Addressing the critical issue of media supply chain transparency

Since his barnstorming speech last weekend at the IAB [i] Leadership Meeting in Florida [ii] on the collective issue of the lack of transparency in the media supply chain, Mark Pritchard’s words have echoed across the marketing press and commentators. 

Pritchard voiced in public what many clients privately admit:

"...we haven’t taken enough action to make a difference. Maybe one reason is that cleaning up the media supply chain is not a sexy topic"

If now is the time to act, one question is left hanging – how do we achieve this?

Pritchard’s words matter for two reasons. First, he is more than your average marketer – as P&G’s Chief Brand Officer, he is possibly the most powerful marketer in the world, wielding $7bn of investment each year. Second, it appears that P&G are putting this money on the line to drive change, giving its agencies and media suppliers a year’s notice to collaborate and comply, or risk losing their business.

He made a call for the industry to collectively address what can be described as the Complexity-Transparency Paradox. The paradox is borne from a desire (and often need) to rapidly embrace the continuous but increasingly complex waves of innovation in digital engagement but the realisation that this perpetuates long feared concerns over the lack of control and transparency in the media supply chain.

Pritchard did not pull any punches. He concludes that...

“…we have a media supply chain that is murky at best and fraudulent at worst”.  

This comes on the back of solid data published by two respected industry associations last year.

The US’s Association of National Advertisers (ANA) report on media transparency unearthed substantial evidence of non-transparent undisclosed rebates that equated to anywhere between 1.67% and 20% of aggregate media spend depending upon the deal. They traced this to all types of media and agencies, from independents through to agency holding companies. 

Separately, the World Federation of Advertisers (WFA) report on advertising fraud put the cost at $7.2billion (5% of total global advertising), and conservatively estimated that it could rise to $50bn by 2025 without sufficient counter measures.

This matters to clients (and by association to agencies and publishers) because of what it says to the rest of the business about marketers and marketing. If our role as marketers is to help drive a long term profitable business, then a pre-requisite for both our credibility and our ability to deliver this is that (1) we know and (2) we can show that we are spending the shareholder’s money wisely. 

In a world where the data indicates that many marketers are not trusted by their CEOs (primarily because CEOs believe that we too often live in our creative and social media bubble rather than focusing on the financial realities of companies)[iii], it pays to be outcome focused rather than output focused. What we do is a means to an end, not the end in itself.

So how did we get here and what needs to be done? 

Pritchard was brutally honest. He believes that too often we marketers have been distracted by the “latest shiny objects” (he ‘fessed up P&G being guilty of this), driven by the understandable desire to be at the cutting edge of digital developments. 

In this attempt to be pioneers of the new world, there is a growing realisation that maybe we have underplayed the risks from insufficient standards, measurements and verification, and have allowed some suppliers to mark their own homework, to quote Keith Weed, Chief Marketing & Communications Officer at Unilever.[iv]

Marketers by their very nature are (and should be) innovators, always seeking to engage with their customers and consumers where they can have most impact, which means digital must be a critical part of the mix.

However, what Pritchard is saying is that to make sound decisions on what, where, when and how much, we must clean up the media supply chain.  Importantly, he is laying the responsibility at the feet of all five critical industry stakeholders - marketers, agencies, publishers, advertising technology platforms and suppliers – and saying that if we cannot collaborate to achieve this then we will all lose out.

Pritchard’s appeared to be firing the starting gun, stating that P&G have committed to four actions;

1. Adopting a single viewability standard (the Media Ratings Council’s [MRC] validated viewability standard)
2. Implementing accredited third-party measurement verification (MRC-accredited third-party verification);
3. Transparent agency contracts;
4. Measures to prevent advertising fraud through collaboration with the Trustworthy Accountability Group.

However, achieving effective change requires a level of collective stakeholder action to (1) co-define the separate pieces of a transparent media supply chain and (2) deliver the associated transition roadmap. This is what can be called an exercise in collective transition;

This is an exercise in collective transition

Experience from other sectors shows that this needs to be orchestrated, and that seven elements are critical for success:

• Working to establish a shared understanding of the conditions that created this situation and a realisation by suppliers/agencies of the ultimate consequences for their clients of advertising fraud and undisclosed rebates – clients do not see this as a victimless “crime”!
• The convening of, and commitment from, leading players from across the 5 stakeholder groups to address the issue. Given P&G’s ubiquitous presence, Pritchard’s speech and proposed actions have put a fire under this, but already there are questions about the extent to which platform players share the same vision.
• Active collaboration by all to develop a transparent media supply chain, giving what Pritchard has called “…a level playing field for all”. This sounds very enticing for clients, but may be less attractive when looked down the publisher’s end of the telescope.
• A widespread understanding of the technical and non-technical challenges each stakeholder faces in achieving a transparent supply chain – so all understand the collective barriers, which will be significant. As Pritchard said, this cannot be about finger pointing.
• Whilst Pritchard has laid out P&Gs four key actions, it’s important that the stakeholder groups coalesce around an initial conceptualisation of what the outcomes look like, before real progress can be made. 
• Each player must square the commercial case coming out of this new world, because it will potentially see significant changes in the flow of money and margin. Whilst Pritchard has suggested that all will ultimately benefit, in reality those at risk in the short term (and we intuitively know who they) may not see it this way.
• Hence, this calls for experienced facilitation skills from key conductors to help collectively achieve the transition, be that the ANA, AAAA, WFA or those with experience from other sectors. 

We all know that it seemed much easier back in the day. Creative and media for print, radio and TV/cinema were channeled through one or two agencies, and a media auditor kept everyone reasonably honest. Undisclosed rebating inevitably went on, but likely not at the same scale.

Today we live in a new world of sophisticated and constantly evolving technology, data and analytics. To survive, marketing departments are developing levels of technical and analytically professionalism that would astound their predecessors. 

However, many senior marketing leaders still remember when, on a bad day, marketing used to be disparagingly called the colouring-in department. They rightly feel the responsibility to get to grips with the media supply chain, to drive marketing efficiency and effectiveness, and to help sustain and further build their corporate credibility. 

Finally, through the transition we must not forget that great creative work is achieved through genuine partnership, first and foremost between client and agency, but also with publishers and other stakeholders.

As we navigate the transition, it will be critical to retain mutual respect. As Ian Millner (co-founder and chief executive of Iris) said in response to Pritchard's speech:

"...it’s got to be about making and rewarding work that is genuinely valuable and visible in people’s real lives. After all – we’re supposed to be in it together". [v]

Mark Pritchard may be a quiet man in a grey(ish) suit but it would be unwise to believe he does not mean what he says, not least because he has the financial and contractual will to back it up, and sees like-minded peers across the industry lining up beside him. 

It will require brave and bold actions from across the industry but future marketers will thank everyone for it.

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[i] Interactive Advertising Bureau (IAB)represents more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns.

[ii] https://www.youtube.com/watch?v=Bacqd9cG_VE

[iii] https://www.fournaisegroup.com/ceos-do-not-trust-marketers/

[iv] https://www.marketingweek.com/2016/09/23/unilever-cmo-keith-weed-three-things-all-marketers-can-do-to-eliminate-ad-fraud/

[v] https://www.campaignlive.co.uk/article/consumer-brand-relationship-crossroads/1423016