How to Start Your Own Programmatic Media Agency with $5,000

A programmatic agency sounds like luxury. Costs of building a proprietary demand-side platform soar to millions, let alone routine budgets for maintenance. Is this headline clickbait, then? Well, $5,000 is enough to start a DSP business if you white-label.

Brands seek new traffic sources to close their demands while giants like Google and Facebook expose their gaps for non-trivial media buying cases. Often, they end up at the virtual Zoom door of an advertising agency like yours.

You reveal their hunger for a fresh audience and delicious conversion rates on the demo call. It seems you are here to provide, but too many “hows” are running through your head:

How do you build the tech needed to buy oRTB traffic? How to find the right traffic for your niche? How to buy and sell it at the best margin? How to let your clients bid on your supply alone? How to optimize their ad spend, etc.

So how? The answer on how to start a programmatic advertising agency and keep it afloat is below.

Intro to a Programmatic Agency Business Model

A programmatic advertising agency business model is narrower than an all-around digital ad agency.

First, it offers only programmatic advertising services to its clients.

Second, the platforms they use to run campaigns are independent and do not belong to social networks or walled gardens, aka Google.

Third, it means they are using programmatic buying platforms to run their campaigns. These tools, aka demand-side platforms, automate the buying process with a real-time bidding protocol.

Summing up, a programmatic advertising agency focuses solely on buying traffic on independent websites and apps, bypassing social media, PPC, etc., and uses a demand-side platform on its technical side.

An all-around digital agency may use many tools and channels at the same time.

Why is There a Demand for MORE Programmatic Advertising Agencies?

Now, programmatic makes up 84% of all digital display advertising spend, and it’s projected to grow by 87% in the next three years. Right now, the global programmatic advertising market is valued at $47.47B and will rise by 1,883.4 billion by 2035.

This not only means it’s not too late to catch the wave, it actually means today is just the right time.

The purpose of the programmatic agency? Brands turn to them because they don’t want to hire an in-house team and allocate resources to strategy development. They need a trusted partner who will spend their budget on effective ad placement.

Also, programmatic advertising is a complex field with a steep learning curve. It requires expertise with ad tech platforms, data analysis, and ever-changing ad regulations.

Programmatic advertising agencies are intended to have this expertise, deal with the advertising budgets effectively, manage ad inventory, and provide transparent reporting, while brands focus on their core business operations.

As for you, money makers, running a programmatic agency means you will spend the client’s budget wisely, reselling the traffic at a margin. For that, you need an in-house demand-side platform, where you will be setting these markups.

Having doubts? That's natural, if you look at the current industry trends and confusion regarding programmatic advertising strategies.

You see, the current relationship between the agency and the brand lacks transparency and a personalized approach. Moreover, the digital advertising chain is often sabotaged by ad fraud, rapid shifts in consumer behaviour, and the absence of detailed analytics.

In short, brands often feel overcharged, don't get relevant customers, and simply do not know where their money really goes.

Thus, even now, there is room to enter the playground with customization, better performance measurement, adequate programmatic reporting and openness in mind.

All this is possible even on a budget if you apply coherent digital strategies and follow the steps below.

Step #1: Define Your Niche in Digital Marketing and Find Your First Clients

So, if you’re wondering how to start a programmatic agency from scratch, we’d strongly recommend you acquire specialization first. The landscape here is no less competitive than a League of Legends match, so it will be best to narrow down your niche first and expand your offerings later.

What Can Be the Niche for a Programmatic Advertising Agency?

It’s smart to base your strategy around a specific advertising vertical, programmatic channel, or ad format. Let me cite some examples.

In the case of the vertical programmatic advertising company, you decide on the industry brands you will target to operate in. It can be retail, e-commerce, gaming, etc.

Also, look more closely at niches pushed away by Google & Facebook, like crypto, betting, or dating — they’re especially starving for quality traffic and reliable partners who will help them gain prominence in their niche.

Programmatic channels are regular web, in-app, connected TV, trending programmatic advertising, audio, and digital out of home. Establishing yourself as a DOOH programmatic agency sounds much more intriguing, huh?

At last, differentiation by ad formats implies that among dozens like digital out of home, connected TV, or native advertising, you focus on just one. You can say you only deliver clicks with push and pop ads or drive installs with mobile playables and interstitials.

Recalling we only have $5,000 to start, the best way to define your business niche quickly is to shake the ground you’re standing on in the programmatic media buying game.

Check out your current experience and professional network: your first clients may hang around there, and you may secure your first case study right now, even before registering a company.

However, don’t turn this first step into a trap. Ex-big-agency employees created many leading programmatic advertising agencies. These ad agencies have started as one-client agencies.

They enticed one client from their previous workplace to work with them after they resigned from their job in the larger agency. What’s worse, they built their tech stacks around the needs of that one client, their programmatic strategies, and their ad space.

Remember: the client who’s easy to draw is not the only one to come. Yet, if the clients you might have by word-of-mouth match your expertise, you can base your niche on their needs and start looking for similar brands with success cases at your fingertips.

If word-of-mouth doesn’t work, contact your potential niche clients on LinkedIn. Research how their brands might benefit from programmatic technology, convey its value to them and explain how your product might maximize roi and boost campaign effectiveness.

They shouldn’t necessarily be large brands: keep a close eye on smaller ones with potential for business growth and try to predict what they will need in 6 months, a year, and even 2-3 years. If you find the sweet spot, they’ll forever be yours.

Step #2: Assemble a Programmatic Advertising Team

Starting a programmatic business doesn't necessarily mean you need a large team. The setup is very similar to what you’d have if you decided to build your own ad network.

However, you do need to have a certain set of key roles filled. Here's a look at the essential team members you need to kickstart your programmatic agency:

Media Buyer

A media buyer is at the heart of your digital advertising agency. They will handle programmatic advertising space, launching campaigns, and be responsible for ensuring your clients' ads are viewed by the right audiences at the right time.

Account Manager

An account manager will liaise between your programmatic advertising services and clients. They will be responsible for managing client relationships, understanding their needs, and ensuring these needs are communicated effectively to the media buying team.

Ad Operations Specialist

An ad operation specialist, or simply ad ops, is responsible for optimizing your clients' programmatic display advertising.

They'll work closely with the media buyer to ensure that campaigns run smoothly and perform optimally. They'll also handle ad campaign troubleshooting and come up with data driven strategies.

Creative Designer

This role is optional; you will need this specialist only if you decide to handle the creative part of media buying. A creative designer will design ads and ensure they effectively attract the target audience.

Also, the fruits of labor of this expert are a great way to show how programmatic advertising works for newbies and explain its benefits over traditional advertising.

How to Afford a Media Buying Team at the Start?

But if you start your media buying business with a mere $5,000, covering the salaries of all four may be a tough challenge. As a starting point, one person might wear multiple hats.

At the early stage, when the workload is not overwhelming, part-time or freelance specialists might be an option, too.

Salaries, at this point, will be a major and recurring investment in your programmatic business. $2000-3000 is enough to cover the part-time salaries of your core team in the early stages, with the expectation that you will reinvest profits into your business to allow for further expansion and better-targeted ad placements.

Step #3: Buy a White-Label DSP and Rebrand It

We said salaries, not the technology, will be the major investment in your programmatic company. How come? You cannot build your own programmatic solutions for just $5,000 from scratch. That’s why we will white-label the existing technology instead of sweating and struggling with traditional methods.

The core tech for your programmatic business is a demand-side platform where you will launch, manage, and optimize campaigns for your clients. This is your hub for automated ad buying and continuous campaign improvement.

You might have already seen programmatic solutions available for a quick start, where you just log in, deposit, and push the “launch” button.

It might be the perfect fit for brands, but it’s not the same for advertising businesses. Also, spontaneous connections like these are definitely not good for your brand safety ad operations.

As for programmatic platforms, self-serve DSPs might limit the scope of your offerings in many unpleasant ways:

1. One user account. Instead of creating sub-accounts for each client you’ll have just one huge list of programmatic advertising campaigns.
2. It’s never yours. The platform will be under the branding of your provider, which is not the best decision for your long-term image as an agency, even if you don't plan on becoming the next Google Display Network.
3. Limited traffic. You can’t connect more traffic sources if you use a platform managed by a provider. You’ll be choosing from what they offer on their ad exchange.
4. No data ownership. You’ll be unable to use all the consumer behavior data transmitted between the sell- and buy-side during the media buying process since the platform is not yours.
5. Chaos in analytics. If you use several platforms to buy traffic, you won’t be able to consolidate the reports of your marketing outcomes in one place.

On the contrary, the white-label platform gives you full control over all we listed above, just as if you’ve built a DSP independently. Yet, it comes at a lower price than a proprietary one.

Epom DSP agency-friendly light package starts from 0250 monthly. With that price, you are SAVING on the tech stack, not vice versa.

Customizing a White-Label DSP for Your Agency

Customization is the whole point of white-label software. After getting a dedicated domain for your DSP, you might tailor the platform's interface to your agency’s brand colors and add your logo. Now it looks like you’ve developed it on your own.

In the admin panel, you can create sub-accounts for clients and decide what features are available for each campaign setup. After that, you define which audience you want to buy and pick the traffic sources/advertising inventory depending on that. Let’s move on to that in the next step.

Step #4: Start Buying the Right Ad Inventory for Your ProgAgency Niche

Once you’ve settled the contract with your client and become comfortable with your DSP, the main action unravels on stage. You define the monthly digital marketing budget you’ll be managing on behalf of your client and start looking for the most appropriate ways to spend it.

Going backward, you likely have found the potential niche to narrow your expertise.

Limiting yourself to just one industry (e.g. finance), format (e.g. video ads), or channel (e.g. connected TV) makes you more competitive in an oversaturated market and streamlines your efforts to find the right traffic.

Imagine we’ve started a programmatic agency promoting mobile games called GameWave Media. We can define its characteristics as follows:

This programmatic agency will have to bring more traffic to their client’s pages in the app stores and, ideally, drive installs to their mobile games. The ads will be shown in similar mobile apps to those potentially interested in playing hyper casual games.

You must connect relevant supply-side platforms to your DSP to purchase such traffic. For starters, we’d recommend asking your white-label DSP provider to help you set up SSPs they already have on their ad exchange.

For example, our GameWave Media can acquire in-app traffic from Mopub, AdColony, Mobfox, etc., already available at the Epom ad exchange. After the platform is set for them, they could easily pick the desired source while setting up targeting for their first ad campaign:

Aside from selecting the right SSP, GameWave Media will have to specify basic targeting options to show their ads specifically to mobile app users who fall under specific areas of interest. Those are the device and traffic types below.

We'd recommend setting up advanced options for more precise targeting, strategic planning, and better campaign results. Among these, GameWave Media might benefit from the store and game application category and, in some cases, device maker and hardware generation.

The last step will be to add the creative of a chosen type, which you can either upload, select a pre-loaded one from the library, or use a 3rd-party tag to derive the creative from another platform. Now, assign the flight dates, and let’s get off the ground!

Resolving the Dilemma: Branding vs. Performance-Based Ad Campaigns

All campaigns can be roughly split into two categories: branded vs performance-based advertising.

The goal of branded ad campaigns is to bring as many impressions to the ad creative as possible. They frequently don’t even aim for website visits and merely focus on views. We launch these campaigns to boost brand awareness and showcase the brand's strategic placements to a wide audience.

Performance-based campaigns are quite the opposite. Here, what matters most are clicks, sales, installs, and other actions. These goals are harder to achieve and thus require campaign optimization and a more thoughtful selection of the audience and traffic sources.

GameWave Media will be leaning more toward a performance-based focus on the scale since mobile game developers always think about installs in the first place.

The agency’s optimization efforts will revolve around decreasing cost-per-install (CPI) and avoiding bot traffic to nullify fake app downloads.

So what should you choose? If you are just starting out, branding ad campaigns may be easier to master and deliver fast results. However, specializing in performance-based campaigns would be more beneficial if you strive for higher revenue and speedy growth.

Self-Serve RTB Media Buying as a Service: What’s the Worth?

Money makers, this part is also for you. Ever dreamt about (almost) passive income? If you choose to white-label, this is completely possible.

Instead of running campaigns for your clients and relentlessly fine-tuning them, you can add self-serve real-time bidding to the list of your services and just resell traffic you have on your DSP to others.

This side RTB gig works simply: you open an account for the client on your platform, help them with traffic connections, and let them launch whatever they want.

The profit you make is the markup you set for each traffic source. This markup will apply to the advertiser’s bid for every impression they buy. Average markups may range from 10% to 50%, and they are hidden from the user by default.

Step #5: Build a Lasting Relationship with Your Clients

As you should already feel quite confident about your business kick-off, let’s discuss the next steps to keep your agency afloat.

First of all, your approach to building relationships is everything. Even huge marketing budgets will be wasted if you fail to retain existing customers. So, you have to develop a basic client-first mindset and stay ahead with growth tactics that will bring results.

Here, we prepared some tips that will help you build relationships that last:

Always Look for New Traffic Sources, Ad Placements & Optimization Tools

Your client must know that your agency can help them recover lost traffic or beat out a competitor constantly outranking them.

Your agency should be the first to test-drive the newest supply-side platforms, optimization strategies, ad formats, targeting patterns, and tactics to optimize ad spend. With expertise in just one industry, improving your targeting capabilities should also be way easier.

Open Access to Reporting for the Sake of Transparency

Transparency in reporting where every dollar goes and what returns it yields can set you apart. Invest in intuitive, clear reporting tools that allow clients to see real-time results, making the ad spend tangible and understandable.

Technically, the white-label DSP opens the opportunity here. Even if your client opts for full-service campaign management from your side, you can give them access to their DSP account analytics.

Build Your Reputation & Stay Away From Controversy

During the first two years, you will work for your reputation; after that, your reputation will work for you.

Therefore, agree on joint case studies, carefully draw up the contract and its terms & conditions, and if you are working on a portfolio case, discuss this with the client before starting to work together. Trust us, your advertising efforts are worth it.

Also, it’s important to be extremely careful with client data. The top concern of brands when they delegate media buying to the agency, is their data privacy.

In the advertising industry, company data is used to improve targeting, while campaign insights might be used against them to promote the competitor. Stay consistent and loyal to your client and clearly indicate how you will use their data.

Invest in Client Campaign Management & Provide Support

Going the extra mile to ensure a campaign’s success can make all the difference. This might mean temporarily absorbing extra costs or dedicating extra hours to optimize campaigns.

Your account manager should also be there to answer questions and synchronize with the client on their goals, plans, and satisfaction level.

Optimize Campaign Performance Now & Optimize More Tomorrow

Your DSP has a depth to dig into. Explore advanced targeting options like geofencing, day parting, custom user segments, and keywords. Experiment with auto-optimization rules, cappings, and bidding multipliers.

Set up retargeting and master media planning: there is uncharted territory with many growth points.

These efforts won’t go in vain: optimization helps to deliver traffic that is more likely to convert and make a difference for your client’s business.

[Infographic] Ad Agency for $5,000: Expense Breakdown

Finally, let’s calculate our estimated monthly expenses. The infographic below will explore how we spend our initial $5,000 and prove that establishing your own programmatic agency is real.

Given the detailed roadmap and financial breakdown we've explored, establishing your own programmatic agency is no longer a daunting endeavor reserved for the deep-pocketed.

Even with a modest budget of $5,000, you can try yourself in programmatic business today, while our team will do our best to consult you on more questions you might have.