Monday, May 15, 2017

Industry Marketers are calling for Digital Transparency of Data and Fees, led by P&G's Marc Pritchard

Increasingly over the last six months, P&G's CMO, Marc Pritchard, has been calling for clean up in the digital advertising space to meet the cost reduction objectives of his organization. This started when a closer look at media buying contracts showed costly transaction fees and profitable cushion for their agency partners. Additionally, digital viewability standards caught his attention because they are unique to each digital advertising outlet from Twitter to Pandora to Google. This essentially means P&G, and other large advertisers, are dealing with a dozen different definitions of whether the consumer had the "opportunity to see an ad". His conjecture is that viewability standards may not adequately capture true consumers impressions and are therefore adding to the excess cost.

Some of the key roles of a media buying agency are to drive economies of scale with purchases and to reduce complexity in the buying process. These two objectives are not being met if the principal is paying a surplus for the agent's profit and the agent cannot simplify the viewability standards and return on investment. Therefore, it is not surprising to see AudienceScience, P&G's primary digital media trading desk, being put on notice. AudienceScience's technology, Hawkeye, was unique when first established because it synchronized data and buying on one platform. While this was a strong partnership over the last decade or so, Pritchard has now coined the term "crappy media supply chain" to describe their performance.

Looking to the future, P&G may be able to eliminate cost and complexity by purchasing directly with large advertising networks like Google and Facebook, but it likely cannot move away from agencies completely, because there are several other fragmented advertising networks to manage (i.e. prime inventory from New York Times, ESPN, etc.). This is a call to action for both agencies and advertising networks to have better accountability to their advertisers -- and with P&G holding claim as the largest advertiser in the world (>$10.4B annually), this will certainly raise the pressure.

Goodbye to AudienceScience
The Crappy Media Supply Chain
P&G's Call to Action
World's Largest Advertisers 2016

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