Our previous article in this series outlined the three ways agencies can add programmatic advertising services within their organization to increase revenue: by in-housing, outsourcing to an ad tech vendor, or partnering with an agency that specializes in programmatic advertising services. Each option has its own unique benefits and drawbacks for agencies to consider, but as we concluded, we recommend partnering with an agency that specializes in programmatic to get your service offering up and running as quickly as possible without having to add headcount.
After finding the right programmatic advertising partner, how should an agency go about getting their new programmatic advertising services up and running for their clients? And what exactly does that process entail?
While it varies from agency to agency depending on an organization’s size, number of clients, turnaround time on sign-offs, and complexity of ad campaigns to be executed, we provide our partners with the following guidelines—noting that when there’s a high level of engagement from both teams, things can also move faster. Below, we outline everything you need to know about adding programmatic advertising to your agency’s service list, including a programmatic onboarding timeline, pricing options, and the different ways you can choose to handle client relationships with a partner.
Working With a Programmatic Partner
The onboarding process with your programmatic service provider will look a little different depending on whether you plan to manage the client relationship yourself or refer your clients directly to your partner.
For those who choose to manage the relationship, they can either let their clients know about the programmatic partner or keep that partner “behind the curtain.” Benefits of the latter include consistency for your clients, ability to manage your agency’s relationship with that client from end to end and being able to maintain the look and feel of a full-service agency (if that description applies to you). On the other hand, this may require more work from your team and multiple layers of interaction in order to answer any client questions.
For agencies that choose to refer their clients directly to a programmatic partner, benefits include less work for your team, a clear client understanding of who is managing each element of their marketing strategy, and the ability for your agency to bring in passive income without expending additional internal resources. The main drawback is that some clients do prefer working with a single agency of record and may not wish to manage multiple agency relationships themselves.
In general, we find that large and established agencies (especially full-services ones) with long-standing client relationships and a full staff of account managers tend to prefer managing their own client relationships. About fifty percent prefer to maintain the appearance of managing their clients’ programmatic campaigns themselves; the rest generally have no hesitation with letting their clients know that their programmatic campaign management is being handled by a trusted partner. In our experience, the clients themselves tend to be satisfied with either setup.
Direct referrals tend to work best for agencies with smaller teams and a lot of work to manage already, or for any clients requiring a particularly quick turnaround on campaign setup, launch, and reporting. In these situations, your agency is able to generate a dependable revenue stream without expending internal resources, which makes this an attractive option to many of our partners. It also allows agencies with a particular niche or specialty to focus their time and energy on those particular services rather than trying to be all things to all clients.
That said, either model can work well for any kind of agency, and a hybrid model can also work, with agencies managing some relationships themselves while referring other clients directly to a partner.
The Programmatic Onboarding Process
For those agencies that refer their clients directly to a partner, getting this revenue stream up and running can be as easy as talking through some initial qualification questions, signing a referral agreement, and introducing your first client(s) to your partner. From there, you’ll begin earning referral fees with no additional effort, and some agencies prefer to take this very hands-off approach to adding programmatic advertising services to their repertoire.
That said, most partners that refer clients directly to our team still take the time to check in with those clients and with our team from time to time, and we encourage partners to do so whenever possible. Particularly when our partners offer complementary marketing services, these check-ins help ensure that value is maximized for everyone involved. For example, a creative agency referring their clients to a partner for programmatic advertising may still be designing the ads used in market and will benefit from understanding which creative is performing best in terms of engagement metrics, conversion rates, and so on.
Beyond these hands-off referral agreements, any onboarding process that involves both agency partners as well as a shared client will take at least a few weeks to complete—but rest assured that it’s much easier than attempting to take programmatic in-house.
While programmatic agencies vary widely, any specialist agency worth its salt should have a highly organized and detail-oriented onboarding process. For our own, we use technology to sequence and streamline each step, and help new agencies ramp up their programmatic service offerings quickly with a combination of pre-sale support, hands-on training, a wide variety of templates, and customized white-label reporting.
This process will operate in a similar way regardless of how you work with your programmatic partner—if you manage the relationship, all stages will go through your agency, otherwise all stages will go through your client, but the final outcomes will be the same. The five main steps of the onboarding process generally proceed as follow:
- Discovery call: Your agency partner will schedule a meeting to discuss campaign goals and shape strategic direction.
- Media plan presentation: They’ll then develop a data-driven media plan for your team’s review, feedback, and approval.
- Client approval: Once the media plan has been approved, a Digital Insertion Order (IO) will be sent for signature.
- Campaign setup: This step begins after approval of the media plan and signature of the IO, and generally takes 7–10 business days.
- Campaign launch and reporting: After launching the campaign, a 24/7 reporting dashboard will be made available and ongoing campaign optimizations will begin. (Dashboards can be white-labeled with your agency’s or client’s logo and color scheme).
On average, this entire process tends to take about three to four weeks to complete, but as noted above, it can be finished sooner depending on your team’s and client’s ability to provide quick turnaround on media plan approval, IO signature, and so on.
Pricing & ROI for Programmatic Advertising Services
For partners who refer clients to a programmatic partner directly, receiving a referral fee of about 10-20% of the monthly management fee with the client is customary in return.
For agencies who manage their client relationships themselves, a standard management fee paid to a programmatic partner starts around 20% of the campaign’s total media budget. This price includes all campaign management services, ad tech integrations, and reporting. We encourage your team to ask potential programmatic partner agencies if they offer tier-based pricing with incentives for lower management fees based on total media spend. At PrograMetrix, we tier our pricing at specific media spend thresholds and lower our management fee percentage as our agency partners invest more media dollars across their client base. Our agency partners are able to pool media spend across multiple clients to achieve price discounts and other incentives within the partnership.
A one-time setup fee is generally also charged based on the scope of campaign setup work, with more channels and ad tech platforms under management leading to a higher fee. Finally, minimum spend requirements are standard: At PrograMetrix, for instance, clients generally need to have a minimum budget of $10,000 per month to be successful with programmatic advertising, so this constitutes our minimum spend. If additional media services are required by the client, such as paid search and/or paid social campaign management in addition to programmatic, there is a $20,000 per month ad spend minimum. Minimum spend can vary from agency to agency, but keep in mind that the lower the monthly spend, the less likely your clients will be able to achieve their desired results.
In return, what can an agency expect in terms of revenue growth by partnering with a specialist to offer programmatic advertising? It depends on the agency’s existing client base, but to provide an anecdotal example, we partnered with a boutique creative agency based out of Austin, Texas that was able to grow their average revenue per client and start signing more six-figure deals than they ever had before after adding programmatic as a service. These real business outcomes were achieved in less than six months from launching our partnership.
In the next blog post of our series, we’ll provide an overview of the advertising technology ecosystem and discuss which ad tech tools your agency needs and how much it costs.
At PrograMetrix, we specialize in programmatic so you don’t have to. To learn more about how we partner with agencies to provide programmatic advertising services, check out our eBook or get in touch here.