Brand managers and multichannel marketers are asking a lot of questions these days regarding how their media dollars are being spent. There are basic questions, like “Are my marketing dollars being invested in the right places to drive impact?” and “How will I know what’s working and what’s not?”And there are more challenging questions influenced by the explosion of programmatic ad buying like “Are my ads being viewed by humans?”
However, recent news from the Association of National Advertisers (ANA) has resulted in a slew of new questions, such as, “Are the partners I work with incentivized to spend my working media dollars in the best interest of my brand or theirs?”
In case you didn’t catch it, the ANA conducted a study to investigate media transparency issues in the U.S. advertising industry. The findings of the study were released in a report over the summer. Here are a few highlights:
- A “pervasive” amount of buyers receive cash rebates based on who they invest with.
- Frequently, the revenue earned was not disclosed to the client.
- Some agencies have equity in the companies that they buy media from or receive equity as an incentive based on spend.
- These practices span across all media types including digital, print, out-of-home, and TV.
As you can imagine, this stirred up a healthy amount of controversy and responses from the large media buyers.
Now the question you should be asking is, “What should I do to ensure my marketing dollars are working for my brand?” Here are three areas on which to focus.
1. Corporate Policies
Find out if the partners you’re working with have a policy regarding incentives received from media and ad tech companies in the form of rebates, awards, or gifts. If they don’t, probe further.
2. Master Services Agreements (MSAs)
Review the MSAs that govern the working relationship with the buyer and add rules that require transparency and disclosure when there are conflicts of interest.
3. Business Arrangement
One overlooked way to avoid these issues and to keep the relationship healthy so that buyers are motivated to invest in your best interest is to look at the business arrangement that you have in place with your partners. For example, it’s a generally accepted practice for advertisers to compensate media buyers based on a percentage of the media spend to cover the services associated with managing and optimizing media. But there’s an inherent problem with this business relationship. By setting it up this way, the buyer is incentivized to spend the most amount of money with the least amount of effort. An alternative model is to separate the working media dollars from the dollars associated with the work to plan and optimize the spend.
Finally, all relationships are built on trust and transparency. Results that reinforce that trust, backed by data that provides the transparency you need, will ensure a healthy relationship between your partners and you to benefit your brand.