Before we get to the original post about building an agency trading desk you may want an extended version of this blog post updated for 2020, where we go into greater detail about the step by step actions needed to build an agency trading desk.
[2020 Success Guide] Building An Agency Trading Desk
If you run an advertising agency there are substantial opportunities to use programmatic advertising to build up your book of business and protect existing partnerships. Trading desk advertising operations are key to how advertising is transacted.
Below are two considerations for agencies who want to offer programmatic solutions to their clients.
Step 1: Choose An Operating Model
There are two main paths to go when an agency wants to launch a trading desk: forge partnerships or build infrastructure.
The first option for trading desk advertising is to partner with another party such as an existing trading desk, DSP or ad network. They do the heavy lifting and they share profitability. BrillMedia.co does this, along with a slew of industry players including Turn (DSP), Sizmek (ad server / trading desk), Accordant Media (a recently acquired trading desk), Huddled Masses (MediaMath partnered, agency-like trading desk) and Conversant (ad network). There are plenty of others.
The agency doesn’t have to build infrastructure. Just build partnerships. The enterprise generates a new revenue stream. Outwardly facing the agency become a programmatic shop. Managing campaigns rather than operating them means more time to focus on other work and less overhead. There are fewer Master Service Agreements to handle and technologies to master. In fact, all the day to day trading is handled outside of the agency, which is great if you don’t want to invest the resources to learn new tech.
The agency is at the whim of another business. The enterprise doesn’t learn how to buy media through programmatic channels, rather it simply arbitrages media. It does not gain programmatic expertise, probably the most important drawback. As programmatic buying evolves, the partner business learns the newest trading techniques and keeps themselves competitive. The agency simply buys their partners’ services. Finally, the agency continues to place its most valuable assets – client data, campaign insights, learnings, best practices – in the hands of another business.
If the agency has the ability to own, it’s better to own than to rent. The enterprise actually buys media through programmatic channels. In this case BrillMedia.co can help you make smart decisions and partner with the right companies to maximize this opportunity.
The entire agency business benefits from a long list of elements including:
- Daily optimizations and the associated learnings
- Closer look at the media sources and inventory that works
- Forge deeper relationships with programmatic partners
- Understand the inventory, placement, creative and data mix that works for clients today
- Inform current and future campaign strategy
- Uninterrupted view into client performance
- Easy access to inventory that can be turned on and off daily, or intra-day
- Add programmatic data into the agency’s existing data infrastructure
As trading desk advertising media becomes the de-facto way media agencies operate, the agency maintains market knowledge, leadership and a competitive programmatic stance.
The agency has to invest in infrastructure and manage an entirely new media business. Spend money on labor, hire for new skillsets, or train existing employees to learn new skills. Forge agreements with various technology partners, learn new technologies, and keep tabs on the development of the programmatic ecosystem.
Step 2: Determine Staffing Needs
After the operating model is decided Step 2 is about staffing. What is the right combination of traders, product people and account / strategy people that should be deployed? Are some roles combined into a single person? Which group is most important for the enterprise?
Trading is about daily iterative work. Setup campaigns, turn on targeted inventory strategies, pull in data, look at the elements that are working, and optimize. Communicate to internal and external constituents the learnings. Keep track of micro and macro trends that should be applied to business.
Analysts spend their time looking at the data using demand side platforms, data management platforms and internal technologies to identify campaign trends. In the beginning, this work is tied into the trading function. As workload increases, analysts become a separate business role.
Product people think about the specific offering that is being delivered to the marketplace. They meet with programmatic companies, understand capabilities and look for partnership opportunities. A good product person takes inspiration from the marketplace to build product packages to bring to clients.
Account / strategy people handle client relationships and they have a holistic view of client business to ensure that macro needs are being served by the more tactical daily decisions. They see the forest for the trees.
And so, these are the first two steps to consider when an agency wants to launch a trading desk. Other steps include the following, which may happen in tandem:
- Setting the vision for initial launch capabilities
- Finding the right technology partnerships
- Setting strong partnership deal terms
- Ensuring clients are transitioned in a way that ensures success
- Learning and implementing new technologies: Data Management Platforms, Demand Side Platforms, Supply Side Platforms
- Creating business process for trading, internal communications and external communications
- Handling billing
- Ongoing product development
Step 3: Take Action
Which ever path you choose be sure to learn about the marketplace, decipher the unique offerings from potential partners, and develop expertise that is unique to your enterprise. If you need help, let us know.
Robert Brill is Founder and CEO of BrillMedia.co, a hyperlocal marketing agency.
818-720-1632 I [email protected]