In 2013, marketers were investing substantial capital to build their core audiences. That often meant collecting data from agencies, in-house metrics, marketing analytics companies, and the social web, then analyzing it before deciding where to invest the next marketing dollar.
At the time, those methods were being augmented by agency trading desks and advertising platforms that combined marketers’ first-party data with additional data sets to refine audience targeting. Agencies were increasingly turning to platforms to manage mismatched and incomplete data sets and help marketers reach audiences in a programmatic landscape.
If you were considering the trading-desk model in 2013, you were not alone. OpenX research cited in the original article reported that 71% of surveyed publishers and buyers traded ads programmatically, while many respondents expected double-digit revenue growth that year.
The interest was understandable: manually working through multiple data sets was tedious, time-consuming, and difficult to scale as advertising data grew. The right ad-tech partner could combine social conversations, predictive algorithms, and display-performance metrics into a broader view of behavior across desktop and mobile platforms. Combined with a brand’s existing data, that information could uncover audiences, improve future campaigns, and identify customer intent.
With so much at stake, marketers had real pros and cons to weigh when choosing a partner. These were the factors I believed deserved attention before moving forward with a trading desk.
Agency Trading Desk Pros:
Better Targeting. Agency trading desks can target people, matching certain criteria on a one-to-one basis, rather than taking the traditional approach of packaged impressions. Agencies create a list of attributes that define the desired audience behavior and then partner with a DSP that has algorithmic bidding capabilities to match inventory with audience attributes.
Better Insights. Trading desks can provide deeper data analysis to reveal more insights that can contribute to the effectiveness and efficiency of the ad buy, combining online and offline marketing initiatives.
Better Integration. Working with agency trading desks at one’s digital media agency offers more avenues for collaboration and seamless integration of services.
Agency Trading Desk Cons:
Conflict of Interest. Agency trading desks act simultaneously as both agent and vendor, which may cause issues that would otherwise be resolved with two-party involvement.
Lack of Transparency. Clients have little insight into the actual process of buying and selling and place extreme trust in agency trading desks. In many cases, clients may not even be aware that their digital ad buys are being executed via trading desks.
Double Charges. Skeptics of the trading desk model have voiced concern that they are paying their agencies to manage media and then paying them again for the agency-relating services offered by trading desks.
Media Mark-Ups. An agency trading desk may buy media at their own risk and then resell that media to clients at a premium. Due to the conflict of interest, there are concerns about the trading desk also functioning as the client’s agent.
Internal Mandates. Some agencies and holding companies mandate that all network-based transactions can only be executed through their internal agency trading desks. That raises the question: Are media agencies selecting the trading desk option because it represents the best option for a client, or because it is owned by their parent companies?
The decision was never simply trading desk versus direct programmatic partner. The real test was whether a partner could explain how media was bought, what it cost, where conflicts existed, and how the resulting data would improve the next campaign. Whatever model you chose, transparency and control had to come before convenience.
