WFA Finds Transparency in Ad World is Finally Improving
Though the problem is far from being solved, a new study from the World Federation of Advertisers suggests that media suppliers and media buying agencies are finally beginning to take transparency seriously.
Though it didn’t reveal much that industry insiders weren’t already aware of, last year’s Association of National Advertisers’ (ANA) report on transparency — or the lack thereof — in American advertising made plenty of waves throughout the industry.
Among the report’s most troubling findings was the fact that media suppliers regularly provide rebates to media buying agencies amounting to anywhere from 1.67% to 20% of the total ad buy, which provides a significant incentive for agencies to ignore their clients’ best interests. Similarly, the report found that media buying agencies often tack on a substantial markup before passing purchased ad space along to clients.
But encouragingly, a new report from the World Federation of Advertisers (WFA) suggests that media providers and agencies have made a concerted effort to address many of these problems. Not only has transparency improved, but related issues pertaining to ad viewability and ad fraud have begun to subside as well.
More Transparency, Less Ad Fraud
The WFA report focuses primarily on 35 multinational media conglomerates with a combined annual marketing spend of over $30 billion. For context, companies spent roughly $72 billion on digital advertising in the United States in 2016.
According to the WFA, 65% of the companies surveyed reported taking internal actions in order to increase the transparency of their media buying and/or selling operations. One of the more common corrective actions appears to be hiring a Head of Programmatic Media. Given the mounting concerns about the programmatic buying and selling paradigm, this is certainly a step in the right direction.
Ad fraud is also on the agenda for many advertising organizations. 40% of the companies surveyed have begun to develop in-house structures and resources to combat ad fraud. For instance, 55% are limiting runs of exchange buys and 43% have moved away from metrics like CPM in favor of KPIs that are more directly tied to successful business outcomes for their clients. As with their brand safety efforts, companies have largely chosen to solicit external assistance in their crusade against ad fraud, with some 65% of respondents either currently working with or planning to work with a third-party verification partner.
Using an AI Marketing Platform to Reach the Next Level
The progress outlined by the WFA clearly represents a positive step for the advertising industry, and there’s no reason why this encouraging trend shouldn’t continue. That being said, at a certain point, the returns on each marginal push the industry makes towards transparency will diminish.
Consider, for example, one of the official recommendations that ANA made in the wake of its report:
Assess whether contract terms permit you to “follow the money” by having full accountability for every dollar that is invested with a media agency. It is recommended that audit rights cover not only the media agency but the holding company and any affiliated companies that touch your business.
This is certainly good advice, but achieving this kind of inside access to an agency’s internal operations is easier said than done. Even if a company manages to convince its agency to share the information needed to “follow the money,” there’s no guarantee that the company’s marketing team will have the requisite background and expertise to fully understand the often complex, convoluted journey of the company’s advertising dollars.
This is why cutting-edge technology like Albert™, the world’s first fully-automated artificial intelligence (AI) marketing platform, represents such an incredible value-add to marketing departments. Using a variety of AI capabilities like deep learning, predictive analytics, and natural language processing, Albert runs thousands of calculations on a rolling basis in order to precisely assess the performance of a company’s entire advertising portfolio.
Furthermore, Albert is able to manage your advertising accounts while leaving marketers in complete control, allowing them to see exactly which keywords, audience segments, channels, and devices Albert is targeting. By changing Albert’s parameters, they can control their campaigns without having to manually execute the millions of calculations and tasks he completes each day.