What Is an Agency Trading Desk?
An agency trading desk (ATD) is a management platform that facilitates programmatic ad buys for clients. ATDs also provide software development, account management, and data analytics services for an agency’s clientele.
Agency trading desk vs. demand-side platform
A demand-side platform (DSP) automatically purchases advertising space for customers. In contrast, agency trading desks provide access to more inventory by using multiple DSPs. A single DSP can reach 70-80% of a specific audience, and using multiple DSPs allows the company to scale the campaign’s reach.
Service received from an agency trading desk is different from that of a DSP. When using a DSP, a company will have an employee, or a team of employees, in charge of managing the business of programmatic and real-time bidding (RTB). Agency trading desks provide an account or campaign manager to assist with campaigns and offer advice.
Another difference between ATDs and DSPs is the price. There is a high minimum to access a DSP platform, which only gives the company a “seat” on the DSP. ATDs cost less because more than one customer is accessing the “seat” to a specific DSP, and the price to access the DSP is shared with other marketing companies.
Advantages of an agency trading desk
ATDs are efficient and offer multiple advantages including:
Domain expertise – Unlike in-house advertisers, the buyers at ATDs have more experience and knowledge in programmatic advertising buying.
Reduced cost – Because ATDs provide their service to a larger number of companies, they can lower the cost of operations including software, training, and operations. ATDs also utilize their technology, which includes data management platforms and ad servers, which help reduce the service’s cost.
Specific campaign data access – This includes data on previous bids, techniques for optimization, bidding models, and campaign response estimation.
Outsourced campaign management – Marketing campaigns are handled by ATDs so brands can focus on other tasks.
Disadvantages of an agency trading desk
Although there are many advantages of an agency trading desk, there are a few disadvantages to be aware of:
- Trading desks often charge 10-20% of the client’s ad revenue.
- The actual cost of media is sometimes kept from the client.
- Parts of the internal operations of the agency trading desk are kept secret.
- There may be little to no gain for the client, even after paying a high amount for an ATD.
Deciding to use an agency trading desk will depend on whether the client is comfortable with in-house media buying or if they are new to the programmatic market and need assistance from those with knowledge of the media buying process. Be aware of the hidden fees and other possible disadvantages that may come with some ATDs. Overall, ATDs have much to offer and can be a viable solution for those just getting started.