Commentary

Leading Global Media Agency Dismisses Effectiveness Of Digital Media

by Maarten Albarda , Featured Contributor, May 2, 2016

Last week, Group M released a report called “Interaction 2016," which got plenty of attention here on MediaPost. In it, GroupM shares a laundry list of issues with digital media that we have been debating here at the Online Spin and elsewhere for a very long time. Group M shares global numbers it collected concerning ad blocking, fraud, viewability and a whole range of related issues. And with regards to the growing budget share of digital media, Group M questions “the effectiveness of these investments.”

Wow.

Here is one of the world’s leading media agency holding companies effectively telling us that the massive and growing digital investment is largely not effective.

It recommends not using 30-second online video spots. It tells us not to trust online video viewability, especially mobile device viewability. It tells us to be concerned about ad blocking, as the numbers range now from 25% to more than 30% of users, depending on the market. It doesn't specify these numbers by target audience, but I was at a conference where 100% of students in attendance raised their hands when asked if they used ad blockers. And these were marketing students!

The report is brutal in its clarity and honesty. What it lacks is the “now what?” I have communicated here and at every opportunity when I speak that this is not a media owner, or agency, or advertiser issue. This is an industry issue that needs to be addressed by a coalition that will set out not guidelines or recommendations, but lay down laws and rules, with teeth to police and implement them.

I read an article last week that suggested a link between the growth of ad blocking, ad fraud and crappy online advertising experiences. I absolutely believe that link exists.

When I write bogus nonsense on Wikipedia, that content is swiftly removed, if it ever reaches the platform in the first place. Wikipedia receives about 800 new entries every day in English, and 10 edits per second. There are very few paid Wikipeedsters, but somehow this ecosystem works. Why can the collective marketing industry not come up with a system that polices online advertising? Weed out the bad. Build A.I. for that, instead of messenger bots.

Sadly, agencies do not see eye to eye with advertisers. ISBA, the UK sister organization of the ANA, last week issued new guidelines for agency contracts that lay down clear rules for transparency between marketers and their (media) agencies. As recently happened in the U.S., the U.K. agencies were swift to state that this was not the way they wanted things. And just like in the U.S., now agencies and advertisers are on diametric opposite sides of the debate.

And to add fuel to the fire, there is a new media-buying approach being thrown around called "principle-based media buying,” where agencies purchase and resell large quantities of media inventory to marketers. It is yet another evolution of buying, with a focus on low cost rather than strategy and planning.

Funny thing: Group M is actively playing in this space with its Xaxis unit. Oh, the irony: while Group M has a clear view of the digital-media issues, its trading arm is actively (re-)selling the very stuff the parent deems ineffective, and in a way that further challenges transparency.

agency, commentary, digital, media

9 comments about "Leading Global Media Agency Dismisses Effectiveness Of Digital Media".

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Kim Garretson from RealizingInnovation, May 2, 2016 at 3:30 p.m.
Maarten, regarding "What it lacks is the now what?" I suggest you look at what top retailers are doing this year: launching permission marketing at scale and affordably. They've long know that a product-page-view (arguably an 'ad' for a product) converts at best at often 1.5 percent after all the marketing spend has been spent to get the viewer there. (And with ad blocking and email unsubscribe, it's harder and more expensive to get those views). To date, non-buyers often are barraged with unrequested retargeting ads and emails, with these results also on the decline. Their 'now what' is to simply embed a new button with what is currently the only button for BUY NOW. The new button can say GET ALERTS, and it captures the ultimate in first party data, individuals who've given the brand permission to market to them later on criteria they set. I am seeing this 1:1 tech moving from retail to many other categories this year as well.
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Paula Lynn from Who Else Unlimited, May 2, 2016 at 4:03 p.m.

It has all been like a bacteria multiplying faster than can be killed while eating itself to fatten itself up to be able to multiply faster.

Clark Smidt from BROADCAST IDEAS, May 3, 2016 at 8:07 a.m.

DIGITAL is wonderful, clear delivery. Content, presentation and reception are the essential ingredients to media's Secret Sauce! Too many are swept up by shiny new gadgets that clearly deliver wasted ROI BS. "And, that's the truth!" - Lilly Tomlin. www.broadcastideas.com

Jeff Pugel from Essex Digital Platform, May 3, 2016 at 8:16 a.m.

Is it truly "inneffective" or is it just that most agencies/marketers have been doing it wrong, and thus making it "inneffective" and it's easier to justify it with this thinking rather than admitting they did it wrong and trying to do it right, or oursourcing it to those that know how to do it right. Part of the problem I've seen is that agencies and client are more interested in buying units rather than results, leading to this "problem." When you're buying the wrong media and applying it wrong all day long, of course it's not going to work.

Tom Kramer from Essex Digital Platform, May 3, 2016 at 8:56 a.m.

I'm sorry but I disagree with just about everything presented in this article. Over the past year I have watched agencies struggle to refine their model that will make them relevant into the future. Let's face it, very few even understand how online marketing has evolved into both an IT function and a business system, let alone possess the ability to execute against this new standard. For agencies, planning and buying in the online space is more about purchasing units of inventory at price/scale and less about architecting a formulaic systems approach to monetizing ad spend (See the "Principle Based Media Buying strategy above). As a result, the publishing of such articles has become both predictable and disappointing. The thing that is most irritating about these types of articles is that an agency who has never mastered the art of online marketing is now pretending to be the de facto expert on online marketing. How does that even happen? For those of you reading this and feeling disheartened, let me assure you that digital marketing is not only effective, it is also measurable, responsive, and directional. Ad blockers aren't a problem for online marketers that have mastered a true omnichannel stratey and measure engagement, activation and conversion. I should know, we do it to great effect every single day of the week and have the CPAs and ROAS to prove it.

Ed Papazian from Media Dynamics Inc, May 3, 2016 at 9:51 a.m.

While I frequently find myself on the legacy media "side" when refuting some of the blatent propaganda put out by certain digital media and programmatic advocates, I must confess that I sympathize with the comments by Tom and Jeff about this particular article. One of the causes that is rarely understood is the way media mix decisions are actually made by branding advertisers. Do they evaluate all reasonable options? Nope. Do they run everything by the numbers to see if alternative media plans offer better targeting at lower cost? Nope. In fact, a handful of exceptions notwithstanding, almost everything of consequence is decided arbitrarily, without a serious discussion of alternatives. This is especially true of TV, which is why so many advertisers are locked into massive TV spending and afraid of change---even when it is beginning to stare at them in the face. A typical branding advertiser's media plan is actually a collection of little plans---one for each medium and dictated, in large part by the client's past preferences and ingrained, albeit uninformed, notions or prejudices. You rarely see a discussion of how these arbitrary allocations work together nor does anyone see the need to do so.

Of course, one reason given for such practices is that there aren't compabarable audience metrics across media and "platforms", but this is just an excuse. Where there are numbers---as for magazines and radio, for example---and these often indicate greater use of these media and less of certain forms of TV---the numbers are simply ignored.

To be fair, I must note that digital's "issues" are significant and remain largely unsolved---nor do I see a concerted effort to correct them---just lots of wailing and talk. In consequence, what we are seeing now is a knee jerk reaction by branding types who should have been paying more attention to digital from the beginning. Hey, guess what---digital has some pretty big problems. We don't like problems. We want things nice and simple----all buttoned up. So, maybe, digital isn't the magic solution for all of TV's problems. That's all.

Stuart Meyler from Beeby Clark + Meyler replied, May 3, 2016 at 4:55 p.m.

If you consider banners and pre-roll the entirety of digital marketing, then yes, there are problems with fraud, viewability, and more to the point consumers' willingness to put up with "ads". On the other hand, if you embrace the notion that consumers are interested in content, services, and utility that enhance their lives in exchange for their attention, then digital media is very much alive and well. What this report is really saying is that the stand alone media agency, disconnected from the creative process and based on aggregate buying power is dead. But we already knew that.

Doug Garnett from Protonik, LLC, May 3, 2016 at 4:57 p.m.

Concur that there's really not much support shown here. But I found it quite credible with "They recommend not using 30-second online video spots"

Video proponents are making a lot of mileage by telling clients "it works just like any other 30 but is a lot cheaper because it's online." What they don't offer is any of the reality that "it's a lot cheaper because it does a lot less...a...lot...less..."

Steve Schildwachter from Enterprise CMO, LLC, May 4, 2016 at 10:49 a.m.

I liked the article, but I like the discussion even more. As usual Kim is spot-on, and I also really liked what Stuart wrote.

The one thing I didn't like: Incautious use of the word "digital" in the headline. Most of us retired that term years ago, or at least add a modifier, e.g., "digital display ads".

As a CMO, I'm very skeptical of banners and online video for all the reasons cited. It's more productive (and more fun) to think about architecting customer experience with (wait for it....) "digital".