Can programmatic buying be centralized?

Irrespective of how local we function, we all are operating in a global digital media world. One aspect that has been accompanying us since the emergence of programmatic buying is, “can it be centralized?” Although the question looks much generalized, the answers to this question may vary from customer to customer and will depend upon the business structures.
A review of the global markets for programmatic market stakeholders shows that the service providers’ landscape is more global than local. This holds true for AdExchanges, DSP, DMP, Viewability providers, Brand safety providers etc. Many of them are present in multiple countries and all the relevant continents. On the other hand, many a times the creative agencies, programmatic specialized units operate more on local level than on global level. Even if we look at Media Auditing companies there are few global and many local companies.
Let us look at the decentralized programmatic buying and selling. Majority of the companies in the programmatic buying and selling business, be it advertiser, agencies, publishers and aggregator, they are having decentralized buying or selling approach. Go programmatic global, buy programmatic local, is the Mantra. The programmatic buying or selling control is thus left to the local branches. In case of Publishers, they have all the authority to sell the programmatic inventory, make Private deals or organize private auctions to the local agencies and advertisers.  In case of Programmatic buying, the local agencies are typically buying for their local customers. Obviously international buying is done in each of the local programmatic sales markets but the ratio is still very low.  Thus, one major aspect influencing “Programmatic Buying” is “programmatic sales structure”.
The programmatic operational level delivers us pretty good insights about the standardization. Hence let us have a close look at Programmatic operational level. A lot of issues are internationally standardized, almost no more equivocal terminologies, no homophones and also creative sizes for many common formats are standardized. A lot of effort, guidance and navigation work has been done by IAB, EASA, WFA and other organizations standardizing the global programmatic processes. So being in an environment, where we are moving from “Heterogeneous Programmatic Environment (HPE)” to “Standardized Programmatic Environment (SPE)”, the process of centralizing programmatic buying will certainly take place on large scale in the coming 6-8 years, rather it is inevitable!
Even today, organizing everything centrally is not impossible but it requires “thorough analysis”. Let us look at the key benefits: Centralized Programmatic buying – Pros
  • Programmatic buying in bulk quantities globally reduces cost to the organization. Good relations developed with the global publishers/ aggregators/ sales houses could lead to better discounts, better placements, better quality content environment and optimization flexibility.
  • Transactional costs could be reduced since duplication of the processes is avoidable.
  • Uniform “programmatic buying” policies could be formulated and maintained through centralized handling. This would also lead to comparable data for multiple countries.
  • Centralized briefings, reports and records could be maintained.
  • In many cases, total costs of “Programmatic Buying Management & Development” could be reduced.
Yes, even today it is possible to organize some of the programmatic buying tasks by centralizing them. Theoretically speaking any global advertiser can choose a set of global service providers and centralize the programmatic buying activities in one country of choice. In the first step, streamlining the number of providers used locally & centrally managing open auction buying could be helpful.
Go through the basis check-list before you start working on detailed “Plan for centralizing the programmatic buying activities”. Some of the “key points” are:
  • Try to understand the past & current programmatic buying scope. How do you buy? (Open auction or Private Deals?
  • Analyze “WHAT” do you buy? (Formats, Data, Sites etc.)?
  • Study “WHY and WHEN” do you buy? (Local campaigns, particular events and always-on campaigns).
  • Examine the publisher and site overlapping. Try to identify the “common sales houses/ publishers” across your local markets.
  • Try to identify the “technology and technical” requirements.
  • Figure out your programmatic buying requirements for the next 2 years.
  • Evaluate the current “accounting, taxation and payment” issues i.e. the internal processes.
  • Understand the legal requirements in the countries, where inventory will be bought (especially for tobacco, alcohol, lottery etc. industries).
  • Draft a plan for maintaining the quality of the “central staff”, know-how level and their understanding of “key markets”.
  • Exchange your thoughts with the advertisers already doing it successfully.
Obviously, the list is long and more detailed, once you start working on it. Important is that you invest time to accumulate the data, interpret it, talk with your local subsidiaries, analyze the data and only then you can go deeper. If you are thinking about centralizing the programmatic buying in the next 12 months, start working on it today.