Programmatic ad placement accounts for over 80 percent of digital ad spending, a number that’s not likely to drop anytime soon. With so much money on the line, advertisers are and should be making efforts to bring their programmatic in-house, according to a new report by the IAB Data Center of Excellence.

“If brands are going to bring programmatic in-house, they need to understand both the benefits and pitfalls,” said Orchid Richardson, vice president and managing director at the IAB Data Center of Excellence, in a statement. “This research makes it clear that a significant percentage of brands have already moved in this direction—and we can expect that more will follow suit.”

The IAB’s report, entitled “Programmatic In-Housing: Benefits, Challenges and Key Steps to Building Internal Capability,” found that 18 percent of brands have fully in-housed their programmatic media placement, and another 47 percent have at least partially done so. Only 13 percent of brands have started the process and decided against it, and 22 percent have not in-housed and do not plan to.

These findings are in keeping with research by the ANA, which found that 35 percent of brands reduced the role of external agencies for their programmatic needs in 2017, compared to just 14 percent in 2016.

Despite this shift, the IAB doubts that the marketing industry will shift completely in-house anytime soon. Either due to lack of resources to completely in-house or because of special expertise held by third-party agencies, many brands will continue to outsource their programmatic needs for the foreseeable future.

“Brands are either currently working with or considering partnering as a means for executing virtually every programmatic function,” the report reads. “This penchant for collaboration clearly indicates that most marketers prefer to be selective about which in-house capabilities they stand up versus going the full-service route, which would require extensive resources and may disrupt focus on current business operations.”

Brand willingness to go internal for programmatic media placement varies greatly between areas within the ecosystem. According to the IAB, most brands hope to in-house high-level strategic decisions, but they are content to outsource for specialized technology.

“Technology build-outs and ad operations, for example, were two areas with the highest incidence of existing partnership, perhaps reflecting the need for brands to control for excessive capital expenditures and talent recruitment when establishing in-house capabilities,” the report reads. “Data science and algorithm development, as well as education/training, also represent specialty areas where partnership arrangements are either in place or under consideration.”

For campaign analysis and optimization, consensus is much less common, with brands leaning in both directions on whether to go in-house or out.

Motivations for bringing programmatic in-house were primarily fiscal, with 44 percent of the study’s respondents hoping to improve ROI tracking and 34 percent wanting better cost efficiency. Additionally, 44 percent predicted both better audience targeting and more effective campaigns as rewards for bringing programmatic in-house.

“The impact of digital spend, as measured by marketing mix models, began to improve within a year of in-housing digital media spend, driven by enhanced targeting and ongoing placement optimization,” one of the report’s sources claimed.

Brand safety and transparency were major concerns as well, with marketers worrying about unreliable third parties.

“Without the visibility of an agency’s optimization efforts and an understanding of what they’re actually doing, I don’t know that they’re ever doing their best to maximize performance versus to maximize spend at a good performance,” another source claimed.

For brands hoping to in-house their programmatic capabilities, the IAB recommends taking time most of all. According to their research, setting up internal channels can take 12 months, at least.

“First, there must be management support and directive substantiated by an initial feasibility plan to justify in-housing time and resource requirements,” the report reads. “Next, everyone in the organization must come together to achieve plan execution. But there is bound to be some change resistance that’s consistent with human nature as staff members depart from their routine comfort zones.”

The report is based on a survey fielded by the IAB in April of 2018 that queried 119 brand representatives from member companies, comprised of “media decision makers across all titles and 16 major ad categories.”