Tag Archives: Adweek

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.

 

 

What is the Future of Agency Trading Desks?

17 Apr

crystal ballIt was recently reported in Adweek that IPG was re-organizing its trading desk operation, Cadreon.  Representatives from IPG cited the costs and conflicts across its agency brands and offices stemming from having a centralized, autonomous trading desk with its own P&L.

This is a timely issue as publishers, agencies and advertisers brace for a pronounced increase in the role of programmatic buying.  Internal squabbles aside, the reason why some agencies aren’t totally on board with holding company trading desks comes down to one item… their own bottom line.  While agency holding companies could easily address this dilemma via a revenue sharing model between their entities that is not the seminal issue with trading desks.

The primary consideration in our opinion should be focused on an agency’s role in serving the advertiser and whether or not that obligation can be fulfilled when they’re acting as a re-seller of media where the original inventory cost is not disclosed.  Secondly, while the agencies and the ad networks have figured out how to make money moving digital inventory, publishers and advertisers are now evaluating the financial impact of programmatic buying and assessing alternatives which drive both efficiencies and performance for their respective organizations.

What are the financial implications?  The aforementioned Adweek article cited “agency insiders” who indicated that trading desks generated “high profit margins” in the “40% to 50% range” (hence the internal conflict).  Easy to see why advertisers would forgo the arbitrage model and opt for having their media AOR handle the digital media buying, on a fully-disclosed basis, within the context of their letter of agreement and the remuneration program that has been established.  Throw in the desire for advertisers to understand more about the quality of their digital ad placements and the environment is ripe for change.

Does this spell the end for trading desks?  Not at all.  Change and refinement are to be expected for a business model that only came into being within the last several years.  The technological capabilities that trading desks possess to manage reams of client data to effectively match advertisers with relevant inventory/audiences on a real-time basis is incredibly valuable.  This is particularly compelling as a higher percentage of an advertiser’s budget is shifted to digital media and programmatic buying.  Having said that, most advertisers are simply not willing to accept the level of opacity and the resultant hidden learning’s, which reside within their agency’s trading desk operation.

While media has evolved through the decades, the formula that has governed the media marketplace should remain constant; publishers sell inventory and advertisers buy inventory through their ad agency partners… not from them.  In the words of the noted American author Wendell Berry:

“The past is our definition.  We may strive, with good reason, to escape it, or to escape what is bad in it, but we will escape it only by adding something better to it.”

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