Report: Most Advertisers See Media As 'Complex Headache'
- by Steve McClellan @mp_mcclellan, February 28, 2017
Media consultant ID Comms is out with a new study — based on a survey of marketers and media agencies conducted in January and February — which found that both groups believe that for the most part, advertiser media decisions remain procurement-based.
The study also found that both groups — accounting for 79% of the respondents — believe such an approach is wrong and that media decisions should be based on strategic marketing factors, not just costs.
The study is based on answers from 178 respondents comprised of marketing, media and procurement professionals around the world, but primarily from Europe (74%) and the U.S. (18%). The brands represented spend more than $22 billion on global advertising annually, while the agency respondents came from all the major holding groups and independents.
According to the report, advertisers and agencies agree that most advertisers see media as a “complex headache.” They are also seen by both groups as focused on media buying and efficiency rather than planning and effectiveness and “do not view media agencies as strategic partners.”
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Some 97% of respondents strongly agreed that “advertisers who take a more strategic and thoughtful approach to media will deliver a stronger marketing performance.” Ninety-two percent of the agency respondents felt that way, per the report, as well as 81% of the advertisers that were polled.
“These results clearly highlight the need for advertisers to place greater importance on smarter, more strategic media thinking overall for media success,” the study concluded.
ID Comms' Tom Denford added: “Real strategic leadership on the advertiser side would dramatically improve media performance. The fact that advertisers still have gaps and doubts in this area is a real black mark. Advertisers need to play their part in providing agencies with great media briefs and a process that allows them to do great work that adds value.”
Most of the advertising and agency respondents also indicated that advertisers generally are performing “below expectations” in major areas of media capability, including setting clear KPI’s for media, having a point of view on ROI for media and having a well-established internal media group.
Agencies are lacking in a number of areas as well. Advertiser and agency executives agreed that generally, agencies perform “below expectations” for identifying relevant data-fueled insight, integrating owned, earned and paid media and providing “neutral and objective planning recommendations.” Also lacking at agencies, both groups agreed is a culture of media innovation.
Most advertisers---CMOs and up ---as well as agency management believe that the only thing that matters is product/brand positioning strategies and "creative" execution. As for media planning, it's regarded as something you must do in terms of costing out the client's media preferrences, handling the details, etc. while most of the focus---such as it is---is on "procurement"---aka media buying---which is, in most cases CPM-driven. The sad fact is that ---a few exceptions aside----that it's the client---usually acting arbitrarily and in woeful ignorance of what can really be done in media re targeting, exploiting suitable environments, complimentary media mixes, etc.--- decides on a media mix and the agency, knowing that this almost always is keyed to TV, acts accordingly. Accordingly, no matter what they say in public forums, advertiser decision makers shun "boring", numbers laden media presentations and thus, remain blissfully ignorant, while the media planners and buyers are constantly under the gun to operate "efficiently" and "transparently"------the latter being the new buzzword. As I said, there are some exceptions---but these are few and far between and most agency media people will privately admit that they are frustrated beyond belief by this ongoing situation---but see no remedy.
Ed, you are absolutely correct. I doubt that there has been a single pitch among the many giant ones that have taken palce over the past 18 months where the two major determining factors were not 1) results of a pricing exercise and 2) savings on fees vs. what was previously paid. Yes, there is lip service to "strategic thinking", but when push comes to shove that matters far less.
The article and the comments are all on point. Curing this headache won't prove easy. Media agencies (and others too), now constantly under the gun to be seen to be proving their worth, too often mistake adding complication for adding value. Processes have gotten convoluted, language is jargon-heavy and opaque. The ad tech sleights of hand only exacerbate this. The industry has its own issue with alternative, contradictory facts ("Everyone's cord cutting"; "No they're not"), making it harder to know who to trust. Many large spending clients still commit significant portions of their budgets pre-brand briefings, so the media planners room to manouver is curtailed. Available data fails to become actionable information, not least in part because clients can be reluctant to share the senstive sales numbers that would truly inform modelling, or indeed allocate funds to set up the necessary bespoke tools in the first place. Client media briefs tend to one of two types, either (a) a phone call or (b) a laundry list. And if one surveyed stakeholders as to what "smarter, more strategic media thinking overall" is actually interpreted as, I daresay the answers would be many and varied.
What's incredibly sad is that we've usually found a focus on cost savings can only end up increasing impact per dollar by single digit percentages (unless a buyer is making some obvious and huge mistake). By contrast, a smarter media strategy can increase results by 20-25%.
To bad it's so easy to point to "they dropped their rates" or "we got a better CPM" than to demonstration achieving a six sigma when it's far more effective but that effect is harder to measure. (Deming noted that the really important things often hide among the business factors that aren't measurable. That's true in Media.)
Very true Paul.
I could add to your last sentence ... And if one surveyed stakeholders as to what "smarter, more strategic media thinking overall" is actually interpreted as, I daresay the answers would be many and varied.
Not only would they be many and varied ... but proabaly also bereft of 'smarts' and strategic thinking.
P.S. Paul, did you ever work in Sydney in the '90s?
There is a lot of "shadow" inventory out there now as a result of RTB and other programatic demand. Between pixel stuffing, auto play videos, stalker units which deliver 100% viewability but arent viewed, pop-unders, automated traffic and the like, there are so many ways to reduce any ad's effectiveness. Price and pricing model is really the only way to create a value based exchnage where risk is shared equally by supply and demand. I think a lot of advertisers buying on CPM bases and looking at the industries idea of "metrics" are being taken for a ride and they know it. Mid and long term, the industry has to weed out fraudsters and the daisy chain which robs everyone of value.
A key issue highlighted in the article is that advertisers are performing below expectations largely because of a failure in "...setting clear KPI’s for media, having a point of view on ROI". Without such measures to evaluate media performance, quantitative judgement reverts to price & efficiency (versus value and return) and will continue to lead to poor media buying decisions. Even when KPIs are chosen, they are often done so lazily, using trendy indicators that aren't close enough to actual results for the brand to allow for media selection that's customized to that brand. For instance, measuring "viewability" as a KPI (new buzzword last few years) isn't robust enough. As someone commented above, it can be gamed as easily as non-viewable CPMs were before in subpar environments; it doesn't necessarily tell a brand whether the media has succeeded in its overall purpose and will just lead to more price & efficiency evaluations of a different type of impression. Am hoping to see advertisers and their agencies focus more time on defining the custom KPIs they should track that reflect success of their particular strategy so that then they can make media buying decisions on value, rather than just cost.
The traditional media (aka dinosaurs) have finite ad inventory, governed primarily by the number of minutes in the day and the volume of print stock.
The digital media have virtually infinite ad inventory and 'the cowboys' amongst them seem intent on trying to add to it via fraudulent means. CPMs become meaningless as they continue to plunge towards zero.
For very clever people who invent things like shadow invetory, pop unders, autoplay, pixel stuffing etc ... they sure aren't smart.
Lots of great points made here. I’m a strong proponent of the fact that you get what you pay for. The entire process is cannibalistic in nature. If procurement bases decisions on cutting cost by squeezing margin from agencies, then by necessity agencies have no choice but to reduce cost on their end. Unfortunately the result means inexperienced personnel or lower head count, and the level of strategic thinking is diminished considerably. I’m also in agreement that there’s a lack of clear strategic direction provided to agencies. Realistically when the largest line item on a budget is the media buy, marketers are constantly looking for quick wins to justify the spend. This leads to choosing KPIs that don’t necessarily lead to sound long-term marketing decisions. So agencies chase the low-hanging fruit to justify their existence in the short run – metrics like viewability, reduced CPMs through "shadow inventory", or even worse – last-touch CPAs. The fundamental flaw in thinking is that we naturally avoid what we don’t understand. That goes for both agencies and brands. And so it is with media on the part of many advertisers. I’m a proponent of the methodology that brands need to begin thinking of their media as an investment rather than a cost. Drawing on the analogy of the financial markets, as an investor, I have the choice to take a passive approach and hope for the best, or I can inform myself and work with the right advisors to be aggressive where I should be and avoid risk where I can. Almost any financial advisor will tell you that chasing quick wins almost never works out in the long run. The same can be said for brands investing in media. Perhaps that's oversimplifying the issue at hand, but to me it seems a relevant analogy.