Brands Are Swiftly Taking Automated Digital Ad Buying Operations In-House

Financial, CPG Firms Are Leading the Charge, According to Index Exchange

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Brands are taking their automated digital ad buying operations in-house, and they're doing so swiftly, according to billions of ad impressions worth of data pulled from the programmatic ad platform Index Exchange.

In-house spend is the fastest growing category in the programmatic ecosystem, the data shows, beating out spend from agencies, trading desks and tech company managed services, which are all falling in share.

"It's absolutely remarkable," said Index Exchange CEO Andrew Casale, of marketer in-house spend. "It's the only category that hasn't stopped growing."

The movement of programmatic operations in-house will likely be concerning to ad agencies, the traditional stewards of marketers' advertising creative and media operations. Though the prospect of such a movement has received attention in recent months thanks to vocal practitioners such as Netflix, there hasn't been data to prove it was really happening.

Every month, 60 billion ad impressions are purchased through Index, according to Mr. Casale. In-house brand spend grew to 15% of purchases at the end of 2014, from 11% of purchases at the end of 2013. During that time, every other category saw declines in overall percentage share of purchases. Though brand spend is growing in share, an increase in overall spend through the platform means none of the categories are falling in total dollars spent.

The two main categories driving the in-house movement are financial and CPG advertisers, Mr. Casale said. Since Index services only the sell side, it requires buyers provide more information than usual, Mr. Casale said, which is what allows the categorization.

Mr. Casale believes ad buyers are frustrated with ad agencies' approach to programmatic. "It does appear to be partially motivated by transparency," he said of the in-house shift. "The desire to get that much closer to the media and reap the benefits that come with it."

Contributing: Chen Wu

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