Roth: Facebook Miscalculation 'Not That Big A Deal'

Facebook acknowledged last week that it overestimated average viewing times for video ads on its platform for two years. Commenting on that development this week, Interpublic Group CEO Michael Roth told an Advertising Week crowd that it was “not that big a deal.”

At least not for IPG. Roth explained that the reason he feels the way he does about the contretemps is that for IPG anyway, average time viewed is “not a key measurement for buying on Facebook.”

But he added that the Facebook miscalculations do spotlight another issue--the lack of full transparency for many ad transactions. And that issue, he said “is a big deal,” especially when agencies buy and resell their own media time to clients.

“IPG does not do that,” said Roth, explaining that the holding company’s view is that it is a conflict of interest — or at the very least an appearance of one -- for an agency to sell its own inventory when it should be media “agnostic” in order to provide clients with the optimal strategic plan and ads for their needs. Roth made a point of noting that he was the only holding company CEO to cooperate with an investigation earlier this year commissioned by the Association of National Advertisers looking into transparency issues between media agencies and clients.



Transparency aside, digital media has lost a little luster, given marketer concerns that measurement of the medium is inadequate and that they may not be getting their money’s worth from digital media buys. Roth noted that measurement is a genuine concern, particularly when bots are counted as part of an audience exposed to an ad.

When asked by CNBC’s Julia Boorstin, who interviewed him at the Advertising Week event if he was troubled by the fact that Google and Facebook are so dominant in the digital media space (collectively accounting for about 80% of inventory) Roth replied, “I think there are some up and comers.” He cited Snapchat as one example. But he added that Google and Facebook “are not going away” and advertisers and agencies have to deal with them.

When the subject turned to holding company solutions for marketers, Roth confirmed that it’s a growth area for IPG — he estimated that between 20% and 30% of IPG’s revenues now come from such solutions, which IPG calls an “open architecture” approach. Roth stressed that the technique rarely calls for a dedicated agency, but instead is a process where agencies and talent are cherry picked to service an account, depending on its needs. Each agency is rewarded based on its contributions to the overall effort, he said. He cited the Oreo business as an example. FCB, The Martin Agency and Weber Shandwick as well as third parties outside of IPG were recruited and collaborated on global  work that extended to 50 countries and was translated into 20 languages.

For the agency business, “confusion is good,” said Roth. And there’s plenty to be sorted out in the marketing world that’s best done by holding companies, he asserted. When clients seek a holding company solution, they’re basically saying, “you tell us the best way to meet our objectives,” he said.

Roth said that while the business environment is “okay, not great,” the company remains confident that its growth this year will be between 3% and 4% and probably closer to 4%. 

2 comments about "Roth: Facebook Miscalculation 'Not That Big A Deal'".
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  1. Douglas Ferguson from College of Charleston, September 28, 2016 at 5:49 p.m.

    Reducing the denominator (but not the nominator) in a fraction always makes the resulting percentage look bigger.  It's a lie, plain and simple.

  2. Mark Eberra from ONE BILLION LIVE Inc., September 28, 2016 at 6:48 p.m.

    It's "not that big a deal" when it's not your money! Remember before you buy get a GSI™

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