ACCOUNTABILITY and TRANSPARENCY in MEDIA TODAY: an Ebiquity Guide

A CLEARER PICTURE

ACCOUNTABILITY AND TRANSPARENCY IN MEDIA TODAY: An Ebiquity guide

p1 // A CLEARER PICTURE - Accountability and transparency in media today IN A NUTSHELL

Today’s media world is complex and fragmented. Technology and working practices have led to a lack “The objective of accountability and transparency, is to improve return frequently exacerbated by a lack of on investment by contractual clarity. ensuring that advertising performance is measured This guide is designed specifically and optimized, with minimal to help advertisers’ media and loss of effectiveness marketing procurement teams deliver greater brand and business through unnecessary performance. It aims to ensure costs.” that advertsing performance is measured and optimized, and that advertisers’ budgets are put to the most effective use.

The guide charts the reasons how and why today’s media industry has become so opaque. It concludes by proposing ways in which advertisers should tackle these issues head-on, with the emphasis on actionable recommendations to improve performance.

As independent marketing performance specialists, Ebiquity believes that brand owners should seek accountability of performance and transparency of data and money flows to enhance business performance through greater marketing efficiency and effectiveness. This document explains how.

To see the transparency in today’s complex media market visualized, go to page 12.

p2 // A CLEARER PICTURE - Accountability and transparency in media today IN THIS GUIDE

THE CONTEXT – The new media landscape 4

Digitization, integration, and measurement 4

Programmatic promises 4

Advertiser reactions 5

THE PROBLEM – The media market and lack of transparency 6

Consolidating agency buying power 6

Profit margin pressures 6

Transparency in the digital market 7

Contractual rights and wrongs 8

The impact on advertisers 9

The problem in summary 10

THE SOLUTION – How advertisers take back control 11

Independent performance measurement 11

Data analytics technology 16

Ownership and control of data 17

Getting the right contract 17

Agency remuneration and reward 18

Media transparency visualized 12

The main points again / Further reading 20

Glossary 21

About the author 22

About Ebiquity 23

p3 // A CLEARER PICTURE - Accountability and transparency in media today “Integrated marketing communications across multiple platforms and devices is now the norm, not THE CONTEXT the exception.” The new media landscape

Driven by the explosion of digital supplemented by the wide range of provides effectively unlimited channels, the media landscape new digital options such as search, real-time opportunities to track has changed out of all recognition mobile, social media, online display, and record consumer interactions. over the past ten years. The online video, and newer content- Data analytics are replacing ‘gut market for media planning, buying, related options such as native feel’, judgment, and research as the optimization, and measurement advertising. primary means of making marketing is more complex, confusing, and choices. Meanwhile, tough opaque than ever – and the With digitally delivered interactivity, economic times have encouraged proliferation of media channels and most especially in social media, brand owners to concentrate on choices means that complexity is people can now upload their likes, real return on investment – so the ‘new normal.’ comments, photos, stories, and measurement of actual impact on other user-generated content as business performance, not just In this section, we characterize much as they want, whenever they audience delivery. the most important elements of want, wherever they like. People this new media landscape and the express themselves freely and And this isn’t the case just for the consequences it has for advertisers pass comment in a way that can traditional medium of advertising; and their relationships with media help make or break reputations of customer data now commands a agencies and media agency groups. brands and businesses (so-called substantial proportion of marketers’ earned media), requiring brand attention via sophisticated Digitalization, integration, and owners to be always-on, managing databases, used for targeting, measurement their brand exposure and reputation retargeting, and personalization continuously and in real-time. of marketing messages through We live in a multi-channel, multi- multiple channels, built around device, mobile-led world, where The result is that integrated Customer Relationship Marketing. consumers have an almost infinite marketing communications across range of information, entertainment, multiple platforms and devices is In particular, the market for the and communication options now the norm, not the exception, trading of online media inventory available to them – on demand. and any brand or service aiming has changed beyond recognition to influence consumer attitudes in the last few years, and will In turn, there are now countless and behaviors has to adopt a paid, be transformed still further by opportunities to reach potential earned, shared, and owned (PESO) the increasing development of customers with marketing fully integrated approach. This technologies which help the sell communications messages, whether makes life tougher for marketing and buy sides interact with each through paid-for advertising or the professionals, who have to manage other automatically, with less human advertiser’s own branded content, a complex nexus of channels and intervention. such as their web-based, owned- messages, often employing many media properties. different agencies with specialist Programmatic promises expertise to deliver a multi-channel The existing choices within strategy. The principles and practice of traditional channels have multiplied programmatic (i.e. automated) dramatically (so hundreds of And then there is measurement. trading are now well established in TV channels, for example), Digital transmission, in particular, some markets, and there has been

p4 // A CLEARER PICTURE - Accountability and transparency in media today “Today’s brand owners are faced by ever more choice accompanied by incredible complexity.”

a rapid increase in the volume of • The potential accountability and agency] profits continue to rise. This inventory traded automatically and transparency of data-led buying demonstrates that advertisers feel via real-time bidding (RTB), where decisions. that agencies and media owners are buyers and sellers are matched being less transparent than ever.’ according to preset criteria in the In short, today’s brand owners blink of an eye. are faced by ever more choice In fact, the entire media trading accompanied by incredible market has never been less In 2014, $9.8 billion of US online complexity. The revolution brought transparent than it is today. display space is forecast to be about by digital technology and Advertisers are finding it more programmatically traded, and 34% of platforms has transformed consumer difficult to track the flow of their this will be sold and bought via RTB behavior, increased consumer performance and money in this (source: eMarketer, Programmatic power and choice of what they increasingly complex eco-system. Advertising: Forecast and Future are served when, and disrupted The net result is twofold: Growth Trends, November 2013). traditional business models. Look There have also been early around any commuter train in any • Many clients are arguably paying examples of automated trading city and witness the shift from too much for their advertising, reaching the outer shores of newspapers to tablets, for instance. and their agencies are potentially TV, especially in the USA. The making windfall profits from increasing penetration of internet- Advertiser reactions the lack of transparency in the delivered TV – including Hulu, market, especially in the digital Netflix, and the controversial So far, so promising. But there channels. is mounting evidence that the Aereo – will undoubtedly lead to • Advertisers feel that they do not advertisers who fund the entire automated trading in the world’s have full control over, and access advertising eco-system are not yet most popular, powerful, and biggest to, their customer data. branding medium. seeing the full potential benefits of the new advertising model. This short guide charts the reasons Advertisers are attracted by the The extraordinary changes in why the industry has become so efficiencies of automated buying the consumer market have not opaque. In looking to tackle these and selling of media space, for four been replicated in the structures issues, brand owners should seek key reasons: and processes of the advertising accountability of performance and industry. And while digital data offers • The ability to achieve more transparency of data and money the promise of full transparency of flows. The objective should be effective, efficient, and media performance, the experience personalized targeting of to increase working budgets and of many of the world’s biggest improve business performance. selected audiences through data advertisers shows that this is not yet analytics. This guide explains how, with happening in the media markets. the emphasis on actionable • The efficiencies inherent in a less recommendations. In 2012, the World Federation of manual process. Advertisers (WFA) surveyed their • The intrinsic measurement members and found that 88% capability of data-rich channels. agreed with the following statement: ‘Agency fees are falling, yet [media

p5 // A CLEARER PICTURE - Accountability and transparency in media today “The bigger media vendor deals … should offer clients improved terms and thereby better value, but they are also frequently a source of additional income for the media THE PROBLEM buying groups.” The media market and lack of transparency

Lack of transparency in the modern, The big marketing services groups Meanwhile, with the emergence globalized media market is the progressively set up media agency of digital channels (and especially result of four major factors: buying houses in the late 1990s social media) as a powerful and early 2000s, consolidating the component of the marketing • Consolidated agency buying purchasing power of the larger and mix, the advertising industry has power. better-resourced media agency globalized. Large worldwide media • Agency profit margin pressures. networks. vendors including Facebook, • A particular lack of transparency Twitter, and Google now trade The first such entity was GroupM, in the digital media market. with the buying groups at a global WPP’s trading group (consolidating level, doing bigger deals, with • Contracts that are no longer fit for the combined billings of MindShare, greater associated benefits both for purpose. Mediacom, Maxus, and MEC), which advertisers and the media agency also controls Xaxis, WPP’s digital networks themselves. In this section, we consider each of trading business. these issues in turn and assess the Historically, the media markets were impact of them on advertisers. Profit margin pressures locally led with big players in TV dictating the market. Thanks to their Consolidating agency buying The buying groups are vital to audience size, they were virtual power the profitability of the marketing monopolies, such as CBS/NBC/ABC communications groups such in the US and TF1 in France. While The media agency market has as WPP. They deliver a much traditional media still command the consolidated remarkably over the stronger net operating margin than lion’s share of revenues, the shift last ten years and, although the any other part of those groups, to digital has been to the benefit planned merger of Publicis and thereby effectively subsidizing the of the global Silicon Valley players, Omnicom is no longer happening, other divisions, such as the thirsty and they will hold the key to TV as it the media trading market is already creative advertising agencies and becomes increasingly available via highly concentrated. notoriously unprofitable research the internet. divisions. They also handle the The six major marketing clients’ money. The big buying groups are more communications groups account than happy to trade with the global for over 60% of global advertising The media transaction market is digital giants on a worldwide spend, which amounts to some unusual in that the media agencies basis, with associated benefits $500 billion, including the long act as principals in the transaction for advertisers and for the buying tail of small advertisers. Between and, therefore, control the cash flow. groups as well. them, WPP, Omnicom, and Publicis In this way they are able to control command over two thirds of the both the buying terms and the Meanwhile, the big buying groups US market (source: RECMA). This is money flows throughout the media provide a range of services to the unparalleled purchasing power in a trading eco-system. All of the big individual media agencies, normally market which is rapidly globalizing, groups have well-equipped treasury for a cross-charge, but they have and in which the big digital players functions, handling millions of multiple sources of income derived such as Facebook command a dollars of cash every day and using from media trading, and little or no growing share. this to drive additional income. income directly from clients.

p6 // A CLEARER PICTURE - Accountability and transparency in media today “Advertisers encounter the most significant difficulties in achieving transparency in their online media-trading activities.”

They can and do negotiate The media agencies themselves Transparency in the digital significant benefits for themselves. manage the client relationship and market They negotiate Agency Volume collect fees and commissions from Bonuses (AVBs or rebates), free clients, but the bigger media vendor This unsatisfactory lack of media inventory, extended payment deals are struck by the buying transparency makes the terms, and a range of other groups, often on an aggregated measurement of media performance advantages. Individual advertisers volume or share basis across all and value harder to achieve without are often entirely unaware of these clients. These deals should offer more stringent contractual audit benefits and frequently do not clients improved terms and thereby rights, but the situation is even more share in them, depending on their better value, but they are also serious in the world of digital media, contract with the media agency frequently a source of additional where the eco-system is even more and its associated parties, and their income for the media buying complex (see Figure 1. A simplified contractual rights of audit. groups, through rebates and other version of the online eco-system). forms of undisclosed benefits.

MEDIA AGENCY DEMAND INVENTORY CLIENT AGENCY TRADING SIDE AGGREGATORS PUBLISHERS DESK PLATFORM

BUYING DATA GROUP PLATFORMS

Figure 1. A simplified version of the online eco-system

p7 // A CLEARER PICTURE - Accountability and transparency in media today The new online trading eco-system • Planning a cost-per-thousand contractual right of transparency in is very complicated, with multiple (CPM) for campaigns which is the process. technology-led intermediaries substantially in excess of the rate providing services to the end users being secured in the market. The danger is that media agencies – both clients and media vendors • Receiving volume-related rebates and associated parties may make – wrapped up in hugely intricate from their Demand Side Platform even greater profits from real-time layers of process. The result is that (DSP) partners. bidding and automated trading. The advertisers encounter the most early experience in this emerging • Accepting volume-related significant difficulties in achieving area is that automated trading leads deals from media vendors, ad transparency in their online media- to a low CPM model winning out exchanges, and ad networks. trading activities. over more sophisticated trading • Marking up rates charged by third mechanisms. In November 2013, the advertiser party data providers. association body in the UK This in turn can lead to: Given the range of options available, (ISBA) asked its members if they • Advertising inventory appearing considered their online media it is not unknown for the agency groups to be able to achieve fees in inappropriate or badly targeted buying process to be transparent. environments. The result was overwhelming with and commissions amounting to 82% saying “no.” as much as 50% of the client’s net • Low levels of viewability in long media spend. tail inventory (i.e. advertising that In the complex eco-system of the is not effectively displayed on a digital world, media agencies have Contractual rights and wrongs web page for long enough to be myriad ways to potentially increase seen). Contractually, much of this is their revenue in a way that is not • Windfall profits being made from visible to advertisers, including: invisible to the client. In fact, the audit rights that advertisers enjoy ad-serving mark-ups on higher • Buying ‘inventory’ media in traditional media are often impression totals. wholesale from media vendors, specifically excluded in the digital In digital channels, it isn’t just a sold on at an invisible mark-up media process. Consequently, to clients – a process known as question of visibility of money flows; most clients remain unaware of the arbitrage. This is increasingly it’s also about the customer data additional income being made by a feature of traditional media that is produced continuously and the various parties – particularly buying, too. which is the lifeblood of modern-day media agencies and groups – in the • Charging clients the full rate for marketing. Advertisers report that online world. campaign delivery even where they often do not feel they have there has been under-delivery Programmatic buying and real-time sufficient control over their first- which should be declared to bidding should, in theory, produce party data, namely data produced clients. great improvements in both the from their digital activities through • Charging a rate for ad serving cost-efficiency of advertising and tracking technologies. These are (i.e. delivery of advertising) which process, but it is hard for advertisers often stored in Data Management is substantially in excess of the to judge that they are receiving Platforms, which in turn are often wholesale rate charged by the the full benefits if they do not have controlled by agencies. agency’s providers.

p8 // A CLEARER PICTURE - Accountability and transparency in media today “This can lead to the client paying performance-related fees based on a buying performance subsidized by the self-same rebates to which the client may have been entitled.”

Given the complexity of the as the data, systems, strategic and their own return via performance- technological chain (known administration resources of well- related fees. as the ad stack), it is also vital equipped businesses. that advertisers know that the These are not the only areas of technology being employed is However, the eco-system also concern for the advertiser. The correctly configured to measure carries a number of potential risks consolidation of enormous buying and optimize performance and for the advertiser: power into only six significant deliver accurate data throughout the groups has had knock-on effects on • Media planning may be led by system. Without transparent access other aspects of the market: deals, rather than brand- or to the technology being employed consumer-led considerations. • Media vendors, weakened by and the data produced, advertisers the economic downturn, are simply cannot tell whether this is • It creates the conditions for vulnerable to agency power, happening or not. contractual obfuscation and a reducing yields and leading to ‘walled garden’ which is invisible disinvestment in high quality In short, at a time when to the advertiser. content which attracts volume technological advances have or addresses hard-to-reach increased the accountability of • The individual needs of each audiences. advertising to unprecedented client may be subsumed within levels, the advertisers themselves the group deal, with loss of • The buying groups are able to report that they feel they are not planning sensitivity by clients or negotiate cross-media deals getting the benefits of accountability brands. which can distort the market by, due to a lack of performance and for example, paying more for one • The frontline media agency is financial transparency in the digital property and less for another (to itself remote from the trading trading process. Worse still, many maximize fees). interface and may not know what advertisers feel that their interests deals have been struck and what • The groups are able to offer are not always aligned with the big this means for the client. highly attractive prices to win agency groups and that they are business, but at the expense of contractually locked out of having • The advertiser may be unaware other clients and sometimes at clear sight of what is happening to of the rebates and other benefits unsustainable rates. their data and their money. that have been negotiated with • Agency choice has reduced, the media vendor and may not with terms of business controlled The impact on advertisers be contractually entitled to their by the buying groups, not the share of such benefits in any While this situation is acute in digital, frontline agencies. case. it is important to note that the lack of transparency applies throughout • The client may not be receiving Another concern is that the media the media trading process. This the full value of the deals being agencies use AVBs (often in the agency group trading structure struck on their behalf. form of free space) to subsidize can and does provide significant media discounts or pricing, often benefits to advertisers, who enjoy • The buying group may have the cost-per-rating-point (CPRP). This the advantages of the purchasing ability to move discounts from can lead to the client paying power of the big groups, as well one client to another to maximize performance-related fees based on

p9 // A CLEARER PICTURE - Accountability and transparency in media today a buying performance subsidized by the self-same rebates to which the client may have been entitled, depending on the client/agency contract.

The problem in summary

In summary, the large marketing communications holding companies, and their buying groups, have a strong hold over the media transaction process, and their power is growing as the industry continues to consolidate.

The buying groups bring benefits to clients through better buying conditions and other resources, but they do not provide an open, transparent, and clear reporting process for media delivery, performance, and data and money flows. As a result, advertisers are not able to judge the amount of money being made by the agencies through the use of the client’s budget and data.

This is not about transparency for transparency’s sake, or about pure effectiveness, but about making brand communications as powerful as possible to everyone’s benefit.

p10 // A CLEARER PICTURE - Accountability and transparency in media today “The key to digital performance measurement lies in having the right technology to track and measure people’s THE SOLUTION online journeys.” How advertisers take back control

So far, this document has described • Independent, objective, The value of independence is the extent of changes in the media accurate measurement of media increasing. As we have seen, the market and how advertisers benefit performance and value, whatever media markets are more opaque from agency consolidation, but the channel. than ever and advertisers require also how they are not seeing the assistance in countering the low • The best, most thorough and full advantages of the new media levels of transparency. But they also technologically advanced data landscape. need data, software, expertise, and analytics tools using the right experience to help them objectively technology to ensure accurate The question therefore is: measure the performance of their and timely analytics. What should advertisers do to media and their agencies. tackle these issues and achieve • Ownership and control over their accountability with transparency, data to optimize and personalize This is especially important in the and maximize the effectiveness marketing messages. digital world, where even some of of their advertising and ‘working’ the basics of performance delivery • The right contractual framework budgets? are underreported by some which delivers true transparency agencies, including the extent to of data and money flows We believe the answer is fourfold. which the advertiser’s activity has throughout the trading system. Advertisers should: been exposed. • The best possible remuneration • Concentrate on measuring and reward model for their The traditional primary technique and optimizing the return on agency partners and associated for offline media measurement is investment from their advertising parties. cost and quality benchmarking activities. The measurement of via aggregated and anonymized media performance and value These resources are a good place pooling of actual client bought data. should be the main priority. to start. This section describes This allows advertisers to compare in detail how to deploy them • Aim to achieve transparency their own performance against and achieve the objective of of their data and money flows the market rate, and these data accountability and transparency. through the entire trading eco- can be used to set performance system. improvement targets and reward the Independent performance media agency. • Ensure ownership of, and control measurement over, their data. While media benchmarking via The principles of independent cost pooling has been around • Agree payment and incentive media value measurement have since the 1970s, it has been since systems to reward better been established for decades. supplemented by a range of other advertising performance and Normally, of course, this is referred analytical techniques which aim encourage transparency. to as media benchmarking and/ to help advertisers independently or auditing, but this expression verify the performance and value of In order to achieve these objectives, does not do justice to the range their media investments. and maximize ROI in media, today’s of measurement options available brand owners need five vital to clients in the new media One main trend is toward the resources: environment. measurement of actual business

Continued on page 14

p11 // A CLEARER PICTURE - Accountability and transparency in media today AGENCY TRADING A complicated digital landscape that’s actually quite simple Media DESK ADVERTISERS

MEDIA AGENCY DEMAND INVENTORY BRAND MEDIA BUYING CLIENT AGENCY TRADING SIDE AGGREGATORS PUBLISHERS transparency - DESK PLATFORM OWNER AGENCY GROUP A visual AGENCIES AD SERVERS AGENCY CREATIVE RETARGETING VERIFICATION VIEWABILITY BUYING DATA MEDIA FINANCIAL MEDIA TRADING DESKS OPTIMIZATION TOOLS / PRIVACY GROUP PLATFORMS overview AUDIT AUDIT VENDOR MEDIA PLANNING TAG DSPs & ATTRIBUTION MANAGEMENT • In the era of group media buying companies, transparency is one of the most important challenges facing advertisers in The current media trading 2014. DATA DMPs & DATA MEASUREMENT EXCHANGES KEY POINT: The lack of transparency covers delivery, • Recently, Ebiquity has seen a rise in media agencies eco-system is non-transparent SUPPLIERS AGGREGATORS & ANALYTICS seeking to limit the amount of information that advertisers performance, and financial clarity – even basics such as can see, particularly around digital trading desks and data. appearance validation are not well developed KEY POINT: Right to audit now needs to cover SHARING DATA MEDIA MGMT SYSTEMS AD NETWORKS • Ownership of data and information in particular has the full transactional cycle / SOCIAL TOOLS & OPERATIONS Links to further reading: become a pressing issue that the industry has historically ‘Publicom’: ‘plus ça change…’: not understood, sometimes overlooked, and certainly Links to further reading: Data access – the not tackled effectively. AD PUBLISHER key to transparency: SSPs SERVERS TOOLS http://blog.ebiquity.com/2014/05/ Here we’ve laid out some trading models, advice, publicom-plus-ca-change

and insights to help you further understand the http://ebiquityopinion.com/2013/06/data- access-the-key-to-transparency important issue of transparency. PUBLISHERS

Agency Trading Desks (ATDs) / The Finances Ad serving Where do the digital super- Programmatic buying • Agencies may pay • Global deals have reduced agency rate profits come from? What’s on actual delivery but • Driving down CPMs, driving up agency margins charge on planned: • Rich media formats = higher margins • Ad-serving mark-ups sometimes reconciled in happening • A classic arbitrage opportunity, reselling at margins • Ad-serving costs stack up on low CPM • Media owner rebates of up to 75% Finance only and CPA deals • Agency Trading Desks, Real-time Bidding, • Adserving costs going up as CPMs go down and • Ad-serving costs also • Set-up costs can be double-counted Programmatic margins from multiple sources in digital? more inventory is purchased not reconciled • Ad-serving costs incurred even with low • Invisible deals can limit choice of vendor • ‘Double-dip’ attribution where multiple agencies • Time-cost monitoring/ viewability scores (you still pay ad-serving employed or not-deduped reconciliation unreliable fees even if your advertising is not seen) • The ATD/DSP trading connection • Margin on data and supplier costs Legalities: Access of data & information

Access of data & information is of growing • Databases can qualify for a range of legal 1. Independent and accurate measurement of media delivery, performance, and value importance because of the huge amount of data protections, which can include confidentiality, and analytics generated by digital advertising. copyright, and database rights. 2. The right data analytics tools across the full range of channels Key points: • Media agencies continue to try to include an obligation in the client/agency agreement that 3. Full contractual data ownership and control Just because an advertiser pays a media agency • requires a confidentiality agreement with the for its services, that does not necessarily mean client’s auditor. The scope of this agreement What should that the data and information collected and 4. The right remuneration structure, with incentivization on transparent KPIs needs to be managed. collated by the agency in relation to the advertiser’s advertising is owned by or • Rebates, discounts, and unbilled media should advertisers DO?: 5. The right contract: ‘Gold Standard’ wording, constantly updated even fully accessible by the advertiser, be highlighted or set out in your contract (details Download and these questions will depend on agency volume bonuses should be clearly An online version of this visual on the wording of agency/client stated). overview is available to download The five-point http://ebiquityopinion. contract. Link to further reading and share at http://blog.ebiquity. com/2013/06/the-ins-and- • Audit rights must be clearly stated in your agency The ins and outs of contracts: com/2014/03/accountability-and- plan outs-of-agency-contracts contract – if they are not it will affect the right to transparency-an-ebiquity-guide audit and therefore decrease transparency.

p12 // A CLEARER PICTURE - Accountability and transparency in media today p12 // A CLEARER PICTURE - Accountability and transparency in media today p13 // A CLEARER PICTURE - Accountability and transparency in media today AGENCY TRADING A complicated digital landscape that’s actually quite simple Media DESK ADVERTISERS

p13 // A CLEARER PICTURE - Accountability and transparency in media today p12 // A CLEARER PICTURE - Accountability and transparency in media today p13 // A CLEARER PICTURE - Accountability and transparency in media today “Benchmarking the viewability of your ads is a vital step in the process of reducing the wastage in digital investment and ensuring improved performance of ads.”

Continued from page 11 performance, rather than just The third significant development seen by users in an active browser value. The recent past has seen a is the new generation of digital area – a very distinct and important move toward the use of modeling measurement tools which respond difference. In an age of minimal techniques that identify the key to the advertiser’s need for transparency in the buying eco- media drivers of performance, independent insights into the most system, there is a significant risk ascribing a return-on-investment measurable channels, but the that advertisers could be paying a score to media channels ones with the most complexity and considerable amount of money to (individually and together) within the opacity. media suppliers while ads are not marketing mix. This allows for the even reaching consumers. more effective allocation of budget The key to digital performance between channels and within measurement lies in having the right It’s important to highlight that, while channels, including the distribution technology to track and measure the currency for buying display within digital between search, social, people’s online journeys, and inventory is still calculated on online display, and other options. this is normally done via ‘tagging’ impressions being served, to deliver methodologies, usually inserted into 100% viewability on any campaign More significantly perhaps has the coding for ads being delivered is an unrealistic expectation. This is been the emergence of media through ad servers. because publishers do not manage measurement techniques which their yield in a way that would identify the trend in absolute media Tagging allows advertisers to track enable this to be profitable for them. quality and cost, either year-on- their chosen audiences across However, this does not mean that year or against predetermined multiple channels and devices viewability is any less important. In agency guarantees, often derived and build up a profile of people’s fact, it is increasingly becoming an from pitches. These techniques personality, interests, and habits. It important key performance indicator rely heavily on software systems also allows a highly detailed ‘read’ in the measurement of quality in the capable of ingesting vast quantities of their digital activity via ‘cookies’ digital space. of data accurately and producing and other forms of tracking (e.g., actionable reports. ‘fingerprinting’). Benchmarking the viewability of your ads is a vital step in the This trend has been led by With the right tracking process of reducing the wastage international procurement teams methodologies, advertisers can in digital investment and ensuring wishing to isolate real savings or see where their advertising was improved performance of ads additional media value on a multi- displayed, for how long and who (through better engagement or market basis, especially in tough saw it, facilitating attribution of increased actions being taken). economic times. While this can lead effect which leads to optimization Ebiquity research undertaken over to a relatively uniform approach to a and, ultimately, better bidding in the last 18 months suggests that as sophisticated subject, it can produce programmatic. many as 35% of all ads go unseen significant savings when correctly by consumers and yet are paid for applied, and it helps advertisers Digital display is traditionally paid for by advertisers. Some advertisers control their budgets. This is on an ad-served basis. Advertisers see as much as $750k (€500k) of especially true if media inflation is a pay for the total number of ads that investment in any given campaign significant market factor. are placed on a user’s screen, not being delivered to an audience that for the number of ads that could be just doesn’t have the opportunity to

p14 // A CLEARER PICTURE - Accountability and transparency in media today “It is imperative that advertisers regain confidence in the ability of digital media to deliver a risk-free and transparent means by which to communicate with consumers.”

see the ad, let alone engage with it communication process, advertisers imperative that advertisers regain in any way. are increasingly at risk of their confidence in the ability of digital ads appearing in places that, at media to deliver a risk-free and By benchmarking viewability best, are not targeted in the most transparent means by which to advertisers can feel more confident appropriate manner and, at worst, communicate with consumers. that their investment is being are undesirable placements due to managed in an effective manner associated content and context. Checks and balances need to and, coupled with brand safety be put in place to ensure that initiatives, a more transparent The trade-off has always been the risks are being mitigated. trading landscape can be created. clear. By driving price down, you Through the use of tagging compromise the control you technology, advertisers can lift Brand safety in the digital space have over where you appear: a the veil on this opaque eco- comes in many forms, but sacrifice many advertisers have system, identifying where ads fundamental to the principles of been happy to accept in order to have been served, particularly brand safety is having transparency maximize media efficiency. But through DSPs and trading desks. over where your ads are appearing. with the intensified practice of This will give advertisers the ability In an eco-system increasingly AVBs and mark-ups, the industry to independently verify that the underpinned by platforms and is seeing increased occurrences appropriate inventory was used to technologies (DSPs, ad exchanges, of brands put at risk by appearing reach desired audiences and deliver and ad networks) that dilute in undesirable areas as the market effective digital communications. the direct agency/publisher becomes more opaque. It is

-MOBILE- -PRINT- -AFFILIATES-

-SOCIAL- -RADIO-

-DATA -TV- WAREHOUSE-

-DIRECT MAIL- -WEB- MULTI-CHANNEL -COUPONS- ANALYTICS CONSULTING -BANNER -RETAIL- ADS- -POS-

-CALL -EMAIL- CENTER-

-VOICE OF -PPC- CUSTOMER- Figure 2. Multi-channel -VIDEO- -CRM- options proliferate for the modern advertiser

p15 // A CLEARER PICTURE - Accountability and transparency in media today “The thought process should revolve around selecting the right suite of solutions that best enables the organization to answer the questions that the business is asking.”

One of the principal causes of the Data analytics technology Innovation is at an all-time high for lack of transparency in the digital digital analytics and measurement. market is the interdependency As outlined above, it is critical in the Much of this is driven by the impacts of the supply chain. The different new media landscape to employ the of the continued investment and parties in the eco-system (trading best technology to fuel advertising evolution of the social and mobile desks, demand side platforms, programs. Furthermore, the multi- channels. With that comes the need supply-side, and vendors) are all channel focus of organizations to avoid data overload and instead part of a system that is funded continues to expand and create a focus on getting the right data, to by the advertiser, but not overtly. much more complicated landscape, the right people, at the right time. And the currency that is used as shown in Figure 2. (CPM) encourages the tendency to The entire purpose for collecting maximize impression count, rather The call to action for organizations data is to generate insights than optimizing effectiveness. is data ownership across all of and ultimately improve the user their channels. This requires experience. The main objective all For this reason, among others, it is strategic thinking geared toward organizations should strive toward important for advertisers to have an selecting the best and most scalable is to build an optimized experience independent source of performance technological offerings for analytics for each individual as they interact measurement and transparency and data collection across all of across the variety of channels control. these channels. in play. That obviously cannot happen overnight, but having Whereas ‘media auditing’ has Gone are the days where an these organizational goals in sight hitherto been a retrospective organization should look to can help to ensure that the right activity, and value-based, a new centralize within one analytics tool technological decisions are made in model is emerging which is for all of their business needs. advance of the need. performance-led, with optimization Instead, the thought process at its heart, and ‘real-time.’ The should revolve around selecting The ideal approach to action is tagging and tracking methodologies the right suite of solutions that best to crawl before you try to run. So available in the market now can enables the organization to answer many organizations try to solve inform and influence delivery and the questions that the business is simple problems with a complex performance, especially in RTB asking. solution that quickly lengthens where they help sharpen the the time to value and increases bidding parameters. One of the biggest mistakes made pressure on the program. A more during a vendor selection process methodical approach for achieving And independence of tracking is for analytics is making a decision the ultimate objective will lessen key in any market where buying based upon the current state of the pressure and better allow for a and selling will drive commercial affairs while ignoring the direction more comprehensive approach to interests, especially where the and goals of the program long term. selecting the correct technology. base currency encourages Too often, we see organizations commoditization. hamstrung by their technological The challenges in our industry are decisions a year or two into their not going to get any easier. The planning that are then forced to number of ways customers can remove the technology and start over. interact with your business will

p16 // A CLEARER PICTURE - Accountability and transparency in media today “Data ownership will continue to be a hot issue as agencies aim to assert control over data as a valuable asset; brand owners will need to move quickly to keep up with this rapidly growing area.”

continue to evolve and become The data stored in DMPs constitute issue as agencies aim to assert more complex. It’s therefore critical the most valuable asset for today’s control over data as a valuable that technological investments are brand owners and, as such, they asset; brand owners will need to founded within the current and need to maintain complete control move quickly to keep up with this future business requirements of over this data. The data flows in rapidly growing area. the organization and that those from many sources, from multiple investments empower you with data agency partners, but also from Getting the right contract ownership along the way. second- and third-party sources, and it is this rich blend of data The issue of data and financial Ownership and control of which permits the hugely effective transparency can be a difficult one data personalization opportunities for advertisers to manage. The offered by digital channels. relationship between a company In the digital world, data is Big. As and its partner agencies is an people leave their digital footprints, Consequently, advertisers need to important one, relying on close tracking technology can monitor ensure that they have the following day-to-day operations. Therefore and measure people’s unique and in place: the only concrete way to deal with individual use of platforms and build the issue of accountability and • The right technological an accurate picture of behavior. transparency is through the right infrastructure to collect, These data can be used en masse contractual relationship between the amalgamate, and store all of the or individually to optimize and advertiser and the agency, and this various data feeds. personalize marketing messages must be agreed in full between the on any addressable platform, often • The right analytics tools to make parties. The contract also needs to dynamically and in real-time. sense of the data and use it to protect the rights of the advertiser improve marketing performance. toward its other third-party partners, In fact, intelligent understanding such as its appointed independent and manipulation of data allows • Full contractual ownership of all data analytics providers. brand owners to target and retarget the data that is generated by customer groups, and actually their marketing activities and The principal terms that need to be reduces their reliance on paid-for retargeting data. covered in such contracts are as messaging. The reuse of data is follows: one of the major marketing tools of • Full control over the data • The process by which the today’s landscape. management platform and process, including contractual advertiser wishes to measure However, the terabytes of data rights and technological rights. their media performance must thus produced need to be stored, be precisely set out, with the analyzed, and updated continuously. Many advertisers are looking for necessary data and money This is primarily achieved through a safe harbor for their data which access rights recorded in detail. protects their ownership and control Data Management Platforms (DMPs), • If the advertiser wishes to achieve which are the engine of the entire of the DMP and associated assets, outside of the agency eco-system. full transparency for data and digital marketing eco-system and money flows, the contract needs critical to success. There can be little doubt that data ownership will continue to be a hot to cover the full transactional

p17 // A CLEARER PICTURE - Accountability and transparency in media today “These contract elements may, at first sight, be daunting but they are important in establishing an unambiguous framework for accountability and transparency.”

chain. This means that the • Clients also need to ensure that Agency remuneration and agency counterparties need to their chosen auditors have the reward include affiliates, associates, and right access to data for auditing subcontractors, as well as the purposes even where such data It is often said that agencies earn contracting agency. comes from a third party (e.g., a hidden income to compensate TV audience provider), where the for the downward pressure on • The client also needs to gain client’s rights to such data extend fees and commissions caused by visibility of the actual rate paid by to their audit partner. the economic downturn and the the various parties throughout the procurement squeeze. Leaving transactional process if they wish • Crucially, confidentiality must aside the ethics of this, advertisers to avoid paying an unseen mark- be enshrined within the do need to be clear on the margins up on inventory media. obligations of all parties. This that agencies are making on their means that the advertiser’s business. • If the advertiser aims to reclaim rights to confidentiality must be their fair share of all agency recognized through their contract In fact, clients cannot really insist benefits negotiated on their with their auditors as well as their on complete transparency if they behalf, they need to include all agency partners. In turn, the latter don’t also ensure a transparent fee such rebates, discounts, and need to treat the client’s audit arrangement; the relationship needs commissions, including unpaid for reports with care and not use to be a reciprocal and fair one, space, early payment discounts, them, for example, in negotiations based on precise contractual terms bonus inventory, barter deals, and with media vendors. for all parties. any such trading mechanism. • Clients should also ensure There has been a long-running • The media agency contract that they have full right of debate concerning fees versus should also seek to provide appointment of their audit partner, commission, and the relative merits an audit trail for arrangements whatever the audit need, and of each, but this has been made between the media agency the data and audit access rights more complex by the changes in the group and media vendors for required by the client of its media landscape. It is no longer an services which may be another auditors should be mirrored in industry where spend predominates, form of rebate, often in the form the client’s agreement with the and many of the newer channels of a service level agreement agency. are light on expenditure but long on which imposes only the lightest of ideas and complex solutions. obligations on the media agency. These contract elements may, at In fact, the modern media scene first sight, be daunting but they • The contract needs to fully demands of media agencies a are important in establishing cover all data and money audit different approach to their business an unambiguous framework for access rights and establish the model. The labor intensiveness accountability and transparency. It client’s ownership of the relevant of content-led channels and the is important that these are agreed data, including all media trading additional workload in digital contractually so that all parties are information and consumer analytics do indeed warrant a crystal clear on their obligations data generated through digital properly funded fee structure, from the outset. activities, including first-party and especially to give clients the third-party data. advantage of the best agency talent.

p18 // A CLEARER PICTURE - Accountability and transparency in media today “The modern media scene demands of media agencies a different approach to their business model.”

One of the problems created by the will not be double-counted. inflate performance. Examples of new trading eco-system is that the this would include multi-platform additional income being generated • Remuneration and reward discount manipulation and using does not go to the frontline agency programs should recognize the rebates to subsidize discounts. to help it fund the broader range of role played by subcontractors, services it needs. While the agency especially in digital media, with • Clients should aim to have may indirectly benefit in many agreed protocols for revenue a clear year-end view of the instances, much of the new margin shares. margins made by their agency goes to the buying groups. but so too their contribution to • Reward programs should business success. Some degree be linked to the disciplines. Consequently advertisers should of business performance-based Performance-related fee seek to achieve the following from reward should ideally be made arrangements for media buying their remuneration and reward at year-end, with the agency do not in themselves guarantee programs with their media agencies: benefiting or not from the client’s that the frontline agency will business fortunes. • Best practice is to aim for reinvest such bonuses in other complete transparency, with areas, so the ideal fee structure • While media awards are not precise data and money will have reward schemes based in themselves a business aim, protocols, with complete on agreed KPIs for each major success in awards (especially and clear audit rights, and to media channel. This should not internationally) should form part incentivize the frontline agency be structured purely around an of the assessment criteria. appropriately. Transparency will appraisal process, but should lead to the people performing on also be based on measurable The Holy Grail of the advertising a client’s behalf being rewarded criteria, ideally business results- industry is to achieve the double for neutrality and more of the led rather than on media metrics. benefit of the accountability of income reaching the frontline Care should be taken to check data-rich media with complete agency. that online clicks and social transparency over the transactional media ‘likes’ are de-duplicated to process. The objective is to • An operating margin should avoid artificial traffic. improve return on investment be agreed at the outset, with a by ensuring that investment is sliding scale to reward superior • While there is every reason to maximized in working budgets, performance. This should be continue to reward superior with minimal loss of effectiveness broken up by agency discipline performance in TV buying, through unnecessary costs. (e.g., search, social media) with clients should aim to incentivize a clear picture of the people innovative and non-traditional involved in the business delivery. uses of TV and allow flexibility The level of seniority should be of targeting. As such, the audit established from the outset, with program should not prevent the realistic estimates of time spent media agency from taking a more and defined audit protocols. flexible approach. Equally, the Media agencies should be asked rewards program should stop the to warrant that their people’s time agency using artificial tactics to

p19 // A CLEARER PICTURE - Accountability and transparency in media today THE MAIN POINTS AGAIN

The issue of accountability and transparency is both complex and sensitive, and debate about this issue is often a subject of opinion rather than fact. Too often the issue is dominated by the controversial subject of transparency, more than the measurement of performance.

The objective of this guide has been to bring a level of balance to this conversation and provide a set of best practice guidelines for advertisers in the new media landscape. Many of the established practices of the ‘analogue’ world are no longer right for the changed media landscape, but the transition to new metrics has not yet happened. Advertisers are not happy at the perceived lack of transparency in the market, but it is in their power to address this issue through the right strategy and processes.

We are convinced that this guide will help to deliver a clearer and more contemporary way of bringing accountability and transparency to the market. Please feel free to share it with colleagues. Further reading on the issue can be found on the Ebiquity blog (blog.ebiquity. com)

p20 // A CLEARER PICTURE - Accountability and transparency in media today GLOSSARY

AVBs Agency Volume Bonuses rebates paid to media agencies for (high) volume of media transactions, particularly in digital media.

CPM Cost Per Mille i.e., the cost per 1000 views.

CPRP Cost Per Rating Point the average cost of achieving one commercial rating point, i.e., advertising gross rating point (GRP).

DMP Data Management a system that stores and can interrogate the huge quantities of data Platform produced by consumers and left as a series of highly targetable digital footprints. The engine of the entire digital marketing eco- system.

DSP Demand Side Platform a system permitting those who buy digital advertising inventory to manage multiple streams of purchase via a single platform.

RTB Real-Time Bidding an automated system for trading digital display advertising, where buyers and sellers are matched according to preset criteria.

p21 // A CLEARER PICTURE - Accountability and transparency in media today ABOUT THE AUTHOR

Nick Manning is President, International, at Ebiquity, the independent marketing performance specialists, delivering greater brand and business performance through data-driven insights.

Before joining Ebiquity in 2007, Nick spent 27 years in the media agency world. In 1990 he co- founded Manning Gottlieb Media, which became one of the most highly respected and fastest- growing media specialist agencies. It became part of Omnicom in 1997. Nick’s most recent position was CEO of OMD’s UK operation. He also co-founded OPera, the media negotiation arm for OMD and PHD.

Since joining Ebiquity, Nick has overseen the expansion of the company to become a global partner for over 1000 clients, offering Market Intelligence, Media Value Measurement, and Marketing Performance Optimization services through Ebiquity’s offices in 15 countries.

CONTRIBUTORS

Federica Aperio is Ebiquity’s International Digital Practice Leader

Bill Bruno is CEO of Stratigent, part of Ebiquity plc p22 // A CLEARER PICTURE - Accountability and transparency in media today ABOUT EBIQUITY

Ebiquity are independent marketing performance specialists. We enable over 1200 brands across the world, including over 90% of the top 100 advertisers, to make better informed decisions and to improve their brand and business performance. We enhance their capabilities, improve accountability, and foster greater transparency with their agency partners.

Our international market-leadership in media value measurement means that we have the largest media cost and quality pools, while our transactional independence ensures we provide our clients with truly objective advice. We have offices in 15 countries with a wider network of leading independent associates covering all main media markets globally.

We have unparalleled knowledge of and exposure to agency contracts, practices, and performance.

p23 // A CLEARER PICTURE - Accountability and transparency in media today ebiquity.com blog.ebiquity.com @ebiquityglobal [email protected] p24 // A CLEARER PICTURE - Accountability and transparency in media today