Three Ways Transparency Is Changing the Ad Industry.
In addition to that opacity, deep-seated challenges such as ad fraud, brand safety, and viewability have given advertisers pause. A Juniper Research study, for example, says fraud will cost the industry more than $42 billion in 2019. Another study by Rakuten Marketing estimates that, every year, brands end up wasting about a quarter of their digital budgets on ineffective channels and platforms. In response, marketers want to know where and how their money is being spent and that it is having a meaningful impact on campaign goals.
With that in mind, the calls for transparency are taking many forms across the ad industry. We have seen it in the growth of third-party verification, auditing partner relationships, shedding light on fees, and media-buying contracts. Here are some of the biggest changes occurring today as a result of transparency.
Premium media is king--Advertisers are leaving spray-and-pray marketing tactics and spending on long-tail, low-quality remnant media behind. They are less concerned about scale at all costs and more interested in campaigns appearing to the right audience alongside high-quality content. This is why investments in private marketplaces (PMPs) have been on the rise for the last several years, according to eMarketer. There is also a shift away from user-generated content (UGC) platforms (such as Facebook and YouTube) because of brand safety issues. For Facebook, fake news has been its primary challenge. Meanwhile, Google's YouTube continues to navigate its own brand safety crisis amid a flood of offensive content.
The response from brands is a narrowing of media spending to premium, trusted publishers and advertising environments. According to a study from my own company, Verizon Media, in which we surveyed more than 300 senior marketers, 45% say they are shifting spend to "well-regarded premium publishers" in the wake of transparency concerns. Research by Advertiser Perceptions also finds that access to premium inventory is one of the top reasons marketers are turning to programmatic guaranteed and PMPs for their buys. The embrace of premium media will only continue.
Measuring across platforms--Advertisers may be turning to premium media for transparency, but they are still using multiple platforms when buying media and running campaigns. Measurement transparency across platforms is an open concern for the industry (including P&G's Pritchard, Taco Bell, and WPP).
The solution to the measurement issue is independent third-party verification. Even the UGC platforms are beginning to embrace third-party verification, not requiring marketers to solely rely on them to grade their own homework. Clearly, the tide has turned, and third-party verification is now just the cost of doing business. It's difficult to have it any other way, as 97% of advertisers want partners to adopt it, per the Association of National Advertisers (ANA).
Measurement and transparency extend to programmatic as well, of course, with increased spending across devices and formats. Buyers need omnichannel intelligence at the auction level, and programmatic vendors have to share analysis and provide insight to help marketers allocate budgets and plan spending.
It's also likely that third-party measurement will help usher in an era of standardized metrics across platforms--a challenge made more imperative as marketers continue to be offered new channels for digital advertising, such as the rapid growth in connected TV/over-the-top (CTV/OTT), programmatic audio--and will offer buyers more clarity and confidence.
Cost clarity--Most of digital advertising transparency is focused on ad delivery measurement, such as viewability and brand safety, but performance doesn't cover the full transparency story. Advertisers also seek clarity around costs and fees.
Traditionally, the advertising world has operated with opaque media-buying contracts with little oversight or reporting on costs. But this way of doing business isn't compatible with today's era of transparency. Brands are even determining media-buying partnerships based on the transparency promised. An eMarketer study reveals that one-third of marketers have recently terminated an agency contract because of pricing opacity.
The demand for digital advertising transparency isn't just growing--it's the new normal. Some of the world's biggest brands have rightfully brought a loud voice and their full weight--in the form of billions of dollars in media spend-to the issue. Change is never instantaneous, but the digital ad industry has definitely taken notice.
JEFF LUCAS IS VERIZON MEDIA'S HEAD OF NORTH AMERICAN SALES AND GLOBAL CLIENT SOLUTIONS.
The Nielsen Co. (US), LLC
Tiny Technologies, Inc.