In-house and hybrid trading models now used by 84% of respondents

August 20 2020:  Programmatic trading channels for WFA Members account for more than two fifths (41%) of global digital media investment, up from 16% in 2016. Regional splits show the current figure has hit 50% in the US, 31% in Europe and 20% in APAC.

The WFA’s Programmatic, Data & Technology Global Survey 2020 highlights the uneven pace of adoption of programmatic around the globe and the mix of models being used, even in the same company. However, the global trend – this is the fourth time the WFA undertaken this research – is for on-going increases in the use of programmatic channels.

Conducted in partnership with real-time advertising technology and infrastructure company IPONWEB, the results are based on responses from 37 companies, representing approximately $76 billion in annual global marketing investment.

The 2020 report also takes a specific look at APAC, which has lagged the global trend, highlighting the greater use of technology licensing, slower uptake of first-party data and reduced supply chain transparency in the region.

Other significant insights include:

  • Rise in independent trading desks and hybrid trading models

The use of agency trading desks to buy media programmatically has been relatively consistent over the last four years; 74% of respondents currently trade this way compared to 72% in 2016.  But as brands have sought to take greater control and ownership of their buying and data strategies, the use of independent trading desks has risen to 71%, up from 46% in 2016.  Meanwhile 84% use an in-house brand trading desk or hybrid (managed service) model (up from 21% in 2016), although this drops to half for APAC-based respondents, where members were more likely to license their technology from agencies. Many respondents use a combination of approaches across their global footprint.

  • Focus on first-party data strategies

There is a rapid adoption of first-party data strategies as the digital advertising world pivots to being privacy-centric. Seventy-nine per cent of respondents said first-party data was business critical for audience targeting, while audience creation / segmentation and campaign optimisation were both business critical for 63% of respondents.  Despite its importance, first-party data is not yet fully leveraged; while 54% of respondents in APAC said theirs was fully or significantly utilised, globally this dropped to 28%.

  • Supply chain transparency required – but inconsistent

Concern about pricing and data ownership is driving the move to more transparent working as clients reject the concept of agency as principal or inventory reseller; globally, 57% of respondents say they have a ‘disclosed’ operating model with their trading desk, with the APAC figure being 32%.  In 2016, a third of advertisers had a non-disclosed arrangement, but this figure is zero in the current wave of research.

“Advertisers have been on a steep learning curve with the arrival of programmatic but many are now taking greater control of the process through an expanding mix of in-house, hybrid and agency models. Whichever model they choose, transparency of the supply chain is critical so that they can assess which elements are contributing to their business growth and marketing ROI as outlined in the WFA’s Global Media Charter,” said Ranji David, Director, Asia Pacific, Marketing Services at WFA.

“It’s brilliant to see that with APAC’s ever-increasing use of programmatic buying approaches, the conversation amongst brands is shifting from ‘should I use programmatic to how do I use programmatic more effectively?’. Brands pushing for greater transparency and ownership over their supply chain, tech stack and buying models will quickly translate to a stronger industry and better client/agency relationships. While this might sound counterintuitive, what this report communicates to me is that the greater interest around in-housing/hybrid models isn’t at the expense of agency models such as the Agency Trading Desks. Instead, ATDs are evolving with client needs and delivering a service experience that improves how programmatic delivers for our businesses. The WFA Media Forum in APAC has long been committed to improving how brands leverage data-backed media approaches and I look forward to continuing to support the APAC members in this space,” says Silas Lewis-Meilus, Senior Director, APAC Head of Media at GSK and APAC Chair for the Media Forum.

Joe Meehan, General Manager of Global Solutions at IPONWEB says: “The key findings of this research resonate with our own experience, as the programmatic ecosystem evolves and continually recalibrates. In particular, there will be increasing pressure within the industry to deliver transparent supply chains, while data ownership and the relationships between the buy and sell sides will become key to activating brand data strategies. As programmatic continues its global expansion to become the dominant distribution channel for marketing messages, these factors will play an ever-greater role in an advertiser’s ability to deliver superior results, create brand advantage and drive ROI.”

About this study

Fieldwork was conducted by the WFA in Q4 2019 and Q1 2020. 48 individuals from 37 companies took part, representing approximately US$ 76 billion in marketing investment. The intention from the study was to focus on two types of respondents: those with global responsibility for media and programmatic and those with responsibility for the Asia-Pacific region.

IPONWEB contributed to the design of the survey and the interpretation of the results in this report.

About WFA:

The World Federation of Advertisers (WFA) makes marketing better by championing more effective and sustainable marketing communications. It is the voice of marketers worldwide, representing 90% of global marketing communications spend – roughly US$900 billion per annum.

WFA connects the world’s biggest brand owners and national advertiser associations in more than 60 markets, bringing together tens of thousands of brands at local level. Together, they create a global network which offers a unique source of leadership, expertise and inspiration. More information at www.wfanet.org

About IPONWEB:

IPONWEB​ is an industry pioneer and world leader in the engineering and operation of highly customized, real-time media trading systems for publishers, advertisers, agencies and innovative technology companies. With more than 15 years’ experience driving innovation in the ad exchange and real-time technology space, IPONWEB is the ‘behind the scenes’ technology provider that many of the world’s leading industry players rely on to successfully power their media and data businesses. Visit www.iponweb.com​ to learn more.