Disarming the Ad Bomb: Part 1

Editoramp8217s note Before continuing be sure to take another look at Drexleramp8217s column one of the most heavily read in the history of MediaVillageLetamp8217s dive right into Drexleramp8217s first point which speaks to the transparency issue that has put advertisers agencies and media companies in a confrontational zoneDrexler says amp8220Agencies need to be assured of a reasonable profit and advertisers need to understand the significant investment agencies are making to deliver what they want Media companies also need to understand the deal flow and that they canamp8217t get in the middle of the advertiseragency relationship to only serve their financial selfinterestamp8221My response The lack of financial transparency across the digital landscape has led to a lack of trust on all sides This was confirmed by the virtual no show of most major agencies at the 2015 ANA Masters of Marketing Conference in early October The rampant spread of stories about arbitrage kickbacks agency discounts not being remitted to clients and bogus fee arrangements between agencies and media properties has resulted in the ANA appointing two auditing firms to look into these situations Mediasmith is and has always been among the agencies taking the position that it is the clientamp8217s money and that they should know where it is going Agencies which practice full disclosure are important to the infrastructure of the industry The client should always know the price and the markup for anything they buy from an agency again itamp8217s their money The agencies being investigated have said they have done nothing wrong If so the ANA owes them all a big apology The agencies that are full disclosure applaud the recent ANA actions Clients also need to take responsibility for their own due diligence by asking if their agencies are actually agents or just vendors If you are going to use an agency make sure they are representing you as your agent with fully disclosed media costs and fee structures and are not selling you point solutions with opaque markupsAnother of Drexleramp8217s points speaks to the fact that client relationships are judged to be less than satisfactoryDrexler says amp8220Look at any survey among CMOs and you have the answer But what really brings it to bear is the number of agency changes that continue to go on among clients Unprecedented Whatamp8217s even more stunning as was recently announced is that a client who changed media agencies about two years ago changed again last year and recently changed back again to its previous agency about a year later and the press release read about the same as it did the last timeamp8221My response The Bedford Group competitive to Drexleramp8217s DrexlerFajen Group in performing agency searches produced a white paper titled ClientAgency Relationship Sustainability This piece outlines a number of issues that cause agencies to be terminated including turnover on both sides lack of understanding of a clientamp8217s business lack of relationship between strategy and creative and a number of other cogent points It also lays out some best practices for clients relative to trust respect and overall treatment of agencies permitting them to make a profit and a number of other ideas Anybody on the client or agency side would be well off in reading this piece After all changing agencies is often much more expensive than fixing the current relationship Interestingly just because some businesses are churning over who they work with doesnamp8217t mean anyone is getting out of the pool They are just going to another often similar agency We need to all work together True agencies need to stop acting like they are selling point solutions and clients need to stop treating agencies like vendors and more like partners This is especially true in the procurement process Procurement processes havenamp8217t always been something that is done with the best interests of marketing consideredAnother of Drexleramp8217s facts talks about clients wanting to bring certain operations inhouse Not only media but creative services tooDrexler says amp8220With the advent of technology and automated processes client inhouse trading desks and strategic resources are gaining ground Some are even bringing creative people on board The reasons are primarily cost data sharing control and response time Of course many advertisers donamp8217t fully realize the full cost associated with bringing communication and technology services inhouse but once they get started they will be committed to getting it right with plenty of help from ad tech companies consultants and the media who all expect to benefit in their own wayamp8221My response Last year AnheuserBusch InBev decided to outsource mediabuying bringing about an end to the Busch Media Group The fact that one of the biggest advertisers with the most resources could not make inhouse buying work is a prime example of the resources and experience media buyers bring to the table They apparently realized media buying wasnamp8217t all about deal making It is a complex landscape and if you donamp8217t know how to navigate the terrain you will lose Before bringing anything inhouse a marketer should consider if they have in addition to the media people the engineering adtech knowledge data sciences and marketing analytics support needed for the initiative We hope that going inhouse is more than just hiring a DSP and letting the algorithm do the work Thatamp8217s akin to going back to the site network model which was largely inefficient and expensiveNext week we will talk about Technology and Ad BlockingThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Disarming the Ad Bomb: Part 1

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David Smith

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