transparency

There has been a great deal written of late about transparency in the media buying arena.  This issue was highlighted at March’s 4A’s debate amongst some of the biggest names in the media agency world. If they’re worried about it, surely their clients should be too.

As this article from AdAge points out, at one stage the moderator (David Verklin) asked a pointed question of the CEO of Group M (Irwin Gotlieb) “…if you agree that clients’ business comes first, where do you stand on transparency? How can trading desks be fair?

I imagine Mr Gotlieb was ready for this question but it would still have stung as Group M are one of the leaders in the ‘Digital trading desk‘ space and are under a great deal of scrutiny from their clients around the transparency of the Xaxis platform. His answer was clear – Group M are transparent with their clients on how the business model works but they will not give them access to pricing information that they may expect in a traditional media audit.

For many clients, the potential benefits of using Xaxis outweigh the concerns around transparency and they acquiesce to signing contracts that will forever limit their ability to audit pricing through the model.  I have worked for clients where this is the case and I can understand the rationale for doing so.  It’s worth pointing out that Xaxis does operate as ‘principle‘ in some of its transactions – i.e. it buys digital inventory and then sells this on to clients – this is a marked change from the traditional ‘agent‘ model.  The value proposition from Xaxis is its ability to use vast amounts of data to recut the inventory it now owns and target this at audiences that the client is looking for – I can’t argue that this is not a great idea but do they need to own the inventory in order to deliver the value?

Its interesting to note that not all of the agency groups act in the same way as Group M.  Matt Seiler from IPG’s Mediabrands group was quick to point out his company’s credentials “…we’re totally transparent, we don’t arbitrage at all!’.  Mediabrands makes a point of being transparent in all of its activity in this space but are they missing out on some of the value that Group M is able to create with its model?

Another article published recently called out the lack of transparency that exists within the trading desk operations themselves. Adweek published an article in March that raised the issue of agency buyers not having the level of transactional data available to them from the sell side platforms to truly optimize their buying strategies. We’re busy pushing for transparency on the buy side of the deal whilst the agencies are asking for greater transparency on the sell side – looks like the agency and the client are in violent agreement on this one!

I had an interesting debate about this topic earlier this week with an agency friend and their (very valid) point was – what does it matter as long as the client is getting its objectives met by the advertising investment? Fair point….if you’re truly paying your agency for outcomes. But how many clients really are?

This situation reemphasizes the need for clients to ensure that they are rewarding their agencies for true success.  An agency that is well rewarded for delivering the client’s marketing objectives is much less likely to look for profits from other sources and will remain focused on making sure it’s client succeeds – isn’t that what we all want?

Please leave your comments and feel free to get in touch if you need help in maximizing the value of your marketing investment

dan@jeffriesconsulting.com

www.jeffriesconsulting.com