Something is rotten in the state of advertising, an industry which I have loved since my first day working for the Saatchi brothers 30 years ago. The sad fact is that too many of the recommendations made by agencies are no longer made for the benefit of the client. That is not good for the industry, the consumer, the media or the value of brands.
I would like to share three examples of how a lack of truth in advertising can destroy the value of the very brands we are meant to be growing.
Transparency of the media supply chain
We have all heard about the decline in traditional media and how digital media with programmatic buys is the best thing since sliced bread. But 30% of desktop users in Europe now use ad blockers, 25% of ads served are viewed by robots and 20% of digital ads are fake.
I recently saw a magazine article that outlined the following scenario: when a client bids for media on an exchange with a range of up to $50 per buy, the actual purchase will take place at around the $2 level. Thanks to multiple players, arbitrage and general confusion the client very often ends up paying the $50 price, or even $100, as each intermediary and agency adds their fees, commissions and other justifications. Such activity is not illegal, it’s just unsustainable for ad tech, media agencies and ultimately for the clients paying for all of this.
The ad fraud scandal facing media agencies, first picked up in the US ANA Report, was described by Debbie Morrison, head of ISBA, as showing that “media agencies are no longer always acting in the best interests of their clients”.
The truth will out: according to The Drum, just this month, the likes of Coca Cola, P&G, and Mars are reviewing their media accounts, representing $10bn of media spend. News that wiped £330m off the value of WPP on just one day last week.
Digital media is different, right?
The new big thing in marketing, promoted by all sorts of agencies, is to use social media ‘influencers’. To me it’s the new big lie.
In traditional media advertising, it is clear a model or celebrity is being paid to promote a product. An advertorial is labelled “Advertiser Promotion”. In PR, a journalist might be sent a product to review but would not be paid or told what to write.
But suddenly the rules of the game have changed for 'influencers' because they are on social media, so is it now acceptable to pay people to say they like a product without disclosing the fact they been paid to do so. And that’s just the start. Things get murkier when you look at the numbers.
This week it was reported that celebrity Paul Hollywood has allegedly been buying social media followers by the tens of thousands. The firm he used can guarantee you – or your brand - a hundred thousand followers for £527. The resulting scandal has caused Hollywood to close down his Twitter account.
According to Takumi, which connects influencers with brands, someone with 100,000 followers can earn £156,000 a year.
The use of paid-for influencers is no doubt working for some brands, but we should recognise it is based on a falsehood. The followers may be fake. The influencers may be fake. And even if they are genuine, they are being paid to say something that is fake too.
Traditional media is dead
Brand Finance’s list of the world’s most valuable brands is dominated by the big digital brands. However, I invite you to look at where they invest their ad dollars.
Companies like Amazon, Apple, Airbnb, Uber, TripAdvisor, brands that have the most sophisticated digital data analytics to evaluate the impact of their advertising, still spend the bulk of their ad dollars on TV, outdoor and press. But you generally don’t see this in agency presentations to clients – with the honourable exception of Havas who sent me the data.
And only last week the Edelman Trust Barometer announced that Britons trust in social media has sunk to its lowest ever level of only 24%. Whereas trust in traditional media has leaped 13-points to 61%.
Sooner or later, and let's hope it's sooner, the industry will realise that the erosion of trust in social media will only lead to consumer disenchantment and cynicism, a loss of credibility for the advertising industry, and a serious devaluation of reputation for brands.
Coincidentally today I met a media agency called 'Truth'. It’s proposition is 100% transparency based on a new blockchain digital platform. A great example of evolution in the industry and of why I remain positive about our future.
Michael Moszynski is the founder of London Advertising. The above is an excerpt of his keynote speech to the Brand Finance Global Forum Dinner on 31st January.