The past 12 months has been a real challenge for many advertisers as they steward their company's investment on marketing to their customers.
We've all read the fallout from the 2016 ANA Media Transparency Report which has taken it's toll on advertisers and agencies alike. Guidance from the ANA has been welcome and many advertisers have started following that guidance to bring an increased level of clarity to how their agency treats their media investments.
Clients have also been hit with a barrage of headlines about the effectiveness of digital advertising and, more importantly, the concerns that exist around fraud, viewability and brand guardianship when it comes to where their online ads appear.
We have seen a number of our clients making the tough decision to pitch their media business (though this has not always been due to trust issues) and go in search of a new partner to guide them through the media minefield that has become a modern reality. We have also seen just as many of our clients decide to invest time and effort in putting structured agency management in place to overcome the challenges.
What has been consistent throughout is the fear and worry that clients have experienced as a result of the revelations of the last year. Pressure from the C-Suite as they have been made aware of these concerns has trickled down to the marketing leadership and they are desperate to provide answers.
Agencies have not always helped themselves, as some were too quick to deny any responsibility for the situation and others have actually hampered their client's efforts to understand more. Sadly, some agencies have hidden behind contractual language and claimed that they cannot give their clients the transparency that they crave - I've yet to meet a client that accepted this without asking the question..."what have they got to hide?"
All of this has led to a change in the levels of trust between the two parties and has encouraged clients to get more engaged in the entire media ecosystem. In my view, this is a good outcome because we are now seeing those same clients questioning why their investment is being pushed on certain media and holding their agencies to a higher standard than before.
What is still a concern is that true transparency is still not here for much of the clients investment... lets start with a definition of transparency for any media:
To have a truly transparent transaction, the buyer (client) should have knowledge of the price paid to the supplier (publisher). All of the various parties in the middle of the supply chain have a fair right to earn a fee (or commission) for their contribution to the outcome but these fees should be clearly demonstrated to the buyer (client).
Now, in the average programmatic supply chain, there are at least six players that are involved in every transaction (agency, trading desk, DSP, exchange, SSP and the publisher). The challenge for many advertisers is that they do not see a breakdown of costs across each of these participants, they only see the costs they pay their media agency. What this means is that advertisers rarely (if ever) see what the publisher is being paid for their inventory (let alone what the rest of the supply chain is being paid).
Various studies have claimed less than 50% of the costs to the advertisers actually trickle through the supply chain to the publisher - this should raise the question among advertisers of 'where does the rest go?'. When you realise that half of your budget for a campaign is going to vendors that you have no contract with (or right to audit) you start to see why there is such a large transparency issue in media.
So, how do you fix this mess?...
First of all, its time to take some control over your media campaigns and understand where your budgets are being spent.
- Request a detailed breakdown of the vendors involved in your programmatic campaigns
- Request a breakdown of the fees being paid to each (and every) participant in the supply chain (from the agency trading desk right through to the SSP)
- If you are using multiple DSPs, ask your agency to give you a clear rationale for each. Don't be the client who ends up bidding against yourself through multiple DSPs!
- Look at opportunities to enter private marketplaces so that you can work with publishers that you want to work with directly - this way you can make sure you maximise the amount of your budget that is going to the main player that brings you an audience
- Review your contracts - make sure you have the rights to audit and inspect the various members of the supply chain. The sad reality is that most contracts don't allow the advertiser to audit past the agency they work with - not an ideal situation with such a complex supply chain
- Build your expertise. Its good to work with a media agency that you trust but its even better to have the expertise internally to truly understand the decisions that are being made on your behalf
Obviously, this is an ever changing environment so its important to stay interested in whats happening so you can make sure you are maximizing the value of your brand's investment - if you ever need help with this, feel free to get in touch...