There have been numerous calls for the advertising industry to clean up its act, particularly when it comes to digital.
Some of the world’s biggest advertisers have taken action to inspire change, and with the introduction of new data protection regulation across the EU, the industry has been propelled into a whole new era – one characterised by a new attitude towards transparency in all its forms.
An erosion of trust between brands and their agency partners has driven us to this point, prompted by concerns over brand safety, ad fraud, the quality and pricing of the data that fuels digital campaigns, and the role of rebates in the advertising ecosystem.
According to a recent report from management consultants McKinsey, rebates remain a key concern for clients. But equally, advertisers have encouraged this behaviour by squeezing fees. The solution to the problem thus requires the entire industry to work together to draw a line in the sand and make much-needed change happen.
Working together efficiently and effectively begins with the acceptance that the relationship is now different – and requires a deeper understanding of what transparency means to both parties.
The upward trend for programmatic in-housing among advertisers is evidence of this change. With trust in agencies at a comparatively low ebb, clients are seeking a much closer view of where, and how, programmatic budgets are being spent.
The recent report from the Internet Advertising Bureau shed more light on brands’ intentions in this area. Two thirds of the 119 brand executives surveyed indicated their appetite for taking greater control of programmatic buying by bringing operations in-house.
However, digging into the detail, 13 per cent reported trialling an in-house approach and then reverting to working with outsourced partners. In addition, the report highlights the fact that those who are in-housing are doing so in different ways and to varying extents, with just 18 per cent taking full control of the whole process.
This suggests that full in-housing and taking complete control is only the answer for the few. For the many, it’s a case of interrogating each point in the programmatic chain, and identifying where there are internal capabilities that can be strengthened – and where there is a need to outsource to a trusted agency.
Those agencies with the ability and agility to adapt to changing needs will be on the front foot. By delivering individual, modular services that integrate with the advertiser’s own capabilities in a hybrid model, agencies can work together towards a goal of 100 per cent transparency.
We have worked with Deutsche Telekom in exactly this way, acting as digital transformation consultants within a hybrid arrangement that blends in-house and specialist agency skills. It’s an approach designed to ensure the company’s internal programmatic function stays at the forefront of data-driven advertising.
New models such as this show that agencies must take client concerns seriously and begin to adapt their approach accordingly. Only by offering full transparency and greater flexibility can agencies ensure programmatic delivers the value it has always promised for brands.