26 February 2016
Topics in this article
  • Cost Optimization
  • Marketing

Almost every day I read another article about how amazing digital advertising is. Finally I see an increasing number of articles about the waste and fraud that exists in digital advertising. I have been concerned for a long time about limited awareness client side and lack of activity agency side. At last, some agencies are admitting this huge blemish, but not enough are proactive enough on behalf of their clients. Ad land and tech companies talked much of the hyped opportunity in digital advertising, but not enough about the risks and how to mitigate them.

We cannot wait for regulators to act to avoid this waste. Who stands to lose most in this? It is the advertiser, consumer and investors. Advertisers are wasting the money paying for ads never seen by their intended target consumers. Consumers then ultimately pay because the advertiser cost base is needlessly inflated to pay for this waste, which is likely passed onto consumers through price increases. The Publisher gets paid if nothing changes. The media agencies and all other intermediaries get paid too. The Fraudsters themselves get paid of course. That is unless the advertising client can get to grips with its media strategy, its policy on use of exchanges and manage its agencies and media publishers more robustly.

Proxima’s research into the state of digital marketing spend has found that companies are ineffectively spending between 40 and 60 percent of their digital budgets, with most wastage coming from non-human traffic and poor viewability. So it goes beyond just the bot-driven fraud. This impacts not just advertising effectiveness, but also business value. When a poorly placed ad can waste precious budget and have a detrimental impact on a brand, reputation or share price, no company can afford to get it wrong. Ultimately it’s not just about cost optimization, it’s about getting a better strategy in place.

It is time for new thinking. To achieve digital advertising success, greater collaboration between internal functions such as IT, Finance and Marketing and external third parties (agencies) is critical. Marketers need to understand how to better buy digital marketing tools and channels, how to work with third party media networks and ultimately manage the digital marketing budget.

That’s where procurement can act as an independent third-party, helping marketing with internal goal alignment and external goal setting with agencies. Great procurement teams are able to ask not just the tough questions, but also set the right contemporary governance protocol and new media quality metrics, raising awareness of vested interests, presenting alternative perspectives and challenging agency motivations. Furthermore, procurement can offer experience from other supplier interactions and cross agency co-ordination, essential with an ever increasing array of specialist agencies to manage. This will all help to enhance transparency and control for the marketing team as a result, undoubtedly pleasing those investing in these same brands too – knowing the that much more of the budget is actually reaching the intended consumers, thus boosting sales, market share and profit.

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