Small agencies wary of programmatic

Posted by Warc News on 11 March 2014

NEW YORK: Major agencies have embraced programmatic buying, but almost all small and mid-tier shops have yet to commit themselves fully to the process, new research has suggested.

A survey of 75 smaller and mid-tier agency executives by Strata, the agency data processing and software developer, found that 94% of this group, which forms the core of Strata's clientele, did not trust buying media in this way.

Despite that, only 46% said they did not actually use programmatic buying, while 37% declared themselves undecided.

But Joy Baer, executive vice president and COO of Strata, told MediaPost that some clients could be using programmatic buying without realising as there was some confusion over what was included. She cited the examples of paid search or Google display as the sort of activity that could fall into this category.

Over half of Strata's survey (58%) did not believe there was a "unified" industry definition for the term.

Greater transparency could help attract skeptical agencies, suggested Brian Fitzpatrick, managing director of Adap.tv in Europe. He told the Guardian that "if you want to get inventory that's fully transparent, viewable and with no fraud, you simply go into the sites you want and you buy them".

And he warned that agencies could not afford to ignore the issue of fraud. If they did "their clients will push back and there will be trust issue," he said.

Whatever agencies may think of programmatic, advertisers themselves are increasingly keen to get involved. Video ad tech firm YuMe has just launched a programmatic solution – Video Reach – in response to customer demands.

"What made us decide to engage in programmatic was that we increasingly heard customers say they would like to get some of the programmatic trading desk capabilities that they're putting in place with their agencies," Ed Haslam, a senior vice president at YuMe, told Ad Exchanger.

Baer accepted that smaller agencies were less likely to be leading the charge in groundbreaking developments such as programmatic but added that they could still influence the marketplace. She estimated that smaller agencies utilizing Strata systems represented about 30% of total media spending.

Data sourced from MediaPost, Guardian, Ad Exchanger; additional content by Warc staff

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