• by Tobi Elkin  @tobielkin, April 5, 2016

To no one’s surprise, ad blocking, fraud, viewability and transparency issues took center stage on Tuesday at the Advertising Age Digital Conference. Positioned as elephants in the room, these are threats the advertising industry is contending with in different ways.

“There’s an existential threat from every corner of our business,” Lou Paskalis, Bank of America's SVP, enterprise media executive, told the audience. “For me, the biggest threat is that we’ve lost the plot of what we’re supposed to be doing: delighting and inspiring.”

Regarding the "elephants," Paskalis thinks that ad fraud will eventually be solved, but “ad blocking is a real canary in the coal mine for us.” He said that getting better at storytelling is a key to this problem: “No one ever said ‘thank God, there’s an ad on my mobile phone.' But we’ve seen people engrossed in content on their phones. That’s the business we have to get into.”

Ron Amram, Heineken's VP of media, is worried about everything: “The elephant in the room for me is that consumers don’t feel passionate about brands and their content anymore. …We have to change how we serve up our advertising and our content.”

There's No Single Source of Truth

The biggest issue for David Cohen, Magna Global's president, North America? “We don’t have a single source of truth in this business. Pick whatever it is… planning, execution and measurement. There are single-point solutions and we have to stitch them together. The platforms, players and ad tech are complicated,” Cohen said.

Paskalis said breakdowns in trust and transparency issues over fees may be more of an issue for medium and smaller advertisers that don’t know what questions to ask themselves: “Do I trust my agency? Do I trust the operating model? Am I having the right conversations?”

While Paskalis said he has a great relationship with his Publicis agencies, he’s very concerned about transparency.

Heineken’s Amram cited former Mediacom CEO Jon Mandel’s shot over the bow last year at an Association of National Advertisers (ANA) forum last year.

Mandel cited widespread agency rebates and kickbacks that Amram said has changed the conversation: “You’ve seen a change in the way agencies talk about themselves. But the 4As [American Association of Advertising Agencies] and the ANA can’t agree on what transparency is. We’re not speaking the same language. That leads to trust issues. If there wasn’t an issue, why are we acting the way we’re acting?”

The Agency/Client/Vendor Relationship: It's Personal

Cohen made the trust issue simple by suggesting that marketers and agencies need to think about their relationships just like they think about their personal relationships: “You and your spouse have to trust that you’re not cheating on one another and spending money without their knowledge… that [thinking] needs to permeate the business.”

Cohen said he feels fortunate that IPG, Magna’s holding company, cleaned up its agency model a dozen years ago or so in reference to transparency around preferred provider relationships. “We’re one of the first to be open in our programmatic offerings. We don’t take principal positions in that business. Once you have inventory on your books, you have an agenda to sell it.”

With respect to potential conflicts of interests -- how increasingly, media buyers are also the sellers -- Cohen said, “it is absolutely possible to run a business on both sides of the equation if you have integrity” and are open with clients.

“You may have an agency that has a content production offering that’s part of the holding company. As long as my media planners aren’t co-opted and can make a fair choice about what’s best for me, it’s okay,” Paskalis said. What bothers him is if an agency says that advertisers have to buy some media from “column B” in a preferred relationship scenario.

Amram agreed: “If you have a preferred vendor relationship and I can walk away and see all the other vendors, that works for me. The concern is if the agency or vendor isn’t upfront about preferred relationships.”

Viewability Is More Easily Solved Than Ad Fraud

Cohen, Amram and Paskalis perceive viewability to be a different issue than ad fraud. Viewablity is “did the consumer have an opportunity to view the ad?" said Paskalis. "And it has to be adjacent to content.”

To a large degree, viewablity is being solved via tools and services offered by Moat, Integral Ad Science, DoubleVerify and others, Amram noted, citing the Media Ratings Council’s terms and conditions as a basic “floor.”

All three executives agreed that fraud isn’t easily solved and it’s not going away. “We’re actually funding the success of the fraudsters, and they’re going to universities and recruiting mathematicians and promising them jobs," Paskalis said. "We have to work harder as clients and agencies to stop the fraud."

Finally, as programmatic media buying becomes de rigueur, the myth is that machines rather than people will be doing all the media planning and buying. Cohen said there will be a migration to mobile, search, content and programmatic specialists, where most of the growth is at the agency level.

He views this as a redistribution of resources rather than an all-out elimination of people. “We call it ‘programmanual,’” Cohen said.