Editor's Note: This column has been updated from an earlier version.
We’ve been hearing and talking a lot about transparency in programmatic media buying, and media buying in general. What is it about that word that increasingly makes my skin crawl? It’s kind of like when everyone talked about “big data” -- and now it’s just “data” or “data and analytics." Skin still crawling.
The issues around transparency are very real, day in and day out. Looking for perspective, I checked in with Joe Weaver, president and CEO of Promatica Consulting, which tries to work through these issues with marketers arm-wrestling with their media agencies, ad-tech vendors and other partners. Weaver’s been on all sides of the equation: He previously worked at TubeMogul, Mindshare, Omnicom Group, among other agencies.
So what prompts marketers to call him? “The [ad-tech] vendors cause confusion. By the time we talk to [marketers], they’ve heard a variety of different points of view from different people. It becomes a very frustrating process for them, because they do believe in programmatic media and marketing. They understand what it can do for them, but they’re very far from being able to work through what various business models mean for their business and which ones will work,” Weaver explained.
With respect to that new buzzword “transparency," Weaver said “brands have been feeling like they’ve been screwed by the agency. First, by not having financial transparency.” Brand marketers want to know how much the media costs: net vs. gross, where each dollar goes and how the dollars break down between different vendors, depending on how the media is being bought.
There’s also a feeling that objectivity has ceased to exist at the holding-company and media-agency level. Backdoor deals and holding company investments in ad tech have decreased transparency. “What’s happened is now the media investment groups are created to navigate and push more dollars into their own preferred partnerships that are beneficial to the holding company and media agency,” Weaver said.
He called out GroupM parent WPP, in particular, for steering marketers toward ad-tech platforms it has investments in. By using them, marketers are bolstering WPP's revenues. WPP has a $25 million stake in AppNexus, among other ad-tech providers. GroupM’s Xaxis For Publishers technology was part of the deal.
Business Insider reported that WPP agencies spent some $4 billion on Google properties in 2015, along with $1 billion on Facebook and $100 million on AOL. Of course Google, Facebook and AOL each have their own proprietary ad-tech stacks and preferred relationships.
Keeping track of which players have a stake in specific ad-tech vendors, which agencies are units of which vendor, publisher or holding company, and how they're steering clients has become a parlor game.
Transparency can mean different things at different marketers. For example, for L’Oreal, which has worked with Promatica, it means being mindful about where it's going to put its money, the partners it will use and identifying where those partners’ true business interests lie.
“There are a lot of brands that don’t trust the agencies. We believe there’s a better model out there,” Weaver said.
But Weaver goes much further: “Media [agency] investment is dead. It doesn’t do anything for brands in the digital space. It doesn’t do anything for brands in the programmatic space. Once brands figure out they don’t need the dollar leverage to get the rates they want or need, they figure out they don’t need the big agencies.” Now that should have agency executives' skin crawling.
True? False? Or is the reality way more nuanced? Either way, it sounds like he’s on to something.