Media Buying Briefing: How will media agencies react when programmatic is put under the microscope?

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This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →

Concerned that the exploding world of ad tech and automated media buying, specifically the $82 billion programmatic space, just keeps getting more confusing and complex, the Association of National Advertisers (ANA) issued an RFP to potential consultant partners to understand the practice from beginning to end.

It wasn’t quite the live grenade that the ANA tossed at the media agency world in 2016 when the industry association — which represents marketers who spend billions on advertising — alleged that media agencies were covering up fraudulent and unethical behavior. At the time, media agencies lined up to swing back at the ANA and defend themselves — all while worrying what might get uncovered when it was reported in 2018 that the FBI was also investigating the issue. (To date, no serious instances of fraud have been uncovered, media agencies noted to Digiday.)

This time, holding company media agencies are staying quiet — either declining comment or not responding to requests for comment. That could have something to do with the fact that the ANA is far less accusatory this time, citing the desire to help marketers understand the flow from initial idea to actual execution, and the accompanying money flow. “The lack of full transparency for ad delivery and ad quality is diminishing marketers’ ability to fully optimize investments and drive greater business growth,” said Bob Liodice, ANA president and CEO. “We believe this lack of transparency is costing advertisers billions of dollars in waste.”

But a few holding companies that own data companies could also be less excited about closer scrutiny on how programmatic dollars flow through their systems. Though no one is alleging it (yet), they could potentially be favoring in-house operations along the programmatic supply chain, including metrics support and the like.  

Some agencies welcome the attention to the issue. “There are so many players involved in programmatic, from SSPs to DSPs to verification companies, etc., that it can lead to fatigue or apathy on the part of marketers to pay attention” to where the dollars go, said Prerna Talreja, group director of marketplace/biddable media at Crossmedia, an independent media agency. “Advertisers don’t necessarily make the decisions as to which vendor gets chosen, so from an agency perspective, not every decision might be completely neutral. That’s why it’s good if marketers start to ask more questions.”

One holding company media agency source who declined to speak on the record wondered about the odd timing behind ANA’s announcement. “With all the changes going on in the ad-tech world, and the fact that we’re at a real inflection point for our whole ecosystem, who knows how things will shake out?” The source added that their holding company is already working to better understand the flow of programmatic advertising, and where it proverbially swims into murky waters. And GroupM has moved to consolidate its programmatic spend with fewer vendors.

It also bothered this executive that the ANA declined to alert agencies about its effort — choosing instead to go to the press first. “One reason no one’s saying anything on this issue is because we haven’t seen the RFP yet,” the source said.

The ANA noted last week that it had the support of its equivalent association in the U.K., the Incorporated Society of British Advertisers, which in early 2020 put out the results of its own two-year research into programmatic practices, with the help of PricewaterhouseCoopers. It found a complicated mess, involving 1,000 unique supply-chain permutations, of which only 290 were fully mappable from end to end. Worse, there was about 15 percent of ad spend that simply was untrackable — quite similar to the “tech tax” that players in the industry attribute to waste in the ad tech space overall.

Given the continued expansion of programmatic here in the U.S., including connected TV, streaming and digital out of home, Talreja is glad the ANA is doing its own research. “It’s not that people don’t care about the opaqueness of it, it’s just there’s a lot of acceptance because so much money is being pumped into the space,” she said. “What we should all care about is, is all that money delivering the business results?”

Good question. — senior news editor Seb Joseph contributed to this report.

Color by numbers

It comes as a shock to no one that subscription services grew dramatically over the last 18 months. But which categories across digital experienced more growth? And do they have staying power to maintain their expansion? Commerce platform collaborated with commerce tracker to put out its recent Subscription Commerce Conversion Index, which surveyed more than 2,000 consumers and evaluated some 200-plus subscription merchants. Here’s what they found:

  • Snapshots from February 2020, July 2020 and February 2021 show that the biggest growth areas in digital were digital media, which went from 6.1 percent of respondents to 9.9 percent in July to 19 percent this past February
  • Internet of Things/hardware: 2.6 percent to 3 percent to 7.5 percent
  • Online gaming: 21.1 percent to 22.7 percent to 28.1 percent
  • Surprisingly, streaming surged then slid back, going from 65.7 percent in Feb. 2020 to 69.5 percent in July 2020, then 67.1 percent in Feb. 2021.
  • The survey also found that 52.2 percent kept their subscriptions, 21.3 percent used multiple free trials, 14.7 percent were still on a free trial and 11.8 percent canceled their subscription.

Takeoff and landing

  • Publicis Groupe not only retained parts of Stellantis’ global media business but expanded it to become the carmaker’s sole global media agency, with a media spend value approximating $2 billion. Stellantis includes brands in the Fiat Chrysler domain such as Maserati, Ram, Alfa Romeo, which was already handled by Publicis, but media for the French PSA Group automaker had been handled by Mediacom, and includes the Citroen, Peugeot and Vauxhall brands.
  • IPG’s UM unit last week landed media AOR duties in North America and Europe for auto rental umbrella Enterprise Holdings, which includes the Enterprise, Alamo and National brands. The incumbent was Omnicom’s PHD. Separately, UM sibling media agency Mediahub landed media duties for Crown Media Family Networks, which includes HallmarkChannel.
  • WPP got back to merging complementary divisions within its empire. GroupM and WundermanThompson last week announced the formation of a new data consultancy called Choreograph that comprises the data/analytics units of both agencies and will report up to GroupM North American CEO Kirk McDonald. Separately within GroupM, Wavemaker’s chief data sciences officer Karima Zmerli left to join PR giant Edelman as global head of performance and predictive intelligence.

Direct quote

“We’ve become familiar with the Amazon walled gardens and the Facebook walled gardens, but we’re about to become familiar with device-led walled gardens, operated by people like LG, Samsung, and Vizio. The use of identifiers in the TV market is evolving at really quite a space. What I’m hoping people are going to do is to stand back and look at other forms of [a] signal other than identifiers … You see a shape of connected TV and targeting and attribution which has moved beyond the straight identifier cookie-based world of the online advertising market, and I think there’s terrific opportunity in that.”

Longtime WPP digital executive Rob Norman, now director at Piano, on the deprecation of cookies and the changing nature of identifiers, to BeetTV.

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