Home > Media News > Taking Back Control Of Digital Ad Budgets May Seem Like The Obvious Solution To ...

Taking Back Control Of Digital Ad Budgets May Seem Like The Obvious Solution To Media Transparency issues But It Also Raises Whole New Challenges And Risks Sidelining Agencies.
22 Aug, 2017 / 04:37 PM / OMNES News

Source: https://www.marketingweek.com

908 Views

The last year has seen digital ad spend dominate the marketing conversation and not often for the right reasons. There seems to have been one issue after another, from the YouTube brand safety scandal to Facebook’s measurement errors and the media transparency concerns raised by the Association of National Advertisers’ (ANA) report.

What has exacerbated these is the lack of understanding among marketers when it comes to their media investments, which was clear in the reaction to all three issues. Those that pulled their ads from YouTube seemed to have no idea how their ads could have appeared next to content from white supremacists. Similarly, few had any idea about agency kickbacks, with most claiming ignorance.

And very few have openly admitted there is a problem. Procter & Gamble (P&G) is one of barely a handful of brands to have admitted to errors and to have been vocal about the need for change. Ask any other marketer and they quickly change the subject.

READ MORE: Mark Ritson – P&G’s Marc Pritchard has made the biggest marketing speech for 20 years

Unsurprisingly, few in the industry thought anything would actually change. Facebook and Google continue to hoover up digital ad spend, most brands (bar the likes of the Guardian and Marks & Spencer) are back advertising on YouTube and marketers are still increasing digital ad spend.

But quietly and behind the scenes many brands have been changing how they think about digital and stepping up standards and governance.

“[Marketers] are attacking these issues from multiple fronts, there is a real effort to transform. And there are three key areas where – data and technology, people and capability, and transparency and contracts,” says Matt Green, global media and digital marketing lead at the World Federation of Advertisers.

A survey conducted by the WFA found that, for example, 65% have hired internally for positions such as head of programmatic or media directors over the past 12 months. High-profile examples include P&G hiring Gerry D’Angelo as global media director in September last year. Tesco also hired its first head of media in April, while Airbnb appointed its first media director in former Unilever marketer Geoff Seeley earlier this month.

 

In addition, 18% of marketers are planning to bring their programmatic stack in-house, on top of the 18% that have already done so. A further 41% want to take greater control of their spend. Deutsche Telekom, for example, launched an internal project earlier this year to shake up how it works with agencies, data firms and ad tech companies, according to the Wall Street Journal.

Other still are looking to improve standards and governance. Some 53% of those questions said they now have auditing rights written into contracts. Innocent is one of those brands.

“We’ve put in place more of a robust set of criteria to how we buy media in a digital space,” says Jamie Sterry, Innocent’s head of brand.

Why brands are taking back control
Digital advertising is now the single biggest chunk of media spend. According to AA/Warc data, digital accounted for more than half of spend in the UK in the first quarter.

At the same time, the media landscape overall is becoming more complex, meaning brands need more oversight to be sure their spend is as effective as possible.

“It is often due to legacy reasons, but there are a significant number of brands that don’t have or have very limited in-house media expertise, which given the complexity of the landscape can mean there are significant opportunities to maximise the effectiveness and efficiency of their investments further,” says Alex Tait, former Unilever media & marketing services director and founder of Entropy Consulting.

“Brands have started to respond to this and are realising the significant P&L opportunity in driving growth but also in realising efficiencies.”

In the ‘old days’, brands could have a few agencies that managed the process of media planning and buying across (far fewer) broadcast channels. However, now channel fragmentation and developments in technology mean brands need to work across the full customer journey and have relationships with an ever-growing array of players from creative agencies to production houses to Facebook and Google themselves and ad tech players.

This has resulted in a rethink of how brands organise themselves and the need for a more collaborative approach.

“Brands now need to organise themselves, including their internal teams, agencies, platforms and other third parties, across marketing ecosystems,” says Tait.

“However, they also need to be able to manage the various issues and opportunities across modern marketing communications including those around the digital supply chain including viewability and transparency in how they work with vendors but also more ‘traditional’ disciplines including a zero-based budgeting approach to their media planning.”

This idea of taking back control is not without its own issues however. Lastminute.com has its own in-house trading desk but admits ensuring internal teams have the right capabilities is a challenge, particularly because these skillsets are in high demand. That is why Alessandra Di Lorenzo, Lastminute.com’s chief commercial officer for media and partnerships, believes investing in training and development is critical.

“Upskilling existing employees is key to success,” she says. “For example a bright operations or trafficking expert can make a great audience buying manager.

“By developing in-house expertise, brands will be better placed to understand how their budgets are being spend and drive greater transparency right up the supply chain. Likewise, marketers will become smarter about the tools they use to address ad fraud and unsafe content,” she says.

“As an advanced buyer we require visibility and control over where our spend is going. Our in-house trading desk is crucial to gaining this oversight – helping us make substantial savings.”

Does it go far enough?
But with brands wanting to take more control where does this leave agencies and the ad tech players? Di Lorenzo believes media agencies can still add a lot of value, particularly for smaller brands and those that are not digitally native. However, she warns agencies that they will need to adapt their offering.

“It’s up to agencies to find new ways to deliver value to clients,” she says.

For Innocent that value comes from partnering with agencies to help navigate the challenges. It is using agencies to help with the issues of fake views and bots, for example.

The WFA’s Green also believes agencies will remain important, particularly at major brands that can afford to build in-house capabilities. However, he cautions that at some brand agencies are likely to play more of an execution role rather than be involved in strategy going forward.

“I still think agencies have a strong role to play in planning and buying and most clients agree with that. They will need agencies, not least if they’re a global advertiser because there is a need for external resources if you are selling all over the world. But those roles and responsibilities can move around and agencies may shrink – they could be reduced to execution only. But in most cases there is a role for agencies,” he says.

He also expects to see a shakedown in the ad tech world because as clients bring in internal expertise and education side improves, brands will be in a better position to exert contractual control and work out exactly what they want.

What is encouraging is that marketers and brands see the challenges and are making changes to deal with them. What that solution looks like will of course vary for different brands but as long as the end result is more efficient and effective digital marketing spend, the route does not matter.

“Transparency in the digital advertising world means ensuring that advertisers know exactly where ads are being placed and how much it’s costing them. As advertisers and brands get more savvy about buying media, the whole industry will have to move towards greater transparency – whether that’s opening a more honest dialogue with agencies, hiring media directors to oversee relationships, or building their own in-house resources,” concludes Di Lorenzo.