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Media agencies are also ‘walled gardens’ says former Motorola regional CMO

Media agencies are “walled gardens” in how they buy media for their clients, a former regional CMO has said as debate continues around the transparency of trading practices.

Speaking with Mumbrella Asia in the wake of the Dentsu over-billing scandal in Japan, Ian Chapman-Banks, a former regional Motorola, Apple and Dell marketer, used a term usually reserved for the likes of Google and Facebook in his description of the agency sector, saying that squeezed margins have led to non-transparent practices in media buying.

Ian Chapman-Banks

Ian Chapman-Banks: ‘Margins are hard to come by, hence programmatic black boxes”

“The agency business right now is a walled garden, because the way that people are using data is not uniform,” he said.

“Data is not easily accessible by everybody all the way through the system. And that’s why there are issues over transparency,” said Chapman-Banks, who suggested that soon media trading could be subject to the same level of scrutiny financial services are now facing.

“Margins are really hard to come by, hence… programmatic black boxes and people not understanding what the rebates [on media] are. It’s tough,” he said.

Chapman-Banks is co-founder of Sqreen, a data analytics firm that uses artificial intelligence to screen large companies, particularly banks, for fraud.

He said that AI could transform the way media agencies buy digital media for their clients, and weed out what Dentsu described last week as “inappropriate operations” involving 111 clients.

“Right now, in the advertising business, if you think of it like a stock market that’s going up and down, prices are changing. If you could see that happening by the second, that level of transparency would dramatically change the business model.”

Financial adviser looking at figures with magnifying glass

Both clients and agencies would benefit, he said.

“If we were to put this level of transparency all the way through the process, what happened with Dentsu and Toyota could not happen,” he said.

“It’s in everybody’s interest to do it [embrace transparency] if they think about it in a very logical way, but no one will take first step. This is why ad fraud exits.”

“The reason ad fraud exists is that the brands don’t know what to do, because they don’t have the data. That’s the issue,” he said.

“The brand owner can’t see what websites the ads are running on, so the agency says ‘these sites are a good idea’ – and that’s where the dark art comes in,” he said.

Chapman-Banks suggested that some media agencies are wary of AI, not only because it would bring greater transparency to the more opaque side of media trading, but because it could replace much of traditional media planning.

“Today, anyone could go to any brand in Singapore and say here’s your media plan, go and buy it, with no skills or experience, because an AI engine would do it for them. All they have to do is buy the media. That’s what’s going to happen with media planning. The media buying side is terrified of this.”

“Why? Because programmatic is carpet-bombing with 50,000 ad impressions each second and they still can’t get over a 1-2% clickthrough rate. If you’re expecting a different outcome, you shouldn’t do the same thing every day,” he said.

Chapman-Banks said there are two areas where AI will benefit media trading – by making the process more efficient, and also more transparent.

At the beginning of the discussion, he noted: “How the ad industry works now around the transparency of buying and selling… if you did this in financial services, you’d go to jail. It’s all a black box.”

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