Marketers: Fraud and transparency are your responsibility (column)

ACA’s Ron Lund says marketers are getting ‘bilked’ in online media

Who should lead the way in reducing or eliminating fraud, peeling back the layers of the onion called transparency or setting standards for viewability? It’s a question I’ve heard bandied about for some time in industry circles, most recently at the ACA’s June Executive Forum – Taking a Hard Line with Online: The Client Perspective.

The logical answer: it’s the marketer. Why? Frankly, the marketer is the only party in the digital advertising ecosystem that does not have some degree of inherent conflict of interest. And in the end it is the marketer whose advertising investment is being bilked.

Yes, bilked. Marketers’ online investments are being devalued in the current system, despite claims it has the best metrics for ROI.

Let’s execute a quick flyover of this ecosystem, starting with fraud. A recent study by TubeMogul and Integral Ad Science concluded that to maximize efficiency, KPIs should be based around human, viewable traffic, eschewing other metrics such as click rate and standard completion. It notes that “in a $5 billion digital video market, a potential 20% gain in efficiency means a free $1 billion.” In Canada, the size of the market is smaller, but even 10% of that $1 billion would be a massive $100 million. Clearly, being vigilant about viewability and non-human traffic will help recoup this waste.

Let’s turn to transparency, where programmatic media is our new reality. It’s big (estimated to hit $1.1 billion in 2017 by native ad platform StackAdapt) and getting bigger. It also elicits the greatest “doublethink” of our digital media world. We have the great promises of efficiency, targeting, effectiveness, scalability and measurable ROI while simultaneously most transactions are conducted virtually blind. The complexity and “fog” associated with programmatic is costing marketers, and yes, publishers as well.

In a traditional media buy, we all know the agency takes a cut of approximately 10 or 15%. This means the publisher or broadcaster receives somewhere around 85 cents on the dollar. Not the case with programmatic. It is estimated that a dollar put in to programmatic yields as little as 40 cents of actual purchase to the marketer. That’s right: 40 cents on the dollar, with other players in the “value chain,” such as the AOR, trading desk and DSP each carving out their own slice of the pie.

The hypothetical “tech tax” from the World Federation of Advertisers’ 2014 member survey

It seems only fair that marketers should know what dollars are going toward working media versus fees. Armed with that information, they might make a strategic decision to run a low tech, low fee, high media campaign with excellent reach and minimal targeting, or opt for a high tech, high fee, low reach campaign. But it would be their choice to make.

This brings us to viewability standards. Current industry standards are, quite simply, laughable. Display ads: 50% of the ad in view for a minimum of 1 second. In-browser video viewability: minimum of 50% in view for a minimum of 2 seconds. Clearly there is a long way to go to bolster these standards. However, this is only part of the problem.

The other part is how we measure this standard in the first place. There is no shortage of suppliers, many accredited by the Media Rating Council (MRC), who report to marketers on the performance of their campaigns, including viewability measures. The issue is that the variance between suppliers’ results on viewability measures can be as high as 30%. And we have no idea as to which measurement is more correct.

All this to say that these three issues: fraud, transparency and viewability considerably devalue the significant and growing investment marketers have committed to this medium. I would also suggest that if not addressed, and soon, these critical issues could threaten the growth, if not the viability, of digital advertising. Dramatic, yes, but true.

The investment in digital is no longer a marketing test. As such, the notion that the waste, theft and lack of transparency in the system have somehow been “taken into account in the numbers” (an assertion that has passed its “best before” date), will no longer be an acceptable explanation to the C-Suite.

But how do we get off the mark? The common refrain is that “it will require a total industry effort.” And indeed it will. As I stated at the outset, it is the marketer who should and must lead this effort, but with close industry collaboration. At the ACA, our board has made this a strategic imperative and we have already started several initiatives, both independently and with other industry associations. Over the coming months we will be reaching out to other organizations to join in the effort.

So if you would like to get involved, consider this your invitation and challenge to do so.

Ron Lund is president and CEO of the Association of Canadian Advertisers, a not-for-profit offering services exclusively to marketers and representing their interests before government and industry stakeholders. Ron has been president of the ACA for 19 years and, prior to that, was president at several Weston Foods companies. His agency-side experience included stints at FCB and Grey Advertising.