“It’s almost a cartel. They all protect themselves… and they’re afraid that the average CPM that exists in Canada will go down.
Stéphane Bérubé, L’Oréal Canada
L’Oréal Canada‘s chief marketing officer Stéphane Bérubé (pictured right) gave the audience a rather unvarnished opinion about the state of the Canadian media industry at last week’s marketer Q&A at the Association of Canadian Advertiser’s Executive Forum.
Asked by an audience member whether media companies were doing enough to keep up with the pace of change in digital, Bérubé said that there hasn’t been enough competition to push Canadian media companies to adopt the technology or sales practices evolving in other markets.
“I think it’s because it’s almost a cartel,” he said. “They all protect themselves, and I think the reason why they don’t get in the new world is not because they don’t know or they don’t want to, it’s because they haven’t found the right remuneration model. And they’re afraid that the average CPM that exists in Canada will go down.”
He said that Canadian advertisers are already paying “way too much” for traditional broadcast TV.
“Take L’Oréal’s CPM in Canada versus Germany, versus 10 countries around the world,” he said. “With the same agency — so buying power would be the same — the CPM is at least 30% higher on average in Canada. Why is that?”
He argued that it boils down to a lack of competition and transparency in the overall Canadian market, which has translated into its digital realm as the same broadcasters look at ways to monetize online. As an example, he pointed to programmatic technology for traditional linear TV, which is starting to make headway in the U.S., but isn’t expected to come to Canada for five years or more.
When an audience member from the Television Bureau asked what Bérubé would want to see from Canada’s broadcasters in terms of transparency, Berube responded “everything is based on a volume deal, which means for the same audience, I don’t pay the same price that [someone else] pays. At the end of the day, it’s not a transparent market.”
Not all media companies are lagging in digital technology, he said, pointing to La Presse‘s recent decision to shut down its weekly print edition and focus on its tablet app. He said he looks forward to the expected launch of personalized editions of the app, which modify content based on the interests of each reader, and will be able to serve premium targeted ads to different audiences.
Patrick Dickinson, the HBC senior vice-president of core marketing and brand strategy who sat on the panel along with Bérubé and Shoppers Drug Mart marketing SVP Shelagh Stoneham, was more positive about the state of Canadian media.
Dickinson said some media providers have succeeded in getting into digital where others have lagged, and many face understandable constraints based on legacy formats. “I think most of them are very aware of the changes in how people consume media, and most if not all of them are making heroic efforts to cross-pollinate their primary channel with other ways to engage,” he said.
However, he said that brands will ultimately decide whether to invest more in working directly with individual publishers or making targeted mass buys via programmatic based on which does a better job of serving up the audiences brands want to reach. “I don’t know where that race is going to net out, but I think that a lot of traditional media in this country have a chance, if they can continue to build quality audience,” he said.
But, he added, “if we believe we can get those eyeballs through a programmatic buy — efficiently, without fraud and without all these other issues — then programmatic takes over.”
Marketers doing more internally
Canada’s ad agencies got their share of bad news as well. Asked how their relationships with external partners have changed, both Bérubé and Dickinson said they have had to move more functions internally, out of the hands of their agencies, to keep up with the fast pace of digital marketing.
Bérubé said that when faced with the choice to either rely on a single agency to try and cover the plethora of digital needs across its many brands, or try to coordinate a dozen agencies serving different specialties, L’Oréal Canada chose neither. Over the past four years it’s invested in bringing 40 experts in diverse fields like community management, analytics and programmatic media buying, in order to manage a much larger part of its digital efforts internally. L’Oréal still works with agencies, he said, but it’s always looking for more ways to in-source — for example, it’s currently considering working directly with programmatic platform TubeMogul on digital video buying. “The agency would work with TubeMogul, or DoubleClick or any DSP – why can I not do it?” he said.
Bérubé said that since an effort was made to internalize those capabilities, L’Oréal has seen a significant improvement in key indicators and a lot of cost savings.
Dickinson said HBC did a similar analysis several years ago and concluded that anything real-time needed to be done internally. Social, search and affiliate marketing (in which HBC makes substantial investments) are all ongoing efforts that change day-to-day and can’t be planned out in a conventional creative brief.
“Whatever you are still writing a brief for is so long-lead, and probably not as important, and therefore it’s external. The things that you don’t have time to write a brief for, they’re internal,” he said.
“That’s just the reality. It’s not a knock to the agency system,” he went on. “But an agency that is dependent a creative brief, or a digital brief or a social media brief to begin to develop programs — that’s just not going to work.”
Stoneham was more confident in agencies’ ability to keep the ball in the air. She said Shoppers has had success with a quaterback model, relying on open-ended, media-neutral strategic briefs that give partners enough room to adapt as they go. However, she agreed that for some real-time marketing components, like tracking and responding to trends on social media, advertisers and agencies need to work out a better blend of internal and external capabilities. “Our customers expect that from us. That whole plan, and execute, and long, long lead times, that just doesn’t cut it.”
A survey of senior marketers conducted by Ebiquity and the ACA suggested that, on the whole, Canadian marketers’ confidence in their media agencies and other external partners remains stable. Nearly half (45%) of the 43 Canadian marketers that responded to the survey said they remain as confident in their media partners as they were last year, while 29% said that they feel somewhat or much more confident with partners than they did.
However, a substantial minority of Canadian marketers, 26%, said they feel somewhat or much less confident in their partners this year — a higher rate than in Ebiquity’s global survey, where 19% of marketers said their confidence had slipped. Globally, far more marketers (39%) said their confidence in their agencies has grown compared to Canada.
