Click/Counterclick: The Digital Media Demand Chain

CLICK - by Jason Heller

Companies across all industries invest heavily in supply chain management, aiming to create efficiencies in a process that helps to drive revenue to the bottom line by eliminating the expense of unnecessary steps and red-tape in the logistics of obtaining products. So if the process of creating efficiencies in the procurement of products and services is referred to as "supply chain management", then the process of providers creating similar efficiencies in delivering or fulfilling orders of products or services involving multiple steps or third parties, can be looked at as "demand chain management". Such is the situation happening in our industry today.

In what industry is it acceptable to consistently deliver products late when an entire supply chain is dependent on the fulfillment of orders to the end user in order to run their businesses? It doesn't matter whether we are speaking about advertising, pork rinds, textiles, or steel beams. If buyers feel that their supply chain is weak, they will strengthen it with alternative providers. When creative is received on time and a publisher omits your ad or delivers it late, these instances usually require some level of make-good. Advertisers and agencies alike find this unacceptable.



In traditional media, you would not expect a TV or print creative delivered after the closing dates to be acceptable. It is understood that these are firm deadlines, and that missing these deadlines come along with firm consequences. It is understood that the inventory is "perishable," limited and valuable.

So why do agencies and clients continue to apply a different set of standards to digital media? As we exit a number of years in a buyer's market, flooded with excess inventory sold for low rates, many have become accustomed to abusing the market conditions. The fact of the matter is that our attitudes and approaches must change with the times.

All this leads to the million-dollar question: "Why are agencies delivering creatives late?" In part it is a complacency due to the lack of enforcement of terms and conditions relating to this practice. But that complacency transcends to setting client expectations and firm deadlines on approval timelines and creative delivery dates.

This sometimes results in direct and indirect losses for all the parties involved in that demand chain. The media agencies have to spend the time rebooking inventory or at the very least coordinating new start dates. Rep firms have to coordinate inventory management and revenue projections to their publisher clients. Ultimately this culminates in the publishers' loss of revenue on inventory, which with each passing day is becoming more and more limited and valuable (category by category). Publishers can only deliver the product ordered by the advertisers through this sophisticated demand chain, which depends on multiple third parties working collaboratively to ensure the smooth logistics of such transactions.

As a buyer, I must reiterate--it is important that we adhere to the guidelines that we have fought so hard for. Most of us who have been around for some time remember a time when the standard terms (and ad serving definitions) did not exist. These terms and conditions are not unilateral, and we must work as an industry in partnership with one another to always move forward. Publishers have made concessions to help establish the industry standard terms and conditions as de facto standards. We owe it to them and to ourselves to adhere to the elements of those standards that help streamline their revenue retention and workflow, not to mention our own.

In the humble words of Confucius: "To see what is right, and not to do it, is want of courage or of principle."

Counter CLICK - by Paul DeBraccio

I wish I could find a counter to Jason's rant, but I cannot. (He wrote his piece first.)

I guess the one point I can make is that late creative, and more importantly, the confusion surrounding where the creative is, has cost advertisers money.

These days we are almost always nearly sold out on our sites, and late creative is forcing us to give up the most coveted inventory to advertisers who are ready to roll. We conducted a mini-upfront last December for the high demand inventory on some of our sites, as late decisions and late creative deliveries were causing us to lose money by turning away other advertisers.

This confusion and blasé attitude is probably hurting us all. I think there are still many blue-chip advertisers holding out, and still afraid to shift money from TV and magazines due to the fact that our industry appears sloppy compared to the other media.

Buyers who deal with rep firms know that we love to take your ad dollars. But we will have more ad dollars flowing into interactive media if we all join together and adhere to the standards that are in place.

Henry Ford said, "Obstacles are those frightful things you see when you take your eyes off the goal."

I see OUR goal as becoming the No. 1 medium for advertisers. How about focusing on that?

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