In his first post in the new Theorem digital issues discussion space, the firm’s vice president of digital strategy, Nick Strauss, says that first, we need to answer some tough questions in order to get the trading-desk move right and then we need to decide what to consider before taking the in-house route.
The trading desk. To build or not to build? That is the question. And sometimes it really does seem as if we face a kind of Hamlet-style dilemma in the digital marketing world when we ask ourselves that Shakespearean question. Chief marketing officers have a number of options they can consider, but if you’ve definitely decided to go the in-house route and build a trading desk, there are a number of issues to explore. And there’s no easy way to choose the right path—as far as most chief marketing and chief revenue officers see it, at least.
You’re all only too familiar with the context: as we’ve moved to a programmatic, data-driven way of working with advertising, all of the buzz has been about what sort of partner a traditional brand needs to hook up with to best exploit this brave new world of math-driven play. There’s been the agency approach, with its clamor around claims they “know” the best way to deliver you the greatest number of eyeballs. And for the past three or four years, we’ve heard from a bunch of great new tech start-ups, each of them coming along in succession with claims they’re building a better cyberspace ad mousetrap: the ideal, can’t-fail tool for finding you the best yield for your outreach efforts.
Well, we think we’re not really in that much of a quandary anymore. The simple fact is that the organization that knows the most about your brand and your data is—your own organization. The market has matured so rapidly that it’s now not that hard for a brand to undertake the endeavor itself—hence the idea of the in-house trading desk, whereby programmatic marketing can get done in tandem with the company’s other brand awareness work and not at arm’s length.
At Theorem, we see a tipping point. More brands are contemplating implementation of a trading desk than are not.
But—and it’s a big but—we’re cautioning our clients to skillfully prepare and meticulously seed the ground before such a move gets made. Otherwise, what if an otherwise pragmatic decision and the best route to delivery of true, one-to-one connection with the audience that matters to you falters because of not getting the right answers to certain fundamental questions first?
Those certain questions fall into four main areas if you’re planning to go the in-house route.
- Are you sure about your ability to execute?
In terms of project management—before you take on such a transformative project:
- What is your vision for data management at your company? What does the one-year version look like? Now show me the three-year plan. (What do you mean, you don’t have one?)
- What are you doing around the taxonomy and behavioral-targeting issues for your proposed trading desk?
- Show me the ad inventory quality management program.
- And then the client service support strategy.
I think those are crucial matters you can’t evade doing right if you’re serious about a homegrown exchange. Next up, evaluate where you are in terms of the company’s internal capability for the move.
- Are you sure you have the resources to do this?
- What are your current capabilities across such functions as information technology, sales, analytics, and marketing; and how should you take advantage of those capabilities?
- What steps have you taken to define the value that can be extracted from investments you’ve made so far in this kind of activity?
- Have you designated an owner to ensure that data coming on to the new trading desk will comply with your existing, defined data hygiene processes?
- How are orders going to get ported into your financial system (over-the-counter?)?
That covers the management and technical sides of your move. Now let’s see where you are on the business side of the equation.
- Are you following the new trading-desk business model?
- Do you have a plan for addressing all of your off-line inventory: TV, radio, newspapers, and magazine properties? (You think you won’t need to plan?)
- Will the proposed trading desk integrate with any other real-time bidding platforms and enable redirects to third- or even fourth-party networks? If not, why not?
- What’s the plan for all of your partner brands or wannabe advertisers that approach the desk with limited, even zero, creative assets?
- What is your data management strategy?
- Will you reinvent the wheel, or will you partner?
And last but certainly not least:
- What’s your differentiation?
- Will the system support real-time ad requests directed to the ad server?
- How will inventory be packaged— and what’s the exact level of flexibility available to buyers within those packages?
- What are the expectations regarding potential acquisitions, pure-play digital properties, and joint ventures in your new internal- ad-platform business case?
It’s possible you could become overwhelmed, because if you don’t enter into this kind of project with a majority of the issues worked out in advance, you are indeed going to struggle.
In fact, I used the word overwhelmed deliberately, because if you think you’re facing challenges around data now, you’re really going to struggle when faced with a hungry ad platform that, too, needs to be serviced. And when that happens, you know what? You’re going to think the prince of Denmark had it pretty easy compared with you.
Next time, I’ll share some thoughts on practical ways of dealing with all this.