers. In addition to managing issues of ad fraud, viewability, and global marketing strategy, it is now common practice for a marketing team to also manage ad campaigns across multiple platforms and devices.
But with only 24 hours in a day and finite team resources available, it's no wonder that some marketers have begun to outsource much of the marketing technology (martech) juggling.
The move toward managed services is causing new pressures of its own. A quarter of senior marketers say they are stretched too thin because of having to manage multiple marketing tech vendors and platforms, according to "Modernizing the Mix: Transforming Marketing Through Technology and Analytics," a May 2016 research report by my company, DataXu.
Apparently, marketers have had to graduate from juggling to plate-spinning.
A growing number of marketers believe that bringing advertising technology (adtech) and martech solutions in-house is the way to improved cost-effectiveness, transparency, and access to data. Our report finds that 62% of US marketers expect to manage slightly more or significantly more martech in-house over the next year.
And with many marketers happily managing at least a portion of marketing technologies in-house already, the next question is a straightforward one: Will adtech move in-house next?
The In-House Adtech Mindset
Some 53% of US marketers say martech and adtech will converge completely within the next five years, according to our survey of 532 global marketers. The melding of the two under the overarching umbrella of "madtech" may thus lead to adtech's being brought in-house as well.
In fact, over half of global marketers we surveyed report that in-house teams are experimenting with managing adtech. However, like every large-scale organizational change, moving adtech in-house comes with pros and cons.
There are three perceived advantages to moving adtech in-house:
- Cost efficiencies through disintermediation. Cutting out a managed services team or fees paid to an ad network can instinctively feel like a sensible step.
- Increased transparency. Bringing adtech in-house ensures an agency or brand team has direct access to all platform information, from inventory data to customer segment data and targeting tactics.
- Full control. In-house teams gain full control over all optimizations and become responsible for the performance of all advertising campaigns.
However, marketers may face an uphill battle to successfully build in-house teams that are "adtech-ready." Among the challenges associated with moving ad-tech in-house are these:
- Lack of advanced technical skills. Adtech and martech require different skills. The technical knowledge required to manage ad servers or run a trading platform is highly specialized. In our survey, many marketers expressed worry over being able to find qualified talent or to upskill themselves quickly enough to add value in technical areas when considering managing martech and adtech in-house.
- Major up-front investment. Although tech partner services come with a fee, the up-front costs of bringing adtech solutions in-house are extensive. Personnel, tech, and training—as well as media dollars—must all be worked into an in-house budget.
- One less plate does not always equal one less problem. Marketers seeking to spin one less plate by bringing adtech in-house may find themselves breaking that plate in frustration when they realize the level of difficulty and time required to produce optimal results when running these technologies themselves.
Understanding the 'Tech' in 'Adtech'
As the K2/ANA 2016 transparency report revealed, many US marketers have traditionally left all tech platform decisions to their agencies. However, certain agencies may find themselves juggling competing client and holding company interests as a result of being the sole decision-maker for preferred technology solutions. Marketers therefore need to build up enough technical chops to assess tech platforms in partnership with their agency (or by themselves), make decisions based on objective test performance, and ultimately assign agency staff to run the chosen platform if they so desire.
Modern marketers acknowledge that it's time to move understanding martech and adtech to the very top of their priority list. Fully 78% of US marketers say understanding marketing technology is a critically important skill for successful senior marketers (even if adtech isn't being brought in-house), per our survey results. Without at least some technical know-how behind platform decisions, marketers risk taking a shot in the dark by directing agency partners towars certain solutions.
Technology partners as well as media agencies have starring roles to play within the adtech ecosystem of the future, no matter which direction the in-house wind blows. If there is an industrywide shift toward fully in-house adtech, technology partners' and agencies' roles will evolve from doers to facilitators. Tech vendors will repackage their software as white label offerings, rather than managed services, to save agencies the hassle and cost of trying to develop tech from scratch themselves.
Ultimately, the move to bring adtech in-house can be viewed as a reaction to the high-pressure, high-stakes environment marketers now find themselves in. Bringing adtech in-house may be beneficial for certain organizations, but it will not be viable for all organizations.
Marketers who possess a baseline of technical knowledge will be well-positioned to determine whether the shift to an in-house model is a move their company is ready to—and should—make.
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