At this time of year the advertising industry commentariat goes into hyper-drive with predictions for the year ahead, but last year demonstrated just how unreliable forecasting can be. So the trick this year is to ignore the crystal ball and work out how to make things happen.
‘Transparency’ was voted the word of the year for 2016 and whole digital forests were devoted to the effect on client/agency trust of multiple question marks over how the media agency business model can produce conflicts of interest.
However, much of the commentary about media transparency in 2016 missed the key point: it’s not just about the money, it’s about advertisers having full control and oversight over all the factors that lead to successful brand communications.
This includes benefiting from multi-channel recommendations and results based on unrestricted access to the right data and impartial analytics of channel effectiveness, all uncompromised by conflicts of interest.
Although it’s a complex world, marketers simply need eight core requirements from their media agencies, and these can all be achieved with the right media agency and, crucially, the right contractual and compensation terms:
Media agencies cannot deliver their promises unless they ‘get’ the client’s market, business, brand, consumers, go-to-market strategies and the client’s competitors’. This was always true, but the crucial role of customer and user experience has dramatically altered the way that marketing is executed; the first need for marketers is to have media agencies who understand the dynamics and drivers of the marketer’s business, and can provide the kind of planning insights that demonstrably improve consumer connections. This should be the first item on any client’s check-list.
2. Impartiality and the truth
Media agencies are appointed by marketers to provide the best media investment advice. This can’t happen if the agencies’ recommendations are biased, limited or don’t make full use of the appropriate data. Marketers should expect their agencies to warrant objectivity, the correct use of all relevant data sources and declarations of any possible conflicts of interest (for example in the use of ad tech). This especially applies where the media agency is effectively selling the client media inventory that it has pre-bought (so-called ‘principal trading’). All such options should be clearly described and analysed versus other options without bias.
It’s a basic point but long-term, trusting relationships derive from an open exchange between client and agency. Marketers should expect to know everything they need to make well-informed investment decisions without exceptions. Marketers should expect their Agency of Record to ensure that unfettered access to the truth is warranted throughout all parties associated with the marketer’s business.
3. Real multi-channel expertise
We live in a world of almost infinite choice. Media agencies have access to the whole toolkit of old and new options, multiple formats and channels and vast quantities of research and data. Marketers should expect their media agencies to be expert in and explore the relevance of the full range of channels and formats, including those traditionally associated with ‘direct’ agencies, such as e-mail marketing. Great planning produces great advertising, and marketers should expect that their media agency teams can operate expertly across all the right channel options.
Marketers should expect their media agencies to continuously monitor and measure performance versus agreed metrics and adjust accordingly, moving investment into the most productive channels in the most timely way.
4. Measurement, effectiveness and attribution expertise
Measurement is critical in a multi-channel environment which lacks common currencies, and where ‘walled garden’ solutions limit third party data access.
Today’s data-rich world provides marketers with the ability to make evidence-based investment decisions, supported by the right data. Marketers should expect their media partners to incorporate any marketing mix or other effectiveness data available in their recommendations, and deploy the right kind of attribution methodologies appropriate to the marketer’s business. While ‘multi-touch’ attribution is maybe not as advanced as its vendors state, it is the media agencies’ responsibility to pursue improvements in how today’s consumer journeys are tracked and used for planning effective communications.
5. Technology and data
Marketers need their media agencies to be expert in all of the software systems that are needed to deliver the right data to ensure effective brand communications, especially as marketing and advertising technologies (so-called ‘madtech’) converge.
Marketers should expect their media partners, including data and technology providers, to provide unlimited access to the data that are produced through the client’s activities, and marketers should expect to be fully informed on all links in the transactional chain, including access to all data and financial detail. Clients should have real-time access to the business intelligence tools used by their transactional partners.
6. Value and risk management
Marketers should naturally expect their media agencies to relentlessly chase the best value in all aspects of the client’s business, balancing out the relevance versus the price of any bought-in inventory and services.
They should also expect that their agencies would maximise ‘working’ dollars, especially in the online display market where excessive mark-ups and rebates compound the problems of viewability and fraud, eroding effective delivery. Chasing value should include minimising the effects of ad blocking by favouring publishers who actively address it.
Marketers should also expect their agencies to be accountable for the measurement of value, internally and externally, and contribute to the process of value assessment.
They should also expect that any trading-related benefits are shared or returned in line with agreed contractual terms, without negotiation.
7. Keeping it simple
A key role that media agencies should play on behalf of marketers is to stay on top of innovation and advise on its relevance to the marketer. Based on the marketing trade press and conferences, it would be easy to think that Artificial Intelligence, Machine Learning and Virtual/Augmented Reality are widely used in the marketing industry, but this is not the case. Marketers should expect their agencies to bring new methodologies to their attention but assess their relevance first.
And, most of all, they should reduce the jargon and simplify client understanding of the technology options and how they benefit the marketer.
8. Managing the relationship
Underpinning everything else, marketers should expect their media agency partners to abide by the terms of the contract that both parties agree, and that good faith applies in the relationship. All of the marketers’ needs listed in this article can and should be addressed in both the signed Master Services Agreement contracted between the parties and also a mutual Code of Conduct (see page 28 of the ANA’s Media Transparency: Prescriptions, Principles and Processes for Advertisers).
Marketers should expect both self-compliance and independent verification, and no restriction on the marketer’s rights of contract compliance partner or process.
None of the above eight points specifically include the word ‘transparency’, but each component contributes to a transparent and trustful relationship. However, there is one additional expectation to add to this list; marketers should expect to compensate their agencies well for their services. One of the contributing factors to the transparency debate is the extent to which media agency earnings have been obscured by untransparent practices.
Now that it is much clearer that such practices exist, marketers must adjust the ways they pay for services in a more transparent environment, with rewards for performance versus agreed metrics.
This list may appear daunting at first, but marketers who want to exercise the right level of stewardship over the significant investments they make in multi-channel marketing should also expect to invest in the right internal resources to maintain control.
In 2017 we will hear a lot less about transparency but a lot more about what it really means and how advertisers will achieve it through a structured program that leads to a better return on their investment.