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 a 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 campaigns for the best performance, etc.
So how? The answer on how to start a programmatic agency and keep it afloat is below.
Intro to a Programmatic Agency Business Model
A programmatic 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 used to run campaigns are independent and do not belong to social networks or walled gardens, aka Google.
Third, it means they will be using programmatic platforms to run their campaigns. These tools aka demand-side platforms automate the media buying process with a real-time bidding protocol.
Summing up, a programmatic agency focuses solely on buying traffic on independent websites and apps, bypassing social media, PPC, etc. and uses a demand-side platform from its technical side. An all-around digital agency may use many tools and channels at a time.
Why is There a Demand for MORE Programmatic Agencies?
Now, programmatic makes up 84% of all digital display advertising spend, and it’s projected to grow by 87% in the nearest three years. Right now, the global programmatic market is valued at $47.47B and will rise to an unbelievable 0901.65B by the end of 2033.
This not only means it’s not 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 ad budget for them as effectively as possible.
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 agencies are intended to have this expertise, allowing brands to focus on their core business operations, leaving the media buying hustle to their partners.
As for you, money makers, running a programmatic agency means you will spend the client’s budget wisely, re-selling the traffic at a margin. For that, you need an in-house demand-side platform, where you will be setting these markups. What’s more, there is another option to let your clients bid on traffic directly, minimizing your human resource involvement.
Doubting? There are already agency players on the market, but the current relationship between the agency and the brand lacks transparency and a personalized approach. Brands often feel overcharged and do not know where their money really goes. Thus, there is room to enter the playground with customization, better performance measurement, and openness in mind.
All this is possible even on a budget if you follow the steps below.
Step #1: Define Your Ad Agency’s Niche and Find Your First Clients
So, if you’re wondering how to start a programmatic agency from scratch, I’d strongly recommend you retrieve 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 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 ad agency, 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, or trending programmatic 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 focusing on just one ad format. 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 at. 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. Many boutique programmatic agencies were created by ex-big-agency employees. 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.
If word-of-mouth doesn’t work, contact your potential niche clients on Linkedin. Research how their brands might benefit from programmatic and convey its value to them.
They shouldn’t necessarily be large brands: keep a close eye on smaller but growing companies 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 Agency Team
Starting a programmatic business doesn't necessarily mean you need a large team. 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:
A media buyer is at the heart of your operations. They will handle buying media space, launching campaigns and be responsible for ensuring your clients' ads are viewed by the right audiences at the right time.
An account manager will liaise between your programmatic agency 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' ad campaigns. They'll work closely with the media buyer to ensure that campaigns run smoothly and perform optimistically. They'll also handle ad campaign troubleshooting and resolve these issues.
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 ad creatives and ensure the ads effectively attract the target audience.
How to Afford a Media Buying Team at 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.
Step #3: Buy a White-Label DSP and Rebrand It
I said salaries, not the technology, will be the major investment into your programmatic company. How come? You cannot build your own platform for just $5,000 from scratch. That’s why we will white-label the existing technology instead of sweating and struggling.
The core tech for your programmatic business is a demand-side platform where you will launch, manage, and optimize campaigns for your clients. You might have already seen 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.
Self-serve platforms might limit the scope of your offerings in many unpleasant ways:
- One user account. Instead of creating sub-accounts for each client, you’ll have just one huge list of campaigns that is hard to navigate and optimize.
- 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.
- 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.
- No data ownership. You’ll be unable to use all the data transmitted between the sell- and buy-side during the media buying process since the platform is not yours.
- Chaos in analytics. If you use several platforms to buy traffic, you won’t be able to consolidate your reports in one place.
On the contrary, the white-label platform gives you full control over all I 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. After that, you define which audience you want to buy and pick the traffic sources depending on that. Let’s move on to that in the next step.
Step #4: Start Buying the Right Traffic for Your Agency 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 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, format, or channel 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, I’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 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 that fall under specific areas of interest. Those are the device and traffic types below.
I'd recommend setting up advanced options for more precise targeting 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 and performance-based.
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 to a wider 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 smart 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, I prepared some tips that will help you build relationships that last:
Always Look for New Traffic Sources & 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, and targeting patterns. With expertise in just one industry, it should 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 and 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.
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 Success and Provide Impeccable 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.
Use the Full Toolset to Optimize Now and 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.
Lay the foundation for your agency by white-labeling a DSP at $250/month, as promised:See your package