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  • Writer's pictureProgrammatic Guide

The Transparency Test - How Do You Score?

Transparency has been one of advertising’s hottest topics over the last few years, and it continues to stay top of mind for marketers today. Spurred by frequent press on topics like fraud, arbitrage, rebates, and viewability, transparency has driven a fundamental shift in the market. Technology companies have had to evolve from opaque, network models to transparent, fee based contracts. In parallel, the push for quality inventory has reached a fever pitch with fake news in daily headlines.

Changing Dynamics

Agencies are also under pressure to adapt, especially in light of the ANA's blockbuster Media Transparency Initiative Report. In response, legacy trading desk models are being disbanded in favor of a decentralized structure. The recent AdExchanger report that Omnicom's Accuen is seeing revenue decline because "clients continue to favor fully disclosed programmatic buys" is just the latest example. Traditional consultancies like Accenture and Deloitte are capitalizing on these dynamics using transparent business models and a data first approach. 2017 was a landmark year for these players with consultancies now representing four of the ten, largest, global agencies.

Marketers Respond

In response to these secular changes, marketers are starting to take action. Bringing programmatic in-house is a major trend, especially in light of P&G Chief Brand Officer, Marc Pritchard's rallying cry "the days of giving digital a pass are over, it's time to grow up. It's time for action." His blistering commentary calls out a number of issues including media quality, business models, contract standards, and measurement practices. As he, and others, continue to beat the transparency drum, marketers have to ask the question, how do we define transparency?

The Transparency Test

To help answer this question, it's important to break down transparency into its component parts: Price, Media, Data, and Service.

  • Price Transparency covers the full spectrum of fees and costs including agencies, technology vendors, publishers, and all associated intermediaries. On a typical digital media buy this would include fees from your agency, DSP, DMP, ad server, measurement vendors, and quality assurance partners. In parallel to these fees, your cost of media and data would also be included. While this is an oversimplification of the digital supply chain, it highlights the numerous aspects of establishing true price transparency.

  • The Price Transparency Test is simple. For a given dollar of media investment can you provide a line item breakdown of your fees and costs? For the vast majority of marketers the answer is no, resulting in working media percentages that are often below 40%.

  • Media Transparency is important to ensuring that your brand is reaching real people on quality content. The common dimensions of media transparency include brand safety, viewability, and fraud. During last year's election, this topic became a major news item with brands publicly boycotting Breitbart but struggling to actually keep their ads off the site due to a convoluted media supply chain.

  • The Media Transparency Test requires full vendor transparency and has a few parts: can you receive a domain/app list showing where all your media is running, do you know your viewability scores across all content, do you know what percentage of your ads are delivered to real humans on non fraudulent content? In most instances the resulting picture will be unclear, but the need for media transparency is paramount. On the fraud side of things alone, "marketers stand to lose $16.4 billion this year."

  • Data Transparency can be overlooked with so much focus on price and media, but it's still important. Marketers need to understand what data they're using, how its sourced, and who owns it. In many cases, agencies or technology vendors contractually own data that should be owned and protected by the brand. Additionally, with GDPR around the corner, marketers must now ensure that their data collection and usage practices are compliant.

  • The Data Transparency Test starts with usage and then branches into contracts. Is your data fully siloed to ensure that it isn't used by other marketers without your permission? Do you know the full list of 2nd and 3rd party data sources that you use and where that data is sourced from? Are your technology vendors compliant with industry and legal guidelines regarding tracking and cross device measurement? The easiest way to establish data transparency is to ensure that your contracts and usage policies are fully owned and controlled by you. Without these measures, waste will continue to plague the market. According to ANA CEO Bob Liodice "Just 25% of CMOs’ digital media investment reaches target audiences. This atrocity represents more than $20 billion of marketing waste, inefficiency and ineffectiveness."

  • Service Transparency can be harder to quantify than the others, but it's still important. While the promise of programmatic includes automation, it still requires human intervention across strategy, campaign management, and analytics. The difference between success and failure can often come down to resources and expertise.

  • The Service Transparency Test is all about people. Do you know the number of people, and their experience levels, that are working on your campaigns? Are there processes and controls in place to ensure quality and timely service? Despite the shift to in-house and even self-service models, service continues to be a major challenge. It's common to hear marketers voice frustrations over underperformance compared to what was promised in the pitch.

A Call To Action

Transparency, at an auditable level, should be the norm. Marketers should expect and demand it across all four dimensions, starting with price. This may lead to uncomfortable conversations with your partners and vendors, but the upside is worth it.

Consider enlisting expert services as you work to establish true transparency. There are also great resources available, such as the ANA's Master Media Planning & Buying Services Agreement, which can help you take contractual control over the supply chain.

Digital is complex, and with complexity comes a lack of transparency, but the times are changing. Transparency should be at the top of every marketer's objective list going into 2018. The resulting cost savings and improved results cannot be overstated.

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