Tag Archives: ad viewability

Will the Media Industry Find Its Way?

27 Apr

agencies as media ownersThere was a time when ad agencies represented an advertiser’s interest when interacting with media sellers to secure time and or space for the conveyance of the advertiser’s messaging. The media supply chain was uncluttered, machine-to-machine buying was not even a distant thought and the roles of the various players were understood by all parties.

As the media industry has evolved, the complexities of the supply chain and the clarity of “what” each intermediary does, what they are responsible for and what they earn have sown confusion, limited advertiser transparency and eroded stakeholder trust.

One of the key drivers of supply chain complexity, and all that comes with it, has been the rapid growth of digital media in general and specifically the expansion of programmatic buying. Thus, there may be no better barometer of this dynamic than the “Marketing Technology Landscape” prepared annually by Scott Brinker. Mr. Brinker’s landscape chart incorporates the logos of each available advertising, marketing and search solution. This year’s version contains logos for over 6,800 solutions, up from 150 in 2011. That is a staggering number of ad tech and mar tech solutions vying for a slice of an advertiser’s digital media dollar.

In spite of the dramatic increase in the number of marketing technology solutions and the exponential increase in the level of data available to inform practitioners media decisions, the industry is still grappling with issues that negatively impact media performance. Issues that include ongoing limitations in attribution modeling, difficulties with omnichannel measurement, a lack of standardization in assessing audience delivery and continued concerns regarding ad viewability, fraud, ad blocking and privacy.

Many would agree that the current state of affairs is not healthy for the global media industry which totaled $500 billion in 2017 (source: MAGNA Global Advertising Forecast, December, 2017).

Marketers, who are under increasing pressure to improve performance, are clearly not satisfied with the status quo within the media supply chain, which many describe as “murky” and “inefficient.” These marketers are committed to seeking out new partners, processes, tools and solutions that can improve working media and increase the chance that each dollar they invest in media has the opportunity to positively impact business outcomes.

Media agencies, for their part are increasingly being challenged to improve both transparency and the cost effectiveness of their clients’ media spend. Sadly, many agencies have taken the stance that there is a cost to be paid for improved transparency, enhanced viewability and brand safety and believe that these costs should be borne by the advertiser. Advertisers rightly disagree with this position.

Let’s be clear. When agencies strayed from a singular focus on their fiduciary responsibility to their clients, they did so at their own risk. Their pursuit of principal based media buys, non-disclosed relationships with other commercial entities in the media supply chain (including their own affiliates) and the myriad of unauthorized, non-transparent revenue generation practices employed by some agencies netted them significant profit gains… in the short-term.

However, as advertisers became aware of these practices and began to understand the negative impact on their business this created a crisis in confidence among advertisers and lessened the level trust that they had in their agency partners. In turn, this has created opportunities for management and technology consultants to make inroads with CMO’s as it relates to their media business and incented many advertisers to begin looking at taking control over portions of their media business, including bringing work in-house.

These trends coupled with the corresponding reduction in non-sanctioned revenue opportunities resulting from greater levels of advertiser transparency have constrained agency margins. How agencies positon themselves for the future in light of the evolving competitive set, while rethinking their service offerings and charging practices remains to be seen, but will be of critical importance.

As for the ad tech sector, there will surely be a shakeout that will result in a reduction in the number of vendors (over 6,200 in 2018) providing solutions. This will be driven in part by consolidation due to the convergence of ad tech and mar tech solutions and the dominance of large players, such as Google, Facebook and Amazon. In addition, the emergence of consumer privacy protection regulatory actions and the eventual emergence of blockchain technology within the media market has the potential for significant disruption.

Clearly, there are uncertainties and challenges facing the media industry and the myriad of supply chain participants. That said, while continued change will be the norm and course corrections required, there will be winners that are able to navigate these turbulent times and position their organizations for future success.

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” ~ Charles Darwin

 

The Ad Viewability Debate Rages On

5 Jan

ad viewabilityThere has been much discussion in the wake of the Interactive Advertising Bureau’s (IAB) mid-December release of their proposed “standard” for the measurement of digital media delivery in 2015. 

Advertisers, agencies and publishers should celebrate the progress being made and the healthy nature of the dialog now occurring between each of the participating stakeholders in this important sector of the global advertising marketplace. Having said that, the pace of change and the level of investment being made by the three major industry associations whose members have the most at stake has been disappointingly slow. 

By way of background the Association of National Advertisers (ANA), American Association of Advertising Agencies (4As) and the IAB formed the Measurement Makes Sense (3MS) task force in 2011 with the goal of “fixing digital measurement.” According to the IAB, the three industry groups have spent $6 million collectively in pursuit of this goal.  

Not to diminish either the effort or the investment, during this same time frame digital spending has increased from $86.6 billion in 2011 to an estimated $142.0 billion in 2014, up 17.2% year-over-year, is forecast to represent 30% of global ad expenditures in 2015 and will likely eclipse TV spending by 2017. Which in this author’s humble opinion supports the observation that the industry has simply not done enough to remedy the limitations that exist when it comes to validating digital media delivery. 

On the surface, many were surprised at the progressive stance taken by the IAB in suggesting that the industry adapt a “70% viewability threshold” for measured impressions in 2015. The question others are asking is, “Progressive relative to what?” The IAB suggested that up until its proposed 2015 transitional guidelines that the “industry standard” was a definition of viewablility issued by the Media Ratings Council (MRC). The MRC’s definition considered a desktop display ad to be viewable if 50% of the ad’s pixels were in view for at least one second and two seconds for desktop video ads.  

It should be noted that the MRC’s definition, which was introduced in the spring of 2014, was never adopted by the advertising industry as a standard to guide publisher/ advertiser negotiations. Thus, it was no surprise when the 4A’s immediately issued an opinion to its membership to reject the IAB’s online viewability guidelines. According to one industry executive, Todd Gordon, EVP of Magna Global, a leading media planning and buying agency, “Running a campaign and paying for 30% of the ads not being viewable isn’t acceptable to us or our clients.” 

In the press release announcing their proposed 2015 guidelines, the IAB trumpeted the “shift from a served impression to a viewable impression” as “yet another step to greater accountability in digital media.” So it was something of a surprise and contradiction to learn that the first of their seven proposed “2015 Transaction Principles” suggested that “all billing continue to be based on the number of served impressions during a campaign.” Additionally, the proposed guidelines segregate served impressions into two categories, measured and non-measured, with the 70% viewability guideline applying only to measured impressions. Understandably, advertisers might view this as something of a disconnect as it relates to the transition to a viewable impression standard. 

We understand that digital campaign viewability measurement is a challenging proposition due to variances in the types of ad units being utilized and the different audience delivery measurement methodologies in use today. However, the IAB’s proposed guidelines continue to place the lion’s share of the financial burden for these shortcomings square on the backs of the advertiser community. Given that the composition of the IAB’s membership is largely made up of publishers, which have benefitted tremendously from the dramatic growth in digital media revenues, we believe that the 4As was right to reject the IAB’s proposed guidelines, with the goal of pushing for a more balanced standard, with more aggressive viewable impression delivery guarantees. 

And while continued dialog between the ANA, 4As and IAB on this topic is encouraging, we know from experience how long and arduous a journey toward an industry “standard” can be. It is for this reason, that we applaud the efforts of those advertisers and their agencies that have taken matters into their own hands and begun to eschew digital ad inventory of questionable value or with limited delivery guarantees. It has been reported that advertisers such as Kraft, for example, have “rejected up to 85%” of the digital ad inventory offered to them.  

Historically, we know that when advertisers self-police their ad investments, audit contract compliance and supplier performance and withhold ad dollars where appropriate, agencies and publishers will begin to take the notion of transformative change as it relates to digital media much more seriously. As Kevin Scholl, Digital Marketing Director at Red Roof Inn aptly stated in a recent Adweek interview on the viewability issue, “If we were buying in spaces with lame guarantees, we had to question continue buying there – or evolve how were buying.” 

Let us know your thoughts on this important issue by emailing Cliff Campeau, Principal at Advertising Audit & Risk Management at ccampeau@aarmusa.com.

 

 

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