Feb 2, 2017
1 comment

Media Predictions for this Year: Transparency & Trust

On January 29th, the world’s largest advertiser (Proctor & Gamble) said they refuse to work with any media partner that cannot meet the tenants of their new 5 point program that kicks in this year (2017).

Marc Pritchard, P&G’s Chief Brand Officer, spoke to the program requirements at the Interactive Advertising Bureau’s Annual Leadership Meeting at the end of January 2017.

These program requirements include (but are not limited to):

  1. Creation and observation of an industry-wide viewability metric, instead of “one-off” viewability metrics by platform
  2. Fraud protection built into all media investments
  3. Mandatory third-party verification of all media investments

Additionally, P&G is requiring more clarity in their contracts to ensure that media agencies, publishers and the advertiser (in this case, themselves) are aligned on the definition of ethical media practices. P&G said that more clarity on the contracting and procurement side of their  business will hopefully eliminate rebate-based compensation practices as well as media partners working as principle and not agent on behalf of the advertiser.

For context, these rebates were discussed in the K2 Intelligence Media Transparency Report published in June 2016. That report found that of  the 117 sources interviewed, 59 reported non-transparent business practices (50.4%), 34 reported seeing rebates (29%) and 33 sources reported principle transactions they found to be “problematic” (29%)

At MKG, one of our core values is Exceeding Expectations. Following that value since day #1 of our agency, we have never considered making money off of non-transparent business practices such as rebates or acting as the principle in a media buying relationship between our customers (the advertiser) and publishers.

We’ll continue to decouple the cost of the media and provide written proof in the form of publisher invoices to show our customers exactly how much they paid for the media they have in the market.

Who should care?

This report changes nothing for MKG, but many of our competitors (both large and small agencies) will begin to hear uncomfortable questions about the true cost of the media they are using an agency as an agent to purchase on their behalf.

If I was an advertiser, I would work with my finance and legal counsel internally to research P&G’s 5-point program and determine if and how it can be implemented within the company. This will likely include a lot of auditing up front and then ongoing audits over time.

As an agency head, I am taking a proactive approach to perform audits of our own and compiling a summary for all clients that we handled media capital for over the past 6 years at MKG. For those clients who acted as their own accounts payable arm for media capital, they already have all the invoices from publishers and know the exact cost of that media investment.

What effect does P&G’s announcement and the K2 report have on our industry?

Marc Pritchard asked all the IAB annual summit attendees to follow the lead set by P&G. In my opinion, hearing other large advertisers adopt a similar set of standards (or P&G’s 5-point program, verbatim) will be a telling sign if advertisers are ready to fight battles around transparency and ethical behavior. If P&G marches into this fight alone, then it’s my opinion that while other advertisers may be concerned about this, they aren’t willing to take action against these practices.

On the other hand, agencies will only respond to advertisers that set and regularly audit media partner requirements to hold them accountable. No accountability? No change will happen in the long run on the agency side.

Here’s a link to the Proctor & Gamble announcement from the IAB Leadership Meeting: http://adage.com/article/media/p-g-s-pritchard-calls-digital-grow-up-new-rules/307742/

Comments

  1. Thanks for a great write-up, Mike! After many go-arounds with partners who wouldn’t lift the veil on true media costs, it is refreshing to work with a partner that values transparency.

    Thanks for keeping us little guys in the loop on important industry trends that affect our business!

    Alexandra Hancock | Feb 2nd, 2017

About the Author

CEO of MKG Marketing Inc

Mike Krass | CEO

Aside from being the CEO at MKG Marketing Inc, Mike is a dark beer aficionado with a healthy appetite for travel and pushing personal boundaries. A proud graduate of Washington State University, Mike currently calls New Orleans home.

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