Endlessly debating the transparency of programmatic won’t rebuild trust
Comparing programmatic with the supply chains of automotive manufacturers isn’t going to get us where we need to be: back in the consumer’s good books. PwC’s Ben Shepherd explains.
There is no issue with more heat in the advertising industry right now than transparency. It’s hot locally. It’s hot globally. It’s being discussed daily in boardrooms and the media.
So, I was somewhat surprised to see an op-ed on Mumbrella questioning the motives behind “the programmatic witch hunt” the same week the World Federation of Advertisers released data that should have sent yet another shockwave through the industry.
Toby Hemming wrote a defence of what he called “mar-tech” companies and their margins and business model, arguing that “unless we expect Samsung, Apple or indeed any successful business to start providing a detailed breakdown of their profit margins on the price tags of their products, we might want to cut the programmatic industry a break.”
Toby Hemming: Defended programmatic
As the industry likes to do we have over-complicated this issue. The issue is that you have agencies pretending to be martech, while martech are pretending to be agencies &/or media suppliers.
To start with let’s be clear on who we are.
I’m an Agency – Then you must disclose your fees versus your external hard media or martech/data costs, this disclosure is what makes you an “agency”
I’m in Martech – Be clear to clients that you are not an agency or a media supplier, and be transparent about your own tech and data costs versus the media costs
I’m a Media supplier – Value your audience and don’t disclose your margins
I’m a Trading Desk – You are not real, you’re just an agency that is pretending to be a mash-up of martech/media supplier so you don’t have to disclose your fees
The problem I have with this entire debate is that “transparency” has somehow become an outcome. Working in an agency, outcomes are tangible things like leads, sales, aided awareness, intent uplift, etc etc. Transparency, when viewed as a means to improve an outcome, is great, but when it is viewed as the outcome itself… then both sides have badly stuffed things up.
I think that is the frustration that Toby H was channeling. It’s the same frustration agencies who have built genuinely good products (even some non-disclosed ones) feel on a daily basis. But an opinion like that is kindling for a daft auditor looking to fan the flames of a debate like this that helps justify his obscene consultancy rates.
Of course the non-disclosed programmatic solutions that we at agencies have built (some very good, some very bad) and the full-service programmatic vendors flooding the market (all bad) are entirely to blame. Some bad acting and failure to set decent, independent, performance measurement frameworks that our clients can trust has led us here.
I just wish we could focus on real outcomes to lead us out…
@media agency cynic – I am not suggesting transparency is the outcome. That would be naive.
However it is an input into any outcome and there is clearly tension from the advertiser around the motivations of various elements of the supply chain.
Without that cleaning up you will never progress to discussions around outcomes. That requires trust. Something we don’t have much of at the moment.
It’s far from an auditor fanning the flames – just look around you and tell me otherwise.
Transparency is the only outcome that can lead to better trading.
Transparent and independent discussions lead to marketers understanding the market place, different tech offering benefits and how much programmatic media actually costs.
The conversation needs to start with transparent information and fact.Then we can move on to optimisation of tech, data, media buying.
Not allowing clients to audit media costs means there is a veil across the entire area of tech and media transactions.
Clients can currently only understand the space by taking the buying in house. Agency contracts don’t allow clients to see how the medium is transacted and the true tech fees that are associated.
Transparency is the only outcome that can lead to better trading.
Transparent and independent discussions lead to marketers understanding the market place, different tech offering benefits and how much programmatic media actually costs.
The conversation needs to start with transparent information and fact.Then we can move on to optimisation of tech, data, media buying.
Not allowing clients to audit media costs means there is a veil across the entire area of tech and media transactions.
Clients can currently only understand the space by taking the buying in house. Agency contracts don’t allow clients to see how the medium is transacted and the true tech fees that are associated.
Ben,
I have to agree that Toby’s article was a little misguided.
Transparency remains a major issue.
And it’s more than just the visibility of rates.
Another major issue is the forced separation that exists between marketers and those planning and buying programmatic activity.
Some Agency groups have deliberately kept the 2 arms length because of the ‘murky’ practices undertaken.
The rich understanding that marketers have of their customers and ways in which they can be influenced is lost in translation.
Campaigns are less efficient, performance hindered.
Some advertisers never see the people from the trading desk making selection decisions. They should be meeting weekly to discuss campaign performance and how to optimise future activity.
Ultimately non transparent and ‘murky’ behaviour is doing programmatic a huge disservice.