What is the difference between an ATD, ITD and HTD? And why are ITDs growing fast?

Posted by Anthony Ord on Mar 15, 2017 11:22:49 AM

An agency trading desk (ATD) is a separate business unit within a Media Buying Agency (MBA) or MBA Group that centralises the buying and optimisation of "programmatic" online media. For example; Accuen is the ATD for Omnicom, Xaxis for WPP and Audience on Demand for Vivaki.

The arrival of the ad exchanges (including KPEX) meant the MBAs soon realised they can purchase nearly all online media directly through demand side platforms (DSPs) which are the technology platforms used to manage and optimise programmatic buys.

ATDs are major growth engines for MBAs, who have seen their media buying margins reduced substantially over the past 20 years. By establishing ATDs as a separate business units that marks-up, the MBA can "double-dip":

  1. a) the MBA takes a retail planning & buying fee,

  2. b) the aligned ATD takes another wholesale fee on programmatic.

Note: ad networks historically have always taken high margins so advertisers can still get a better deal with a trading desks.

Independent Trading Desks (ITD) are independent legal entities, like Acquire Online, who are outside the global advertising networks. ITDs are highly agile, employ multiple ad buying platforms and dynamically employ emerging technologies faster than ATDs, who are often locked into technology through Global Group volume supply agreements or ownership.

If the company does not employ multiple ad buying technologies, they are not a “desk” they are generally promoting a single platform solution. Acquire Online does not recommend a single platform solution for any advertiser.

House Trading Desks (HTD) is where the advertiser decides to employ an internal programmatic buying team. Generally, the annual volume of online programmatic spend needs to be excess of $2-3 million for the internal cost to be less than the out sourced costs. The biggest challenge for HTDs is finding, training and retaining the expertise to run the programmatic tech stack similar to a ATD or ITD. Usually, an HTD will default to single platform solution, like Google’s Doubleclick Bid Manager, which can be counter-productive to programmatic optimisation.

From operation & technology perspective. ATDs, ITDs and HTDs are all very similar. All programmatic traders operate on DSP platforms, use data and performance analysis to guide optimisation. Technology wise, some trading desk might have their own technologies to aggregate the reports across DSPs, some even have their own direct bidder to access to the ad exchanges

A recent WFA (US) report found that alternatives to Agency Trading Desks (ATDs) are growing rapidly. ITDs have seen usage increase by 12 percentage points compared to the previous wave of WFA's programmatic research. HTDs, while less likely to the principal global model, are used by more than a fifth of respondents in total. These HTD models were being conducted just at the fringes of WFA's membership two years ago. Underpinning the evolution of digital ad trading models has been a drive to secure additional transparency. The second-generation of programmatic models has seen some improvement in transparency, with 29% of respondents now satisfied with the level of transparency provided by their ATD, up from 21% in 2014. Transparency at ITDs now satisfies nearly half of users, up from 36% in 2014.

 

Topics: Jargons