Don’t get comfortable with the transparency status quo
If CMOs had asserted their right to know where every cent of their budgets was invested across the supply chain, today we would have a very different media landscape, writes Stephen Broderick
Hindsight, it is often said, is a wonderful thing. “If only we’d known about this before it happened,” people say, “we would have done things differently.” This is true in personal relationships, in politics, and – of course – in business.
There’s more than a hint of hindsight in the conversations we often have – most particularly with senior marketers of leading brands – about transparency in media buying.
This is especially true of the increasingly automated media buying ecosystem that dominates how media is traded today. “If only we’d known about all of the links eroding value across the transactional chain, if only we’d known where our media investment was going, we could have prevented everything that followed.”
Consequences like budgets being salami-sliced so thin that more than half goes on non-media costs, all claiming to add value to the buy but routinely failing to connect brands to consumers.
Consequences like brand safety and ad misplacement, with ads appearing alongside extremist, pornographic, or fake news content.
And consequences like ad-fraud and non-human traffic.
Of course! Yet the only issue I have with this line of argument is that it truly didn’t have to be this way. It’s always been possible for those in charge of brands and their agencies to agree on the level of transparency that all sides are comfortable with and bake this into the contract. [advert position=”left”]
It’s true that some may decide that the rewards of using non-transparent trades – like Proprietary or Inventory Media – outweigh the risks, but they do so with their eyes open. The decision is theirs.
Whatever the mix of transparent and non-transparent trades CMOs choose to mandate for their brand, it is in their gift to stipulate the terms of transparency in their contracts. This is nothing new. We know, because we’ve been encouraging advertisers to do this for almost 20 years.
If agencies or other trading entities decline an advertiser’s request for transparency – up to and including 100% transparency – the CMO can look for an alternative supplier who will help them meet their requirements.
The global advertising ecosystem depends on advertisers’ media spend, so surely it’s reasonable for those funding the market to see clearly where their money goes.
Over the past couple of years, the world’s biggest advertisers have made a lot of noise about the need to sort out the “murky at best, fraudulent at worst” digital advertising marketplace. P&G’s Marc Pritchard has spoken openly about the role that advertisers have, to put their own and the industry’s house in order.
He’s shouldered some of the responsibility for the lack of transparency in the market and admitted marketing leaders could and should do more to make media trading more transparent and refuse to put up with the negative consequences.
The fact that P&G has shaved hundreds of millions of dollars from its digital media investment with no detrimental impact on sales – $140m saved in just one quarter in 2017, a quarter which saw 2% growth – shows there was clear room for improvement in how the company and its agencies were managing its media supply chain.
This year, it’s been the turn of Unilever’s Keith Weed to make the headlines on how he believes it’s time to “drain the swamp” of digital advertising. Speaking at the IAB Conference in February, he said: “As one of the largest advertisers in the world, we cannot have an environment where our consumers don’t trust what they see online”, threatening to pull ads from Google and Facebook if they “create division, foster hate, or fail to protect children” .
The most recent data show that P&G was number one at $10.5bn and Unilever number four at $8.6bn. When the leading figures who run marketing at two of the world’s two biggest branded goods companies pose tough questions for the tech companies and suppliers of the digital ecosystem, the world takes notice. Not just specialist and trade media, but the broadest possible business and consumer media, too.
Something’s clearly broken in the system if those who contribute most to it talk so openly, so consistently, and so critically. Yet the question remains, could all of the issues that have arisen from a lack of transparency – from brand safety to ad-fraud – have been prevented?
If CMOs had asserted their right to know where every cent of their budgets was invested across the supply chain, today we would have a very different media landscape. By requesting transparency of where the money goes and by setting processes to keep the supply chain as efficient (yet effective) as possible, many advertisers would not be grappling with an uncontrollable waterfall of media costs and little control over who the intermediaries are and the value they create in the chain.
I truly do believe the industry is where it is today in part because advertisers were too complacent with their partnerships – with media agencies, with adtech providers and platforms – and didn’t ask sufficiently challenging questions about how, where, and why their money was being spent. This was partly the result of “shiny new toy syndrome”. But there’s plenty of blame to go around.
As digital grew, so did the number of shiny new objects, and it came to have a lack of transparency built into it – just like out-of-home, decades ago. Digital didn’t come with the rules of traditional mass media. So, when adtech and arbitrage added complexity to digital media trading, it grew too quickly and with insufficient scrutiny. Many advertisers didn’t ask what they were buying or why.
What I find encouraging is that now – at last – more and more advertisers are taking transparency seriously. They’re getting smarter with their contracts, and clauses requiring 100% financial transparency are not uncommon.
To address the challenges thrown down by Marc Pritchard and Keith Weed, advertisers need to realise that transparency and its negative consequences are not yet resolved. And that by taking responsibility for knowing where their budgets are being spent and why, they can help to remodel the industry into one that serves all players fairly and well.
If I were a CMO, I’d audit my contract today to find the risk areas and call my agency in to talk transparency tomorrow. And, if my agency wasn’t prepared or able to deliver the level of transparency I was looking to bake into a new contract, my next action would be to put my business up for tender.
Stephen Broderick is Global CEO of FirmDecisions