Category: Data-Labor-Technology Stories

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Advertisers, impatient with the rest of the supply chain’s slow attempts to become more transparent, are taking matters into their own hands.

Marketers talked a lot in 2017 about wanting to know exactly what ads they buy in the murky world of online advertising, yet too few were able to find out. Now, the buy side has become more demanding after much soul-searching over the last year, said Matt Green, the World Federation of Advertisers’ global lead for media and digital marketing.

There were short-lived boycotts of the largest media channels. Marketers openly criticized the quality of online media, and advertisers walked away from big agencies and questionable ad tech. There was a lot of confusion about how things got so bad that marketers didn’t know what they were buying online. As much as those flashpoints shed light on advertising’s transparency issue, they also highlighted that the necessary changes to the supply chain weren’t happening as quickly as advertisers would’ve liked. The same problems that dominated the discussion at the start of the year, like brand safety, re-emerged in the final months of the year. Now, advertisers are coming up with their own solutions.

“We don’t like to ‘talk the talk,’ but rather ‘walk the walk’ when it comes to full transparency,” said Aaron Smolick, executive director of paid media analytics and optimization at JPMorgan Chase. Smolick explained why the bank built its own algorithm to keep its ads away from questionable content on YouTube just months after it — among a raft of advertisers — pulled ads from the video site last March amid the brand-safety scandal.

The bank’s algorithm, developed internally by its programmatic and media-buying teams, plugs into YouTube’s application programming interface and uses 17 filters, including video count and topic, to sort safe channels to host its ads. Having that insight at their fingertips means the bank’s marketers are pulling away from the long tail of content on YouTube. After sifting through 5 million YouTube channels since October, JPMorgan Chase now runs its ads on around 3,000 channels that its algorithm deems safe.

What is deemed appropriate for one advertiser “might not be suitable for the next in line,” said Smolick. Chase is a “very cautious brand,” he added, so “we felt the customization we used in the program had to include stricter levels of acceptance for channels we advertise on. We also are monitoring scale and cost to ensure the balance is in line with our business goals.”

Like brand safety, advertisers are also trying to do more to tackle ad tech’s issues — at least the strategy part. A recent survey of 149 marketers from the Association of National Advertisers revealed more than a third would reduce the amount of programmatic work they outsource to agencies due to having a greater knowledge of how media is traded. One of those advertisers is online gaming company Betsson Group.

Betsson Group took matters into its own hands last year with the appointment of Adform as its demand-side platform. In November, Betsson Group made its agency trade on Adform’s DSP, which it owns the contract to, to see whether the agency had been marking up prices via its own DSP to drive the agency’s own revenue and margin. By forcing the agency to use Adform, where the advertiser can see exactly what bids are occurring and for what price, the DSP would instantly show where the agency had previously been inflating prices or disguising subpar inventory as better inventory.

Uncovering those hidden costs isn’t the only benefit to Betsson Group. Like L’Oréal, Deutsche Telekom and Adidas, the online gaming business wants a programmatic strategy that ensures money is only spent on effective media.

Betsson Group is among a number of advertisers that will attempt to exert their influence over the broader ecosystem during the next 12 months after a 2017 that saw many focus on overhauling how they worked with agencies, according to Green. If 2017 was a year for getting disclosed media-trading deals in place and setting up the right arrangements with programmatic partners, then the next 12 months will see marketers drive greater adoption of ads.txt across their own partners as well as push online media’s walled gardens to give them more access to data, he added.

Diageo has already refused to spend on two of those walled gardens — YouTube and Snapchat — for fear of endangering the so-called trusted marketplace it spent the bulk of 2017 establishing.

The alcohol advertiser declined to comment on its digital strategy, but two sources who work with its marketing teams said its marketers are more accountable now than ever. That’s due to the advertiser’s trusted marketplace, which requires all bought media to conform to strict standards: Ads must be 70 percent in view; partners must have transparent pricing models and allow for independent verification of all their media; media owners must ensure that only users over the legal purchase age should see alcohol ads; media owners must employ robust brand protection tools; and sites must demonstrate a zero tolerance of ad fraud.

The post ‘We’re walking the walk’: Advertisers put transparency on the top of their 2018 to-do lists appeared first on Digiday.

In the scramble to prove digital advertising works, some legacy performance measurement systems used for traditional media auditing were retrofitted for digital. That’s produced “catastrophic” results for both brand advertisers and publishers, according to a media auditor executive who spoke to Digiday as part of our Confessions series, in which we exchange anonymity for candor.

This senior exec, who has also worked for many years on the agency side, believes media auditing needs a makeover and is frustrated that advertisers still pay through the nose for what they’re told are robust data benchmarks.

Excerpts have been lightly edited for clarity.

What’s a media audit pool?
Media auditors collect from media agencies the data of a particular client [or clients] they’re contracted to work with. That data is put into an anonymous pool, with other similar client data. Each client gets compared against that data pool, and people look for like-for-like comparisons to give an idea of how a client is performing compared to the rest of the market. Typically, you’d speak with the agency to prepare them for the results, and that’s when the discussions start and where it ultimately becomes a negotiation of what the results are, and that’s usually whatever reflects the agency’s performance in the best light.

What do you mean by negotiation?
If a client requests a media audit, they’re not told who else is in the pool, so it’s hard to tell if it’s genuinely a robust piece of analysis. Usually, it’s too small, with five or so clients in a pool, when it should really be up to 20 clients for digital because there are so many more data points than in traditional media. In reality, a typical digital pool would have 10 percent of the data on a client’s campaigns across the year because there are so many different variations of what you can buy from a digital provider: different placements, targeting and formats that can be bought 24 hours a day. So, trying to create like-for-like comparisons is really hard.

Why is this a big deal?
It’s an old practice that shouldn’t be happening anymore now that the [digital] media market is so complicated. These antiquated pooling processes have been applied to digital with catastrophic effects, with media auditors claiming they have a pool for digital, for programmatic. But that’s laughable because programmatic is an auction-based system, and anyone has access to buy auction-based inventory at the best possible prices. You don’t have to be an agency of scale. Ultimately, it’s the media auditors that keep these almost fictitious pools open, but it’s a shrinking black box of data that isn’t comparable anymore. And the agencies are just trying to give data that makes the performance look good.

Agencies fudge the numbers?
Yes. The only source to understand where the spend has gone [what channels and audiences] is the media agency. So you have to take their word that’s what they spent on those audiences.

What are the ramifications?
Clients will often write into their contract that they’ll pay a bonus based on a certain result versus a pool. I’ve seen it written into contracts that a client will pay a £100,000 ($136,000) bonus to their agency based on a pool’s results. So the agency is incentivized to provide the best possible audit result to gain its bonus. That sounds great in practice — of course, you should reward good performance, but the issue is that because of the bonus structure and the fact the pools are flawed, agencies often manipulate the numbers to show stronger performance. So clients are paying out large sums of money based on erroneous results. That hurts clients as they are paying out for improvements that are not really improvements.

Does that hurt the publishers, too?
It hurts media owners because they’re also having to offer better prices all the time to try and beat these pools, and those pools will never represent the whole media owner book.

Explain that.
It means media owners are pressured to offer the media agency better prices for that client so that the client gets the result versus the pool that they want. Media owners get frustrated with the media auditor because the latter is saying their average price on media inventory is much lower than what the media owner states it is. That means the media owner is under pressure to give the agency and client concerned better pricing to narrow the gap. Given you can see which media owner it is that’s contributing to the bad result, the media agency will phone them and tell them they’ve had a crap media audit and that they have to sort out the pricing on it.

What’s your advice to clients?
Focus your contract on outcomes and how the agency will improve your pricing based on looking within your agency group — your trusted agency should be able to open their data books up. There’s a reason you often hear the phrase “you never get a bad media audit” — it’s because there is all this “negotiation” and agencies manipulating the data. The auditors need to wake up and realize this practice is no longer fit for purpose.

The post Confessions of a media auditor: ‘Agencies often manipulate the numbers’ appeared first on Digiday.