Independent trading desks on the rise as clients demand programmatic transparency
Despite agency trading desks remaining the dominant model for programmatic ad buying, advertisers are "demanding a new kind of relationship" that provides "significantly improved control and transparency", according to a report from the World Federation of Advertisers (WFA).
Agency Trading Desks are used as the main approach for programmatic ad buying for nearly 40% of the world's biggest brands, however almost 90% of advertisers say they are "reviewing and resetting" contracts and business models to improve control and transparency.
The consequence of this is the rise of independent trading desks (ITDs), which have seen usage increase by 12 percentage points compared to the previous wave of WFA's programmatic research.
In-house or 'hybrid' models, while less likely to be used, are still employed by more than a fifth of respondents in total. The WFA said such models were only conducted at the "fringes" of its membership just two years ago.
The results of the study are based on a survey of 59 WFA member companies representing 18 industry sectors with a total global ad spend in excess of $70bn. All are spending increasing amounts of money through agency trading desks with an average of 16% of digital ad spend now programmatic, compared to 10% in 2014.
"Programmatic has expanded rapidly and it's no surprise that the market and mechanisms that big brands use to spend through this channel are evolving," said Matt Green, global media & digital marketing lead at the WFA.
"The rise of in-house, hybrid models and independent trading desks demonstrates that the original trading model left much to be desired. The second generation of trading models is now being built and while agency trading desks still take the greatest share of digital spend there are now real alternatives being developed that give brands more control over data and technology alongside the wider push to ensure greater transparency.
"Ultimately, there are advantages and disadvantages for each approach and brands should identify the strategic principles which matter to their businesses, as these will govern partner choices."
The WFA added that the second-generation of programmatic models has seen some improvement in transparency, with 29% of respondents now satisfied with the level of transparency provided by their ATD, up from 21% in 2014. Transparency at ITDs now satisfies nearly half of users, up from 36% in 2014.