The ANA reports that 46% of surveyed marketers expressed concern about the transparency of their media buys in today’s ever-changing digital environment, with 42% saying that concern had increased over the past year. These concerns fall into three areas: reporting, digital ad placement, and the agency revenue model.
In this blog we will examine why there is a lack of visibility in these three areas, and what you can do today to ensure that the agency buying digital media on your behalf is giving you the visibility that you need to make smart business decisions.
Lack of Visibility In Digital Media Reporting
Metrics are often treated the same way. Some agencies do not share impressions, clicks and other metrics, while others gloss over them entirely. It is, however, your marketing, and you have a right to know how it is performing to determine if it is an effective platform for your brand.
To get around the hesitancy of agencies in sharing their tactics and metrics, marketers can increase their knowledge and understanding of how digital media is measured and its effectiveness in achieving goals. With this knowledge, you will be able to review and analyze allocations and spend as it relates to your overall marketing strategy and budget.
Lack of Visibility In Digital Ad Placement
Some of these concerns are based on how digital ads, specifically programmatic ads, are bought and sold. Using real time bidding, ads are requested, bid and purchased within a millisecond. This, combined with the multiple players required to make this happen, means that the process is not as open as some marketers would like. While any widespread changes to reaching a level of transparency marketers deserve will naturally take time, there are steps that marketers can take today to increase their digital marketing transparency.
As a marketer, you want to make sure that you are working with a digital media buyer who uses legitimate publishers. In addition, your buyer should offer full visibility into the campaign’s setup, as well as a documented media plan. The management of that plan, including how to handle any deviations from what was originally discussed, should be documented in a formal agreement. This will help ensure that you are up to date on the management of the program and your marketing spend.
Lack of Visibility in the Agency Revenue Model
Under a traditional fee structure, agencies are paid a commission on the media that they sell. As the amount of money you spend on digital advertising rises, so does the agency’s commission. Conversely, the less you buy, the less they make. As a result, agencies buying media on your behalf are actively looking to increase media spend. It is actually in their best interests to keep your advertising running on underperforming channels, and to avoid optimizations that decrease CPC or CPM.
Rebates and Other Incentives
According to AdAge’s article, “Media-Agency Kickbacks. Yes, They’re Real,” agencies are increasing their revenue through “opaque markups, kickbacks or undisclosed rebates.” In the same article, Mediacom CEO Jon Mandel is quoted as saying agencies “recommend or implement media that is off-strategy or off-target if it works for their financial gain.”
While many media buyers have argued that the AdAge article and the ANA report are too broad in their conclusions, others have noted that kickbacks have become part of “doing business.” As agencies are being asked to do less with more, they will often rely on rebates and incentives that allow them to stay in business. However, it is important to keep in mind that not all agencies operate in the same way. For many agencies, transparency remains a cornerstone to building a relationship of trust, both with their clients and with other vendors.
To protect yourself from kickbacks, rebates and other undisclosed incentives, scrutinize the bills your are receiving from your media buyer. If you are paying a commission on media, the difference between the media costs and your final invoice should match the rate given in your agreement. If you are not paying a commission, then the media and total invoice amount should be the same. And if it doesn’t already, ask that your media summary include a breakdown of activities, with a unit cost attached to each item. A media buyer who is committed to your success will not have a problem with sharing this information.
What You Can Do Today
The key to getting started is to talk to your media buying agency today. If they do not offer the transparency you are looking for, then find an agency or consultancy that has forsaken the traditional buying model in favor of transparency. A transparent buying model, combined with flat-fee or line item pricing, ensures that your goals are aligned and the money you are spending on digital advertising has a positive ROI while also adding value to your brand.