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Increasingly, brands are working to forge direct contracts with their ad-tech partners, a relationship traditionally managed by their agency.
While brands in-housing programmatic capabilities have been going on for years, owning the direct contract is an increasingly in-vogue tactic to gain oversight of the programmatic supply chain and more control of campaign data. But it’s easier said than done.
Momentum is growing around direct contracts. The recent Association of National Advertisers (ANA) survey found more than 70% of brand marketers plan to own direct contracts with demand-side platforms (DSPs) and ad verification providers, respectively, over the next year, if they do not have direct contracts already.
Media consultancy MediaSense has seen approximately a 20% increase in clients owning ad-tech contracts in the past two to three years, said managing partner of strategy Ryan Kangisser.
“By having that direct seat with the DSPs there can’t be any mark-ups or bid shading,” said Rick Corteville, executive lead at Lenovo’s media center of excellence. The company in-housed the contract with its ad server AdForum earlier this year and is finalizing direct contracts with multiple DSPs and a clean room provider as part of a broader strategy to manage more programmatic buying directly.
“With AdForum, if we have the direct contract, … we own the data,” Corteville added.
But not all practitioners agree that direct contracts are the best way to avoid waste in the programmatic supply chain, where only 36 cents of every ad dollar reaches the end user, the ANA report found. Owning direct contracts can be too complex for many brands, resulting in a lag in in-housing and many brands letting their agencies manage programmatic media buying.
The ANA study found 52% of the 67 brand respondents owned direct DSP data access via their contracts. Advertisers without these contracts had more trouble participating in the study’s audit of programmatic inefficiency because it was harder to access their campaign data.
The trade body recommends more brands own the contracts with their ad-tech providers, especially DSPs, to gain access to crucial data and to hold ad-tech partners accountable. One consumer packaged goods (CPG) company saw a 47% improvement in CPM efficiencies and a 37% boost in reach after in-housing its DSP contracts, per the report.
