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Author Archives: cliffcampeau

Will Advertisers Even Be Able to Note the Shift in Data Charging Practices?

15 Feb

transparencyInteresting. However, the questions still remain; “Advertisers, are your agency partners providing invoicing, whether theirs or their vendors, with DSP/ exchange/ publisher costs data costs from net media expense? Is this detail provided by your agency partners on the media authorization forms presented for your approval prior to placing the buy?

If the answer to these questions is “no” then the concept of whether or not data charges are CPM or commission based may not be of consequence to you. Why” Because there is a good chance that the potential “savings” will be absorbed by others in the digital media chain, leaving you with no measurable improvement in working media.

Advertisers should demand that programmatic buys be placed on a cost-disclosed basis, providing direct line of site into all costs (net media, agency campaign management fees, data fees, ad tech fees, etc.) related to their programmatic digital media buys. Read More

Unilever Unveils its Transparency Commitment

12 Feb

Unilever logo“Clean up your act.” That is the message being delivered by Keith Weed, Chief Marketing & Communications Officer of Unilever to digital media stakeholders, when he addresses the IAB Annual Leadership Meeting this week in Palm Desert, CA.

Unilever believes that the bad practices of many within the digital media supply chain risks damaging the trust that consumers have in not just the media, but also the brands that advertise on these platforms.

While the concern is a legitimate one, the industry and some of the biggest players in the digital media sector, have been slow to address advertiser sentiments when it comes to fraud, viewability, brand safety and transparency.

In his speech, Mr. Weed will serve notice to all within the digital media ecosystem that those who have not demonstrably committed to cleaning up the digital infrastructure will be on the outside looking it when it comes to Unilever’s marketing spend.

Hopefully other marketers will follow the lead of P&G and Unilever when it comes to withholding digital media spend from organizations that have been slow to acknowledge and more importantly, address marketplace concerns. Read More.

Keeping Pace with the Rate of Change in Ad Industry Can be a Challenge

31 Jan

lexiconDo you sometimes wonder how you will ever keep up with the dizzying array of change that has become a constant in the ad industry? The good news is that you may not be alone in your angst. Just take a look at how industry lexicon has evolved in recent years to reflect the technological changes that the industry is dealing with and one can easily surmise why practitioners feel stressed out…

Industry Lexicon for the 21st Century

Algorithm, artificial intelligence, programmatic media buying, header bidding, second-price auctions, big data, fraud, domain spoofing, viewability, demand side platform, Pinterest, supply side platform, data management platform. Ad tech, exchange, tech stack, human marketing, voice activation, block chain technology, deep learning, managed service model, the duopoly, GDPR, hyperlocal media, ad spoofing, biometric recognition, virtual reality, winning bid log metadata files, econometrics, PII-based consumer I.D.’s, transparency, martech, Facebook, linear TV, Snapchat, digital content production, ad tech integration, ads.text, brand safety, publisher addressable marketplace, blackhat SEO, walled gardens, proprietary tech integration, trading desks, principal-based buying, brand safe environments, push notifications, mobile-app fraud, spoof impressions, ad networks, e-commerce analytics platform, contextual fit, attribution fraud, HULU, curated inventory, general data protection regulation, CX strategy, cyber security, white list, multi-screen viewing, bid management fees, Instagram, PAM, PII based identifiers, automated monetization, onboard connected TV, app-install, exchanges, click spam, downstream metrics, dynamic creative optimization, sustainable ecosystems, dynamic personalization, performance media platform, extremist content, audience engagement, monetization, fake followers, hard news, enterprise brands, CPI, retargeting, data controller, software development kits, mediation products, combinatorial bidding, people-based marketing, waterfalling,  trust, content recommendation guarantees, Alexa, frequency capping, probabilistic methodology, addressable IDs, over-the-top video streaming, TAG, streaming environments, cross-channel messaging, influencer marketing, direct-to-consumer brands, brand activation, experiential marketing, growth hacking, social selling, fake news, user generated content, storytelling, illegitimate traffic sourcing, private marketplaces, sandboxing, non-human viewing, synchronized nodes, decentralized ad networks, voice assistants, cross-channel attribution, verification technologies, internet of things, personalization, social search, facial recognition platforms, 3-D printing, hyper-relevance, automated buying, voice activation, first-price ad auction, AI machine learning, in-home sensors, smart re-ordering services, digital workspace, multi-channel ecosystem, native advertising, organic posts, privacy settings and controls, FVOD free-video-on-demand, clearing price, net neutrality, invisible bots, Spotify, voice strategy, audio logos, autonomous vehicles, behavioral DNA, spot cloaking …

Never a dull moment for ad industry professionals to be sure. Consider the words of the twentieth century American writer, Alvin Toffler:

“Future shock is the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.” 

The questions to be considered are; “Can the industry sustain this rate of change, without compromising its ability to deliver? Can you?” Only time will tell.

 

3 Keys to Strengthening Client-Agency Relationships

25 Jan

Keys to SuccessMost would agree that strong client-agency relationships are more conducive to achieving positive results that drive in-market performance levels which meet or exceed expectations.

Similarly, both client-side and agency executives agree that “trust” is imperative in building and maintaining a solid partnership. Thus, one could logically conclude that establishing a relationship predicated on trustworthiness would be beneficial to advertisers and agencies alike.

However, as the ad industry has evolved and grown over the last decade or so, it seems as though the ability to establish trust between stakeholders has been greatly compromised. Whether this is between advertisers and agencies or agencies and ad tech providers or between ad tech providers and publishers. While the reasons for this are many, pundits will point to the myriad of documented transparency related issues that have plagued the industry, while cynics might suggest that Agatha Christie had it right when she said: “Where large sums of money are concerned, it is advisable to trust nobody.”

As consultants specializing in marketing supply chain accountability, working with advertisers and their agency network partners, we take a more pragmatic view. We believe that trust is not elusive, that it can be earned and nourished if clients and agencies are willing to commit to the following three steps:

  1. Establish a Principal-Agent Relationship – In short, an advertiser should never have to doubt the allegiance of their agency partners or the objectivity of their recommendations. A principal-agent relationship establishes the expectation that the agency has a fiduciary responsibility to always act on behalf of and in the best interest of its client. Memorialized within the client-agency agreement, this principle is the single best means for fostering trust.
  2. Perform Independent Transparency Accountability Reviews – Actions that advertisers should consider and that agencies should welcome include contract compliance reviews, financial management audits and media performance assessments. Independent reviews of agency performance relative to client expectations and contractual performance requirements instills a certain level of discipline when it comes to governance, and provides both parties with the assurance each is acting within the guidelines of agreement and a platform in which to discuss improvement opportunities.
  3. Conduct QBRs and 360° Performance Evaluations – We are all in the communications business, yet too often client-agency communications are inadequate when it comes to strengthening the relationship. Not talking about day-to-day interactions, but dialog regarding key business strategies and challenges, performance expectations and opportunities that occurs at even the most senior level within each organization. The use of quarterly business reviews (QBRs), that involve cross functional team members and executives from both the advertiser and client organizations are a great way to ensure that both sides are focused on the business and relationship priorities established at the beginning of the year. Complementing the QBRs should be an annual performance evaluation where representatives from the client and agency are invited to provide feedback on the relationship and identify opportunities to improve processes and performance. This should then be followed by a brief meeting to discuss the results of the evaluation and come to an agreement on actions to be taken in the coming year.

Business relationships can be complex and at times difficult. In our experience, implementing the aforementioned steps greatly enhances effective levels of communication, which fosters trust and confidence, which leads to solid relationships that drive superior performance.  As George Bernard Shaw intoned: “The biggest problem in communication is the illusion that it has taken place.”

Interested in learning more about how to improve your marketing supply chain accountability for your organization? Contact Cliff Campeau, Principal at AARM | Advertising Audit & Risk Management at ccampeau@aarmusa.com for a complimentary consultation on the topic.

 

Investigation Reveals That DSPs Are Charging “Hidden Fees”

10 Jan

fraudsterInteresting article from Adexchanger, which reveals that marketers are still subject to a range of hidden fees being charged by DSPs. This item, in conjunction with DSPs earning non-disclosed rebates from exchanges certainly raises questions about DSP objectivity. Of note, these non-transparent charges and sources of revenue can be in excess of 20% of media spend.

While the subjects of “transparency” and “accountability” have been at the fore of industry discussion over the course of the last few years, it is quite surprising to see how little progress has been made across certain segments of the digital media supply chain. It is clear that marketers cannot rely on their media agency, trading desk or DSP partners to safeguard and optimize their programmatic investments.

Strong contract language establishing an advertiser’s expectations for “cost-disclosed” transactions, coupled with independent oversight and financial penalties for violations are required if marketers are truly interested in boosting their working media. DSP’s desire to offset rising costs or to recoup investments in ad technology and infrastructure are not valid reasons for the application of hidden fees. Marketers should continue to push for full disclosure of all transactional cost detail from each player in the digital supply chain. Read More

Nike Evaluates Digital Agency Partners Using a “Reverse Auction”

08 Jan

reverse auctionNot a believer in the reverse auction methodology for sourcing professional services firms. History has shown that this methodology is clearly not the most effective means of evaluating capabilities and or the distinctive nature of an agency’s work and or relevant performance. Additionally, this approach can limit an advertiser’s access to top tier agency talent as many firms will simply choose not to participate in this type of review process.

From a supplier perspective, advertisers using this approach risk being typecast as only being interested in driving agency fees lower, not in building collaborative partnerships or the caliber of the work or the depth of an agency’s resources. Will be interesting to see which agencies choose to participate versus those that opt out. Read More

2017 | A Year in Review: Marketing Math’s Most Read Stories

29 Dec

Top 5With 2017 now in our rearview mirror and all of our attention focused on the coming year, we thought that you might be interested in learning what our “Top 5” blog posts were over the past twelve months, according to our readers.

 

  1. Advertisers: Buying Guidelines Matter
  2. How Well is Your Agency Compensated?
  3. What if You Discovered That Your Digital Dollar Netted You a Dime’s Worth of Media?
  4. The Real Cost of Agency Employee Turnover
  5. Media Agency Estimated Billing Should Be Eliminated

While familiar issues such as; trust, transparency and brand safety continued to be at the fore of advertisers’ attention, new topics including people-to-people marketing, artificial intelligence (AI) and general data protection regulation crept into our field of view.

Thus 2018 certainly promises to be a challenging and exciting year and our Marketing Math team will be at the ready to cover these and other topics impacting the marketing and advertising industry.

The Transparency Premium

20 Dec

price riseIt was with great interest that I read an article on Digiday.com regarding the “media transparency fallout.” An underlying theme of the article was that advertisers should be prepared to pay more for transparency if they want to continue to work with the top tier media agency brands.

The notion that advertisers are not fully embracing transparency, because it “costs more” to reveal to clients how their media dollars are being invested is a laughable premise. If this is truly the position being taken by the agency holding companies, then it easy to understand why independent media agencies could carry the day in 2018.

From our perspective, advertisers are already paying a premium for the lack of transparency. This comes in several forms, including:

  • Non-transparent agency fees and mark-ups
  • Poor quality inventory driven by non-human and fraudulent traffic
  • Soaring non-disclosed ad tech and intermediary fees
  • Brand safety risks tied to questionable ad environments
  • Sub-par performance tied to untenable declines in working media

The fact that an agency would purport that it costs more to provide their clientele with a direct line of site into their media placements, the net cost paid and all of the related fees is a ludicrous proposition. Since when does honesty and transparency come at a premium? Isn’t that the cost of entry?

As we all know, there has been a recurring narrative that advertisers forced agencies to adopt non-transparent, unethical practices by squeezing agency compensation over the course of the last several years. This couldn’t be further from the truth.

Importantly, there are two parties involved in negotiating agency remuneration agreements, clients and the agencies themselves. In the end, no one forces an agency to accept a bad compensation deal. If that occurs, it is only because the agency has agreed to those terms, rather than pushing back or walking away from the negotiation. The notion that accepting remuneration deal terms that are less than an agency’s desired outcome makes it okay for them to pursue opaque practices to pad their bottom lines on a non-disclosed basis is simply wrong.

Thus the position that an agency would abandon such practices for a premium is disingenuous at best. There is never a wrong time to do the right thing.

When will the agency holding companies learn? Practices such as non-transparent revenue, media arbitrage, non-disclosed mark-ups, float income and volume based kick-backs are what led to the lack of trust among the advertiser community toward media agencies. This combined with the fact that the agency community repeatedly denied that they engaged in these practices when questioned repeatedly by advertisers and the trade press.

It wasn’t until the infamous Association of National Advertisers (ANA) media conference in 2015 when Jon Mandel, former CEO of Mediacom blew the lid off of those denials that the industry began to sharpen its scrutiny of these practices. Ultimately, this led to the seminalMedia Transparencystudy conducted by K2 Intelligence and Ebiquity for the ANA in 2016, where these behaviors were acknowledged and quantified.

Agencies that continue to ignore the cost of their non-transparent practices and the potential for irreparable harm that it may cause them do so at their own risk. Now more than ever, advertisers have bona fide options ranging from working directly with publishers and media sellers, moving their media planning and buying in-house to engaging independent agencies or management consultants that embrace full-disclosure.

If the agency community is ready to have an honest discourse on remuneration, we remain fully supportive and would encourage advertisers to openly embrace healthy discussions on this important aspect of client/ agency relationships. In our agency contract compliance and financial management practice, we have never encountered a client organization that begrudged their agency partners the opportunity to earn a fair and reasonable profit. All of these client organizations would welcome collaborative discussions on the development of mutually beneficial compensation systems.

So enough of the pretense that regaining the higher ground comes at a premium.  As the independent media agencies have already realized; “Take the high road, there is much less traffic there.”

 

Can Advertisers Justify Mobile Ad Price Escalation?

19 Dec

agency compensationMobile ad prices to increase at more than 12 times that of the growth in U.S. GDP. Really?

While one must always consider the “source,” one programmatic agency is estimating that mobile ad prices will increase 45% between now and 2019. This in a market where supply still exceeds demand on a broad basis.

Advertisers must be wondering; “What percentage of that increase in price is going to agencies and ad tech providers?”

Full transparency is required, moving from non-disclosed to cost-disclosed buys so that media inventory prices are broken out along with full detail on data, tech and agency fees Read More

Are Advertisers Ready, Willing and Able to Trust Their Agency Partners?

14 Dec

partnershipInteresting survey from Advertiser Perceptions, which queried marketers on topics ranging from favorite ad agency holding company to whether or not they would consider using a management consulting firm in lieu of a traditional ad agency.

Beyond marketers’ rankings of various agency brands, the most intriguing finding is one that is still centered on the “trust” crisis that has enveloped the industry for the last several years. Two-thirds of those surveyed “feel that their agencies are not open and transparent on cost” and “that they are not willing to share meaningful KPIs with their agencies.” This could certainly prove problematic for advertiser and agency alike moving forward Read More

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