Media Buying Transparency
Advertising has changed remarkably over the past few years, mainly impacted by digital disruption and advertising technology. “Algorithm” is no longer a dirty word for many marketeers, and “programmatic” is becoming part of their day-to-day jargon.
But the media landscape has never been more complex, and the necessary skills have never been broader. Yet, more and more, marketeers acknowledge that marketing and advertising technology are essential to moving forward.
Digital media buying has become a black box that marketeers don’t dare to open; they prefer to outsource this fully to their agency. In fact, CMOs mention lack of transparency in media buying as the number two reason for bringing things in-house. And 96% of companies are somewhat or majorly concerned with media agencies’ transparency.
The big question is really about media neutrality. There are extensive kickbacks within media agencies, which result in them earning money twice for the same piece of work. First, they are paid legitimately by the advertising client who uses their expertise and buying systems to purchase media on their behalf. Next, incentives are paid to the agency by the media seller or ad tech vendor who supplies the media.
This is probably a tale as old as advertising itself. It has been around for as long as we can remember and comes with a multitude of different names. Consulting fees, surcommissions, discounts, over-riders, black pools, volume deals, school fees—they all mean the same thing. The media supplier pays the media agency for using their platform or media.
It’s a bit dodgy, but it’s not illegal. However, it does make you question the media agency’s independence. If only they would reveal why they are making you the recommendations they are suggesting in the media plan. But very often, these kickbacks are hidden (and maybe not even visible) to the person in your agency buying placements for you. Sure, there are advantages of trade relations and scale buying. But what if the placements he or she selected were sub-optimal for your needs and picked purely because it offered the media agency a significantly better kickback? That is where the issue of media kickbacks becomes more complex and potentially divisive.
Deborah Morrison, from ISBA (an advertisers’ association), recently made headlines when she told the Financial Times that UK advertising was at a “tipping point”. “I don’t believe that [media agencies] have got the best interest of their clients at heart anymore.” Morrison notes that the issue of kickbacks is hardly new. Still, the growth in digital spending has exacerbated the situation. “As that has developed, the whole thing has become more and more opaque, and right now marketeers are really asking what they can do about this.”
Life has probably never been more complicated for marketeers. There are too many choices, things are changing too quickly, and there are too many different measurement systems to keep up with. As a result, the need for media expertise has never been greater. But that expertise is now clearly compromised by yet more complexity in the form of kickbacks and incentives. And what does this say about the future of programmatic marketing?
In a world where everything is connected, it’s expected that everything from your in-store posters to TV advertising adapts automatically to your newest campaign—that your Facebook ads change when something relevant to your customers happens in the “real world” or that your LinkedIn ads convey a different message to your top clients. Only then will your brand be connected and create a significant impact.
According to Google, more than 80% of all media will be digital and programmatic 10 years from now.
But will any of this be possible if you aren’t running your media buying show yourself? How can you then combine the latest possibilities of ad tech in your marketing strategy? How can you ensure that you are asking the right questions to your tier-one agency? Or how can you be sure that your own team is sufficiently skilled to challenge your agency on their proposals if you don’t get all the bits and pieces of programmatic buying or real-time bidding?