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Brand marketers increasingly unsatisfied with agency trading desks

While investment in programmatic advertising is set to rise, it looks like dollars will be increasingly directed towards independent trading desks, and away from agency trading desks, according to findings by a new survey.

The World Federation of Advertisers (WFA) has published a new guideline detailing how brands can get the most from the new programmatic landscape. The report highlights key steps that brands can take to improve the returns they get from investment in digital advertising via programmatic platforms.

Based on responses from 43 of the world’s biggest spending marketers, responsible for annual spend of US$35billion, the survey found that approximately 10% of total digital media investment is now going through programmatic channels, with 44% of that targeted at online display. This is double the scale of investment via programmatic platforms recorded by the WFA’s 2013 member survey.

The survey found WFA members also expect programmatic’s share of their digital budget to continue to grow significantly in the next 12 months with 83% expecting video to grow and 77% predicting rises in mobile activity.

Meanwhile, the use of Agency Trading Desks (ATDs) declined by 15% year on year, while usage of Independent Trading Desks (ITDs) has more than tripled (up from 8% to 30%).

ATDs remain the dominant players however, with 69% of respondents using them (down from 81% last year) and 29% now dealing directly with an independent trading desk or DSP (up from 8%).

However, respondents who were completely satisfied with their ITD fell to 4% down from 20% last year. Meanwhile, no respondents were completely satisfied with their ATD in either 2013 or 2014. Just 2% of respondents have tried or tested an in-house solution, the same figure as in 2013.

The WFA report suggests that brands can ensure their exposure to programmatic is both efficient and effective by taking four clear steps:

  1. The right questions:Ask their Trading Desk partner (Agency or Independent) the right questions to clarify their position in the market and help establish a programme of next steps.
  2. Gaining ownership:Brands need to gain ownership of media investment data and its by products such as audience data and key insights about Return on Investment. The survey found this was a major issue with large advertisers with half of the respondents unhappy with the way data is captured, stored and utilised although ownership of data generated programmatically has been secured by nearly 60% of respondents, a major improvement on the 33% figure from 2013.
  3. Contractual control:They need to take greater contractual control of the technology stack they chose to use, and should consider direct contracts at every step of the chain in order to limit arbitrage and wasted commissions. The survey found that 36% of respondents are now using a Data Management Platform compared to 20% in 2013, for example.
  4. Have a financial investor philosophy:They need to approach programmatic media with a financial investor philosophy; creating a media investment strategy based on understanding of the media asset and the psychology of the other investors.

“Advertisers are taking concrete actions to manage the switch to programmatic and understand this new form of trading. This guidance is designed to continue that process and ensure that WFA members learn from best practice and are able to develop the transparent solutions that digital media buying requires,” said Stephan Loerke (pictured), managing director of the WFA.

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