• by Ted McConnell , Featured Contributor, April 4, 2019

To call it a kerfuffle would be a little dismissive. The conversation about ad industry “transparency” has gone on for years, but little has changed.

What is transparency? A quick check of several dictionaries offers no easy way to explain the problem. Transparency, at a minimum, allows visibility in both directions across a boundary, like glass. But advertisers remain translucent to agencies, and vice versa.

In adland, maybe it’s more like a circus mirror: one-way glass in some places, clear in others, and reflections distorted by design. Both sides of the glass have their secrets, but both sides house billions of facts generally boring or useless as well. It only matters when it matters.  

Agencies still ask, “WTF, we provide a service. Do they want it, or not?” Advertisers still ask: “WTF. Where did the money go?”

Agencies often insist, “We are transparent.” Advertisers say, “No way.” It’s like a married couple arguing about what cheating is. If comes down to that, there are deeper problems.

Lately, the press seems focused on holding companies and their large clients. Small and middle-sized agencies are happy to be transparent for the most part, perhaps lacking the maze of financial complexity that makes it easy to hide (or lose track of) money, or draconian boards demanding more profit.  Moreover, the democratization of media, particularly digital, blunts the scale advantages of holding companies. So, the bigs are hurting in part because “might” no longer makes right.

Large advertisers are hurting too, of course, so there is not a lot of empathy in either direction.

Masked by the perennial advertiser/agency squabble, however, a much larger transparency problem is looming.

Non-transparent and proud of it

Facebook and Google comprise over 60% of all digital media spend, are non-transparent, growing, and so cocksure they don’t even claim to be transparent. Now add Amazon.

Across the buyer-seller interface, walled garden buying has become a game of chicken in which advertisers swerve. Ultimately, media buyers fail at their job if they don’t buy the needed reach, and the duopoly knows that.

The game is over before it starts.  

A Facebook “Gallon”?

Walled gardens provide measurements for evidence of transparency. But those metrics favor their platform, without comparisons to other platforms. Facebook has been publicly busted for providing misleading measures several times, with no apparent consequences.

To grasp the importance of this to advertisers, imagine if each gas station had its own version of a gallon, and there was no way to tell if the gas were half water. Welcome to the life of a media buyer.

It’s crazy. The people with the cash (advertisers) cannot control the system they fund.

It’s awesome, really, in purely mercenary terms. Advertisers have been convinced that they should pay for media that the seller measures.

In a way, that’s bad news for advertisers.  It means they should pay if they want measures they can trust. “Transparency” is, in part, a proxy for the resulting feeling of helplessness when advertisers don’t see results.

There’s no place like home

So, what can be done? How do advertisers get walled gardens (and agencies) to support common independent measurement standards for reach, audience quality, etc? Like Dorothy in "The Wizard of Oz," they have the power: the power of collective action.

If 10 companies control 70% of media (guessing), why can’t advertisers form a buying group? (See here for a discussion of the legal issues of forming such a group.) It would be like OPEC for media.

Could the top advertisers say that, unless [walled garden] will allow them to run standard, third-party measurements, advertisers will buy nothing from [walled garden] in [time frame]?

What would happen?

In the Hallmark version, angels would sing, walled gardens would relent, and there would be peace upon the firmament. Then, this would happen: A fight would erupt over what the measurements should be, who would provide them, and a parallel meta-fight about who would decide who provides them.

At that point, advertisers would have to step up and guide a decision. Or, they could follow a model set by the rest of the world.

Outside the U.S., uniformly, groups known as JICs (joint industry committees) decide who will provide audience measurement. Historically, the existence of Nielsen always precluded JICs in the U.S., but the overwhelming chaos in media now begs for an informed, and neutral, referee. Collective action regarding measurement and reporting might be an easy way to short-circuit the transparency debate. It might also play well in the antitrust debate simmering in congress.   

Maybe advertisers don’t need transparency -- if they can trust they are getting value commensurate with their expectations.