Sir Martin Sorrell is worth listening to -- always. It's not by accident that he runs WPP, and so when he says something you instinctively disagree with, it's well worth delving a little further.
So, his contention is that he's surprised at the transparency furor over programmatic advertising, no doubt carried out through real-time buying (RTB).
I think many observers would be quite
surprised at his surprise. After all, the issues around transparency have been laid out many times -- and while arguments may ensue over how transparent a particular agency is, the problems that need
countering are out there in the open to be discussed. Mind you, he was talking about WPP's Xaxis -- which, I am reliably informed, is well known for not sharing first-party data. In other words, a
brand can run a campaign safe in the knowledge that a rival on the same platform will not gain from their data discoveries.
Sorrell also points out that a 15% markup on inventory is accepted
as an industry average. If this is the case, then he would indeed appear to be correct.
The real issue, however -- discussed at the recent MediaPost OMMA RTB London event with ISBA,
which represents advertising brands -- is that companies don't know how many middlemen are involved in their inventory being planned, bid for, bought, tracked and billed. An ISBA representative went
so far as to say that one auditor had warned one client that as much as half of their media spend went on commissions, technology and middle men.
This leads into the next issue of viewability
and fraud. Statistics can vary, but often level out at around half of display adverts either not being viewable or are being clicked on by a bot. If these scenarios are true, it would lead advertisers
to wonder if they're spending four times the value of the media they eventually get.
We asked for a show of hands at the London RTB event to signify who had transparency as a daily issue in
their working lives, and only a small handful raised an arm. While you could say that this is because the room was full of agency people and transparency is more of a brand concern, there was
evidently a lot of fixed attention paid to our debate on click fraud and viewability.
So maybe Sorrell has a point. If you are seen to run a programmatic trading desk that is open on its
charges and protects first-party data, then transparency issues may seem to be a surprise.
However, I think there is a lot of pent-up frustration with programmatic. It's the new tech-driven
kid on the block -- and so it will always be criticised, along with any other trading mechanism, when fraud and viewability are such issues.
So, in a way, these concerns which pre-date
programmatic are now dogging it, adding to the concern that advertisers are either being ripped off or at least being overcharged for inventory a human never sees or interacts with.
That's why
transparency is such a huge issue. Because fraud hasn't gone away and the viewability threshold is set so low.
So you might well think you're doing okay in solving the transparency issues that
programmatic gave birth to - namely, how much are you charging me and where's my data?
But if you don't solve the issue of has my ad been seen by a human, the transparency debate will roll
on.