Netflix Does Programmatic In-House Because They Can
- by Tyler Loechner @mp_tyler, May 20, 2015
Speaking at OMMA
Programmatic Display at Internet Week New York, Kathy O’Dowd, global director of programmatic marketplace and channel development at Netflix, explained why the on-demand streaming video provider
does its programmatic buying in-house.
“Transparency, control, agility,” she said, adding “[and] a way to act on findings quickly; act on brand.”
In a phrase, offered interviewer Joe Mandese, MediaPost’s editor-in-chief: "Marketing intelligence."
Another speaker -- Josh Cohen, programmatic product manager at the New York Times -- jumped in to suggest that Netflix is “one of the few that can [bring it in-house] because of the dataset they are sitting on top of.”
O’Dowd agreed. “It takes a lot of work to do [in-house programmatic] well,” she said.
Some other large brands such as P&G and Kellogg's can pull it off as well because they are "huge companies with big budgets," but for brands that don't have Netflix-like data or P&G-like budgets, taking the tech in-house is harder to pull off.
"That’s where a lot of agencies bring value --for clients that just can’t support that type of team," O'Dowd offered.
Many years ago I learned a hard lesson when working on the client side for a Fortune 200 retailer...just because you can go in-house, doesn't mean that you should go in-house.
Transparency, control and agility can all be acheived when you select the right agency and negotiate the terms of how you would like to work with the agency. While not every agency willl agree to those terms, many agencies do provide full transparency, shared control of campaign management and are often much more agile in execution. So what O'Dowd points out are not necessarily advantages of doing in-house, but more likely the bi-product of poor agency selection conducted by Netflix in their past.
The drawbacks of doing in-house can often exceed those "perceived" advantages Netflix holds in their mind. One thing that is guaranteed when doing in-house...you lose the advantage of agency learnings. Agencies see performance across a range of clients, not just one silo. They take those learnings they uncover on one client and then carry over to another. By choosing to go in-house, the advertiser loses access to the learnings of other advertisers the agency has gathered. Netflix, on the otherhand, chose to placed their trust in an account manager with no marketing experience that is two years out of college whom was hired to babysit a DSP technology. Just a quick review of LinkedIn will validate that opinion on DSP staffing.
And if transparency is truly the #1 priority for Netflix, the best DSP in the industry for data and performance transparency is The Trade Desk. Only problem...their business model is that they only work with Agencies.
It is a big commitment to insource, but plenty of benefits for those with the grit, time, and resources. While at Oracle Data Cloud Summit the global lead for Dell's marketing technology platforms stated it was a four year endevour to get the various ad tech components and processes aligned. Lots of testing and learning along the way.