One of the major takeaways from a year riddled with one media transparency scandal after another is that it has pushed the debate on the value of media higher up the corporate agenda for 2017.
Now, it’s more likely for the world’s biggest ad spenders to (at least) consider if they should wrestle back control of a task they traditionally abdicated to agencies. Rather than only concern themselves with what needs to be spent to reach the biggest audience, executives are realising that they might need to look at the value they can extract from those investments.
The most “progressive” advertisers focus on “business value contribution” as well as media pricing, observes Lindsay Pattison, global chief executive of the GroupM-owned Maxus. They pay a “fair fee” for a well-equipped team “because they know that that is one of the required essentials to give them the marketplace advantage that they need,” she adds.
It’s not an entirely new observation and yet there has arguably never been a year filled with such a high concentration of marketers putting this approach into practice. While 2015 had its “mediapalooza” of media reviews, last year saw more marketers openly discuss the doubt they had in their media relationships being best for all parties.
From McDonald’s intriguing performance-related deal with DDB, Coca-Cola centralising social media and Pernod Ricard exerting more control of its programmatic buying to the deluge of media reviews, more marketers are trying to ask the right questions of their media agencies now they've started to wonder whether they have over invested in digital.
Part of that doubt was exacerbated by the ANA’s (controversial) revelation that there is too much risk around the way media is currently traded. Both Facebook and Dentsu fuelled those fears just months later when they separately admitted to mistakes in the way they valued the media they trade. If that wasn’t bad enough it then emerged in November that both Facebook and Google had been selling ads on fake news sites.
“I feel that 2016 has been a challenging year for the industry across the board,” says Airbnb’s chief marketing officer Jonathan Mildenhall. What the fallout means for him is that the “biggest area of investment in 2017” is marketing analytics and importantly the arrival of the brand’s first chief media officer.
“I need an in expendable group of people who are working inside Airbnb that are genuinely on top of all this data - the industry is awash with data but a lot of industry marketing organisations are still data ignorant,” he opines.
This isn’t to say Airbnb will be bringing their media activation in-house. Very few businesses have the resource to do this properly and even then, it is often far more complicated than they ever imagined. What Mildenhall and others - like Nissan’s media specialist and general manager for marketing communications across Europe, Martin Moll - actually want when they talk about investing in media training is to be able to bring the discipline closer with creative.
“We could massively change the game if we have far more innovation on a regular basis where the media agency is almost putting the creative agency and the client under more pressure to think faster in the interest of the consumer...I just can’t seem to close the loop on that,” rued Moll at an event hosted by media consultancy ID Comms.
“Historically the media agency will take content and push it through channels. But where I try and push the business is that media [agency] side is actually the closest link to the consumer…the media agencies know the target audience, whether it’s the media they consume or what they gravitate toward. The specialists at [media] agencies could be the gateways in to the clients and the creative agents that say 'this is where the people are’, ‘this is what they’re talking about’ and then asking what content could you create to fit that channel. Instead, we end up saying ‘this is what we want to talk about’, ‘this is how we’re hoping to force it through channels’ and ‘this is the amount of money we put against it because we have a mathematical solution that says this is the way the media mix should work’ And then you lose the ability to measure it.”
His observation chimes with the push among some advertisers to break from the antiquated and automated media trading system as it now exists. Some, like Hyundai, are threatening to disintermediate agencies entirely and broker deals directly with the likes of Google, while others like Volkswagen in Germany or Unilever’s Dollar Shave Club are experimenting with partners that aren’t financially dependent on how much they spend.
These marketers and others are quickly realising that as the convergence of media accelerates they need to get better at combining customer targeting, data management and content development. What’s more, they are putting pressure on the likes of Facebook and Google to be more open to third party measurement.
For all the marketing clout of an advertiser like Coca-Cola, the likely reason it hired its first chief digital marketing officer last month was to determine the right value they are prepared to pay for new media. Then there are those like Heineken, which has held discussions with Facebook in the wake of its metric mistakes and demanded that the issue has to get better.
“It means that clients are looking for sustained optimal communications performance (targeting and content) delivered at the right price relative to the perceived value of that impact,” says Steve Hyde, the chief executive of 360xec, an executive headhunting outfit that has seen an influx of briefs for media specialists over the past 12 months.
“Therefore, if we look towards common metrics that clients and their suppliers can use to inform value, then we have to consider customers and consider their value based on the cost and return for moving their intentions to a more positive place than they were previously.”
Heineken is one advertiser trying to do just that; the brewer is working with Publicis Media to find a data management platform that can sharpen its targeting and it’s why it has stepped up efforts to avoid bidding on low quality impressions.
"You save money with programmatic but are you actually getting viewability?" asks Ian Wilson, Heineken’s senior director of global digital and marketing development.
“What we are doing is working with Publicis Media as our lead agency so we must trust them,” he continues. “We also want to work with good media vendors so we are going for a lot of in-app [inventory] with YouTube and Facebook, because you should be guaranteed quality. We are trying to avoid real time bidding, and bottom of the class websites, which are cost efficient but I’m sure a lot of that is not viewed.”
What was a perennial sticking point for publisher’s in the way they tried to get programmatic to value the quality of their journalism versus that of another, – and price accordingly – something which has been given urgency amid the proliferation of fake news sites.
It’s a matter not far from the minds of media owners such as Disney and Auto Trader in their efforts to ensure programmatic trading can better recognise (and ultimately value) aspects such as the design, quality and content of their environments. There are concerns from media buyers in the US that Disney hasn’t done as much as it could in this regard, per a CNBC report, while Auto Trader moved a significant chunk of its programmatic activity in-house last year and plans to do more.
“There is a lot of consolidation happening in this industry, and the notion of ‘the full stack solution’ seems to be on top of many tech companies’ agendas,” says Lara Izlan, director of programmatic and audiences at Auto Trader. Adapting to these changes proved a big part of Izlan’s 2016 agenda, which saw her expand the team to incorporate a wide variety of skillsets encompassing commercial, operational, technical and analytical.
“For us, to deliver the best results for our customers, we still need to adopt more of a portfolio approach to building out our programmatic capability – this includes partnerships with the larger players, the specialists, and increasingly, building our own solutions in-house.”
The subject of consolidation in the advertising sector was hotly debated at The Drum’s Programmatic Punch conference, where senior executives from Twitter’s mobile ad server MoPub, the Financial Times and more shared their views on why it would happen in 2017. Everyone agreed that more consolidation is to come as those companies just trying to extract money from the system without leaving any value fade away - with an increase in transparency it’s becoming clearer who those players are, observes Jana Sievers, head of demand partnerships, MoPub.
The Financial Times’ global head of programmatic Elli Papadaki expanded on this point: “Consolidation has to happen. I think a reason for that is the space became so crowded at one point that it was starting to inhibit as opposed to enhance the programmatic process. It became increasingly complex to work out how to navigate the space and a lot of time has been wasted trying to standardise how viewability, for instance, is measured by one vendor to another and that’s the sort of thing that we’re hearing people getting quite frustrated about. It certainly will come to a head at some point where it should be consolidated and then everyone will be working to the same standards.”
Whether it’s the rise of the chief media officer or the emergence of the advertiser/agency model of the future, the next 12 months will see big changes across the advertiser, agency and media owner.