In his MediaPost piece, Matt Prohaska opines that at least two more holding companies will fold their trading desks back into traditional media teams in 2017. Most industry observers agree that agencies are transforming the trading desk model, but not everyone concedes that all these changes are beneficial. Trading desks have historically benefited agency holding companies as their in-house experts and programmatic revenue centers. Instead of decentralizing trading desks and absorbing them into media and account teams, there is value in further deepening trading desk specialization.
Here are three reasons why trading desks should continue to exist and to thrive.
Planning is not trading
Trading is ultimately an ad operations function -- leveraging ad tech platforms, trafficking, and optimizing to delivery and performance. As such, trading requires a different skillset versus traditional media planning and buying. As agencies move towards absorbing trading into their account and planning teams, they expect to develop generalists who manage publisher relationships on one end of the spectrum and complex programmatic platforms on the other. Expecting both is a folly. It is extremely difficult to find the unicorn candidates that have both sets of skills, as well as the personalities that gravitate towards both planning and platform ops. Instead of combining roles and creating media generalists, there's greater value in continuing to develop trading and programmatic as a specialty.
The need for a programmatic center of excellence
As agencies look to decentralize trading and absorb it into media teams, agencies lose a key, central organization previously tasked with developing deep programmatic expertise. In turn, platforms expertise becomes siloed within each individual account--with trading usually a function of the most junior staff. Organizationally, traders are better off rolling up to a single programmatic unit that develops and refines domain expertise and shares it across the entire team. With a dedicated programmatic group, the organization is also better equipped to identify team members who are naturally good at trading and can grow into seasoned ops leaders for the benefit of both the company and their career.
A programmatic hub is also better for developing vendor relationships. The trading desk model has allowed ad tech platforms to partner with a single group, drive solutions and insights, and ultimately develop savvy traders that support the entire agency.
Better for global clients
Prohaska makes a valid point that clients are best served by in-region support. However, in a model where trading is siloed by account, the prospect of an in-region team being "stranded" and on their own is plain scary. In a decentralized model, each team has limited exposure to different client types and even to different programmatic platforms. For example, a media buyer is likely to have familiarity with platforms that a long-time customer has used for years, but may struggle if they're asked to activate a new customer -- or even the same customer -- on an entirely different platform, given their narrow scope. For regional account teams with scarce staff, a centralized support structure is more important than ever. A centralized programmatic practice allows for more turnkey client onboarding and support, especially so in a global context.
The trading desk is a programmatic center of excellence and value creation within the agency, and absorbing the function into traditional media teams impedes the agencies' ability to differentiate in a competitive market. Instead of folding their trading desks, agencies should continue to grow them. Specialization in complex programmatic platforms allows agencies to develop deep RTB expertise, lose dependency on managed services, and evolve their economic models to better cater to the needs of their advertisers.
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