Benefits of Having an Internal Trading Desk

Benefits of Having an Internal Trading Desk
 

What is a programmatic trading desk, and should your organization consider one? Let's face it; buying advertising is time-consuming, especially if you purchase it manually. Programmatic media buying—a data-based method that uses advanced algorithms and data to determine the best placement—can optimize your resources. 

Indeed, the World Federation of Advertisers (WFA) found that "WFA members are spending 41% of their total digital media investment through programmatic channels" compared to 16% in 2016. Although a demand-side platform (DSP) automates media buying, it limits your inventory to one DSP. That's where a media trading desk can help. 

Trading desk advertising gives companies access to sophisticated, multi-channel technologies, unifying digital advertising, buying media in real-time, and optimizing programmatic advertising methods. But should you choose an agency, independent, or in-house trading desk? Let's look at the types of media trading desks and why many organizations build their own instead of third-party services. 

What is an In-house Trading Desk?

An internal trade desk is a central technology platform that manages programmatic media and buys advertising in real-time. It gives access to all channels from a single location, including paid search, television, native ads, social media, and video. A media trading desk lets you work with multiple DSPs, which can amplify your omnichannel advertising campaign and drastically expand your reach. 

Unlike independent trading desks or an ad agency trading desk, an internal trading desk gives companies control over where their ads are placed. Businesses with in-house programmatic trading desks can maximize their budgets and overcome over-the-top (OTT) advertising challenges. Moreover, working with a media planning and buying agency can inform your strategy, leading to better results and a faster return on investment (ROI). 

3 Types of Media Trading Desks

There are three types of trade desks: agency, independent, and in-house. Each has advantages and weaknesses. Companies like Netflix, Vodaphone, and Lastminute.com use internal trading desks, as it provides greater control over placement and lets them use multiple DSPs. Yet, an internal trading desk isn't a solution for all organizations. 

Campaign US reported on findings by a WFA survey showing that 84% of surveyed companies "were now using either an in-house trading desk or a hybrid "managed service" model," an increase of 63% from 2016. Still, independent and agency trading desks remain the most popular options for companies investing in programmatic media buying because they're less labor and resource intensive.

Here's how the three media trading desk models stack up:

  • Ad agency trading desk: An ATD makes ad buys for their clients. Companies usually have little oversight regarding media inventory and purchasing decisions. The agency handles everything on your behalf. You're paying for professional services and technical, data, and agency fees. 
  • Independent trading desk: An ITD is a standalone service focusing solely on programmatic media, and it isn't part of a large agency. ITDs offer data analysis and campaign management services like an agency trading desk. However, there are also self-service options. 
  • In-house trading desk: An internal trading desk means you own and maintain the infrastructure, providing ultimate control over your first-party data. Building an in-house trading desk requires a larger upfront investment and a skilled workforce. 

 

Choosing a Trading Desk Advertising Solution

If you're ready to manage your programmatic media buys, your next step is deciding what type of solution fits your needs and capabilities. According to the WFA, companies pick a model that helps them improve transparency, data strategy, and ease of control or access. Regardless of the chosen method, WFA recommends "pursuing greater visibility and control…to streamline campaign oversight and gain control of key metrics, investment, and optimization efforts." 

Agency Trading Desk

Among current ATD users in the WFA survey, 60% did so because of the "range and scale of deals on offer." An ad agency trading desk is part of a larger organization with data analysts, software developers, designers, and account managers. It uses internal ad servers and data management platforms, so there isn't any infrastructure required on your end. 

The agency handles your campaigns from end to end, freeing up your time to focus on business-critical tasks. But, you may have less control over purchased media. Additionally, some organizations are wary of the lack of transparency around agency trading desk fees and media markup. 

Independent Trading Desk

Transparency is why many organizations use independent trading desk solutions, with 92% of respondents to WFA's survey saying it's their most important criterion. Unlike an ATD, an independent trading desk specializes in programmatic marketing, and it isn't part of a larger advertising agency. 

You still get the benefits of an ad tech partner like campaign management and data analytics. And you can choose to manage your campaigns or take a completely hands-off approach. 

In-House Trading Desk

Improved transparency and data strategy are key reasons why WFA respondents chose an in-house trading desk. Undoubtedly, in-house trading desk operations provide full access to your data. You have more control over your media buying decisions and can maximize your digital ad space budget.

At the same time, companies with in-house programmatic trading desks can use a lot of resources to accomplish their goals. Therefore, it's essential to consider several factors before building an internal trade desk, such as your ability to execute, available resources, and your trading desk model. 

Benefits of Using an Internal Trading Desk

The advantages of using an in-house trade desk are vast. As WFA mentioned, internal trade desk users do so for increased transparency, data strategy, and ease of control or access. You'll eliminate the costs of paying a percentage of your ad buys. There aren't any hidden or unexpected costs. And your organization has total control over your spending. 

An internal trading desk gives you access to multiple DSPs, allowing you to extend your reach and view your omnichannel performance from a single platform. With an internal trade desk and optimized digital advertising strategy, it's possible to improve your ad performance and maintain total visibility. You'll have complete control over your data and not rely on a third party to share log-level data.

Optimize Your In-house Programmatic Buying Methods

Ready to enhance your OTT marketing strategy? Retain control over your data by building an internal trading desk and working with an ad tech partner to maximize your budget and reach. Contact MNI to learn more about programmatic advertising. 


 

About the Author
@Janine Pollack is the Integrated Marketing Director, and self-appointed Storyteller in Chief at MNI Targeted Media. She leads the brand’s commitment to generating content that informs and inspires. Her scope of work includes strategy and development for Fortune Knowledge Group’s thought leadership programs and launching Fortune’s The Most Powerful Woman podcast. She is proud to have partnered with The Hebrew University on the inaugural Nexus: Israel program, featuring worldwide luminaries. Janine has also written lifetime achievements for Sports Business Journal. She earned her masters from the Northwestern University Medill School of Journalism and B.A. from The American University in Washington D.C.