Commentary

Creative Is King, Media Supply Chain Economics The Victorious Queen: Turn Your Masterpiece Into A Postage Stamp

I have worked most of my life in an industry building high volume products with a maniacal focus on costs across the supply chain. The most successful companies are often the ones that best manage that supply chain, regardless of product.

You may ask what does this have to do with the marketing and media business?

Let's start with creative, clearly we want our creative sweat and blood to have as much impact on the market as possible. In fact, comScore data show that half of a campaign’s impact on sales to Miillenials is due to the creative strength.

However, it is well known that creative is only 15% of the marketing budget. So if 85% of this budget is in media, then a 20% to 30% improvement in media performance can have a massive improvement in the creative impact to your audience.

Many marketers are failing to understand this important part of the equation and how is applies to digital today. It will be the brands that master the supply chain that will drive their creatives to economic success.

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Although some people are still in denial that most media will go programmatic, I have watched this business grow and morph for three years — and its clear that almost all media will be bought through software at some point, either privately direct or through open exchanges.

TV and Outdoor are moving there, and I came across a direct mail vendor recently that did programmatic mail. Magna Global this year projected that 50% of the global display and video market will be programmatic by 2019. My assumption is this excludes Facebook, which is 20% of global media, so the programmatic number is probably much higher than this.

So lets look at the supply chain from advertiser to consumer and take a badly managed case.



The more leaks in a system the less and less money reaches the publisher and audience. It is the role of every marketer to understand how they start taking ownership of the supply chain.

What should you do?

1. Own your own tech contracts with suppliers

Why? It ensures complete transparency to performance and transaction costs. Don’t you want to log in and see what is going on occasionally? Own your own data so that you can have full transparency across the marketing chain.

2. Minimize your tech suppliers – reduce complexity.

The fact is that Google and Facebook own about 70% of global media, add in inventory management platforms like SpotX and you start reaching 80% of the global media supply. There really is no need to have 10 DSP in your inventory to reach your audience. Turn the funnel around and look at supply side into as few DSP as you can possibly can to reach the audience.

The less technology you are using to access supply will improve DSP discounts, improve work practices as staff really understand your business and make data integration achievable and actionable.

3. Minimize the Workflow

Ask your agency why they are handing off the trading work to third parties, its costing you a lot in the daisy chain and probably difficult to manage a real time optimization process.

3. Look at the media supply chain and take ownership of key relationships

The programmatic marketplace started with open exchange inventory, often tarred with a brush of low quality. We are now moving to a position where private marketplaces will dominate the future growth of programmatic. This will be driven from curated markets packaged by DSP, agencies, SSP and if smart brand self driven in association with a partner.

Ideally, you will own the private market and not share this with others who could reuse your data for campaigns.

Bring the supply to the DSP not chase DSP for supply.

4. Deploy Ad verification systems for Ad fraud and Viewability

This is obvious, but there are many instances where this is not done globally  or no attention to optimization. It's like walking across the road blindfolded.

Measure

Advertisers need to hyper optimize to maximize media $ to the target, viewability, completion rates, fraud. Media quality is everything and the simpler the process, the likelihood of success. However you need full transparency across everything you do.

Think Big..Be Bold..Think Supply Chain Economics

Global companies – don’t operate like a local sweet shop and scatter all your decisions across a myriad of relationships. Realize that digital is at least accountable unlike many forms of media, embrace it.

You can ignore all this and let others control your future, let valueless tech be added to your plan, buy media in marketplaces where your data is owned and share with others, including competitors. You can let robots view your ads, and let third parties take more and more of your money.

I would suggest that brands take control.

Yes, creative is king – but not if you start with a masterpiece and end with a postage stamp, watching your $100 becomes a $1 of viewing in the marketplace.

3 comments about "Creative Is King, Media Supply Chain Economics The Victorious Queen: Turn Your Masterpiece Into A Postage Stamp".
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  1. Ed Papazian from Media Dynamics, January 24, 2017 at 8:21 a.m.

    Gary, this is the first time I've heard that "creative" represents 15% of an advertiser's marketing budget while media accounts for 85%. Where did those figures come from? If an advertiser spends $10 million on "marketing", does this include a $1.5 million fee to its agency for "creative" and are you factoring in ad/commercial production costs? Also, for many marketers, promotional activities ----not media buys----represent half of their spending.



    As for the contention that "some"----make that "many"---people are in denial about "programmatic being accepted as the way to go for all media buying, not in our lifetime----unless programmatic is adapted to suit the needs of buyers and sellers----which isn't the case---and is priced fairly----even less true, currently.

  2. Doug Schumacher from Zuum, January 24, 2017 at 12:32 p.m.

    As someone from the creative side, it's nice to see this pov, Gary. In my experience with creative development there's no question it benefits from simplicity. In any medium. It allows focus of both attention and resources. 

  3. Gary Milner from Lenovo replied, January 27, 2017 at 3:28 p.m.

    The creative % is in a variety of articles, without source, The actual number doesnt matter, the point is that we spend money and time on great creative that if not managed on its journey becomes nothing in terms of impact OR brands pay huge extra costs as they havent managed the supply line.

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