Blog

By Jessica Yared, ACA

Last week the ACA hosted a 3-hour executive forum on digital media transparency, verification and auditing, with an equal mix of marketers, agency and media folks in attendance. That players from all sides attended, illustrates just how important the topic is these days.

With stories of ad fraud popping up in the industry rags every other week, transparency in digital media is on most marketers’ radar. Indeed, of the marketers surveyed for ACA’S April/May 2014 Marketer’s Pulse report, over two-thirds ranked the issue as 8 points or more on a 10-point scale of importance (10 representing ‘extremely important’). In contrast to this, it was reported that one of the biggest barriers to achieving or maintaining an optimal level of transparency is that marketers don’t even know what questions they should ask their AORs. To put it bluntly, they know it’s an issue, but they can’t even begin to take steps in resolving it due to lack of knowledge.

You might be thinking, “This isn’t surprising. After all, online advertising is pretty new as an advertising medium.” In fact, it’s been almost 20 years since the first ad appeared on the internet, yet problems regarding digital media transparency, among others, are rampant. The industry has certainly bought into the medium as a way to reach consumers – in fact, a recent Media in Canada article reported that ad revenue on the internet has, for the first time, surpassed ad revenue on TV in Canada. The common perception is that digital advertising is cost-efficient and can demonstrate measurable results. But whether that perception is in line with reality or not remains to be seen. Issues of fraud notwithstanding, do marketers know the real cost of digital advertising if they don’t even know what questions to ask?

For example, our Marketer’s Pulse report revealed that almost 1 in 5 marketers do not know whether their agencies use trading desks. Furthermore, almost 75 per cent of marketers do not know if their agency trading desks practice arbitrage – the process of buying something for one price and immediately reselling it at a higher price, thereby realizing a financial gain in the process.

And what of agency volume bonuses (AVBs)? AVBs are deals that typically take the form of cash rebates offered by media owners to incent media buyers to spend more on their properties. The use of AVBs is not as common a practice in Canada as it is overseas, but it does exist. How well are Canadian marketers informed on the subject? Our Marketer’s Pulse survey found that a surprising fifty per cent of marketers are aware of this practice in Canada, yet drastically few (13.5%) receive a portion of AVBs from their media agency.

As issues like these start to gain more traction and more visibility in our industry, the hope is that marketers will start asking their agencies questions. Of those that participated in our survey, many cited that they are concerned that agencies are not pro-active in seeking transparency from their suppliers; marketers suspect that they are not the only ones struggling to get a grasp of the issues. At the end of the day, it’s not only marketers who benefit from greater transparency – both agencies and publisher must strive for it, so that marketers retain confidence in the medium and continue to invest in it.

The lesson learned here is that all of the players in the ad ecosystem – marketers, agencies and media – must work together to achieve greater transparency and must hold each other mutually accountable so that digital marketing in Canada can flourish into a beneficial marketing medium for all involved.