A third of agencies in the APAC region own and operate programmatic technology for media buying while a quarter relies on third-party providers. The findings are part of a study by Iponweb and ExchangeWire consisting of 129 respondents working in programmatic media for marketing agencies across APAC, EMEA and North America.
"With Western agencies typically earlier adopters of new technology than those in APAC, it is no surprise a greater proportion own and operate their own programmatic media buying technology, as they have had longer to master the processes," said Hugh Williams, senior data analyst at ExchangeWire. "We would, therefore, expect to see the number of APAC agencies using their own technology for programmatic media buys increase within the next couple of years."
In an ecosystem where advertising agencies are risking commodification on price, the report concluded that the variances across regions with regards to programmatic insourcing had a lot to do with positioning.
"While European agencies are looking to differentiate through their understanding of the programmatic ecosystem, North American agencies are looking to their relationships with publishers, and those in APAC at brand safety and fraud rates," said Williams in the report.
According to Gautham Maediratta, COO of APAC at Mindshare, the prevalence of brand safety and publisher fraud issues in the APAC region are directly proportionate to media CPMs.
"We strongly recommend that any inventory we buy (IO or programmatic) goes live with third-party ad verification and third-party audience verification," said Maediratta. "Given that APAC has a significant supply-skew it is easier to balance scale, quality and value than in other parts of the world.”
The costs of maintenance and costs of set up were cited as the majority of respondents as being the biggest barrier towards widespread programmatic insourcing, including platform complexity, publisher reach, reporting capabilities, and installation issues.
"Rather than writing off building out their own tech stack because of increased costs, the first step for those agencies looking to take more ownership of their programmatic buying technology should be to run a thorough cost-benefit analysis and work out the estimated total cost of ownership," said Williams. "When figuring these out, the improved performance, publisher relations and understanding of the ecosystem, which all make them more attractive to marketers, should be assessed alongside the financial considerations."
Overall, the study found that ownership of programmatic buying technology allowed agencies to, understandably, get closer to the buying process and sources of supply. In doing so, transparency improved and led to the restoration of more client advertising spends towards working media.